Page 4323 - Week 12 - Thursday, 24 October 2019
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The nature of the four covered industries is such that workers are prone to move from employer to employer. Portable long service leave for service within these industries encourages workers to continue to contribute their skills and experience within the industry and provides them with employment security.
Portable long service leave not only benefits workers; it benefits employers by attracting and retaining workers within these industries and by fostering sustainability and worker productivity. The amendments contained in this bill will improve the operation of the portable long service leave schemes. They are the product of extensive consultation with stakeholders, including industry, employers and their unions.
Specifically, the amendments contained in this bill would modernise and enhance compliance and enforcement activities and address minor technical omissions and inconsistencies within the legislation.
One minor but important amendment within the bill is an amendment to the definition of the childcare industry. The bill would update child care to “education and care services” to reflect the change of terminology within the early childhood education and care industry and acknowledge the important role these educators play in the lives of young people.
While most employers do the right thing by their workers, it is an unfortunate reality that some employers do not. One way in which some employers have sought to avoid their obligations under the portable schemes legislation is by phoenix activity. This is where a new company is created to continue the business of a company that has been deliberately liquidated to avoid paying its debts, taxes, creditors or workers’ entitlements.
While there may be genuine reasons why businesses fail, this is not one of them. Phoenix activity impacts businesses, workers, contractors, government and the wider ACT community. According to the Australian Tax Office, illegal phoenix activity in Australia is particularly prevalent in a handful of industries. Two of these are covered under the portable schemes legislation: construction and security services.
Other instances of non-compliance with the act have involved the non-lodgement or late lodgement of quarterly employer returns identifying numbers of workers and their relevant service for the purposes of portable long service leave.
In addition, the payment of levies is an area where non-compliance is experienced. Levies to support the payment of portable long service leave are collected from employers. When an employer does not pay their fair share, other employers must support the financial stability of the scheme. It is not right that employers who meet their obligations foot the bill for those who do not.
With this in mind, the bill will introduce a number of mechanisms to enhance compliance and enforcement under the legislation. Specifically, the bill would give the authority the power to recover outstanding debts from the director or directors of a company involved in phoenix activity. By providing the authority with the power to
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