Court guidance on the meaning of ‘true employer’ for the purposes of the external administration provisions of the Corporations Act 2001

Marelda Hibberd, Mathew Gashi and Daniel Conti of Maddocks summarise the NSW Supreme Court’s decision in Mosaic Brands, which clarifies that, for employee priority purposes under ss 433 and 561 of the Corporations Act, courts will look beyond contractual labels to determine the “true employer” within a corporate group, with significant consequences for distributions of circulating asset recoveries between employees, FEG, and secured creditors.

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