Rounded corners fail to cut off content in webkit browsers if position:relative

Rounded corners fail to cut off content in webkit browsers (e.g. Chrome) if position:relative;

See this demo.

HTML:

CSS:

.outer {
    background:yellow;
    border:solid 1px black;
    position:relative;/* Setting this means rounded corners don't cut off content! */
    overflow:hidden;

    -moz-border-radius: 12px;
    border-radius: 12px;   
}
.inner {
    background:red;
    height:50px;
}

Anyone know of a fix? Thanks-