C.S. 84
A
B
RESTRICTED
For discussion
on 25th June 1974
XCR(74)123 Copy No...24
MEMORANDUM FOR EXECUTIVE COUNCIL
Severance Payments
RECEIVED IN REGISTRY No. 51
2 5 JUN 1974
HKK 5/19.
BANKRUPTCY (AMENDMENT) BILL 1974 COMPANIES (AMENDMENT) (NO 2) BILL 1974 RESOLUTION OF THE LEGISLATIVE COUNCIL UNDER SECTION 8 OF THE LABOUR TRIBUNAL ORDINANCE (CHAPTER 25)
P.
On 4th June 1974, Honourable Members considered memorandum XCC(74)39 and advised that the Employment (Amendment) (No 2) Bill 1974, designed to provide for severance payments on redundancy, should be introduced into the Legislative Council. The policy approved in respect of this bill calls for consequential amendments to other ordinances which should be enacted contemporaneously.
Preferential Payments
2
It is stated at paragraph 11 of memorandum XCC(72)89 (considered by Honourable Members on 5th December 1972) that "If in a particular case an employer has insufficient assets to discharge all his liabilities, that for severance pay should rank with that for wages. The present position with wages is that priority is accorded for up to four months arrears of wages, subject to an overall maximum of $6,000. Thus the Bankruptcy (Amendment) Bill 1974 (at Annex A) and the Companies (Amendment) (No 2) Bill 1974 (at Annex B) provide that, in the event of the bankruptcy or winding-up of the employer, severance payments should enjoy the same priority accorded to arrears of wages or salary up to a maximum of $6,000 in respect of each severance payment due.
✓
C
Jurisdiction of the Labour Tribunal
3
The Employment (Amendment) (No 2) Bill 1974 envisages that questions as to the right of an employee to a severance payment or the amount of such payment may be made the subject of a claim referred to the Labour Tribunal for determination. To ensure that the Labour Tribunal has jurisdiction to entertain such claims, which may be made by an employee or an employer, the Schedule to the Labour Tribunal Ordinance (Chapter 25) requires amendment. This amendment can be made by resolution of the Legislative Council (Annex C) under section 8 of that ordinance.
RESTRICTED
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