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Proposed reform to the Companies Act is a step in the right direction to prevent companies from illegal phoenixing but more needs to be done, advocates and lawyers say.
Employment law advocate May Moncur said several clients had yet to receive compensation following a ruling in their favour by the Employment Relations Authority after their former employer went into liquidation.
Moncur recognised there were legitimate cases in which liquidation was needed, but some owners intentionally avoided liability by declaring bankruptcy and forming a new company with the same leadership.
“These ‘false liquidations’ are often voluntary,” Moncur said. “It’s a low price an employer pays to avoid their liabilities such as…
