Labor goes after dodgy company directors

Every Australian company director will be issued with an identification number under a Labor plan to stop the dodgy practice of phoenixing.

The ruse involves company directors stripping assets from a business just before it goes broke, not paying workers and creditors and then establishing a new business with a different name.

The practice has been especially prevalent in the building industry with many subcontractors never recovering amounts owed to them by phoenix operators.

Opposition employment spokesman Brendan O'Connor said too often people set up companies as a way to escape their obligations.

"That conduct has cost the economy, certainly workers have lost entitlements, lost redundancy, lost superannuation and other benefits," he said.

Measures in the Labor plan include:

* A director identification number that would require a 100-point ID check, making it easier for the corporate watchdog to track directors.

* Increased penalties for phoenix activity including breaches of director's duties and managing companies while disqualified.

* Objective test for transactions depriving employees of their entitlements.

* Clarifying availability of compensation orders against accessories under the Fair Work Act.