WEDNESDAY, MAY 14, 1986
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NO PLANS TO RAISE SEVERANCE PAY LIMITS
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THE PRESENT PREFERENTIAL LIMITS UNDER THE COMPANIES AND BANKRUPTCY ORDINANCES WERE ADEQUATE AS REGARDS WAGES IN ARREARS AND WAGES IN LIEU OF NOTICE, ALTHOUGH THE AVERAGE CLAIM FOR SEVERANCE PAY WAS SUBSTANTIALLY ABOVE THE LIMIT, THE SECRETARY FOR EDUCATION AND MANPOWER, THE HON NEIL HENDERSON, SAID IN THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).
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REPLYING TO A QUESTION BY THE HON TAM YIU-CHUNG, MR HENDERSON SAID THERE WERE NO PLANS AT PRESENT TO RAISE THE PREFERENTIAL LIMITS UNDER THESE TWO ORDINANCES.
HE ADDED THAT IF THESE LIMITS WERE RAISED, THEN HIGHER-PAID EMPLOYEES WOULD OBTAIN A SOMEWHAT LARGER SHARE OF THE FINITE SUM REALISED ON DISPOSAL OF A COMPANY'S REMAINING ASSETS, WHILE LOWER-PAID EMPLOYEES WOULD GET LESS.
MR HENDERSON EXPLAINED THAT THE PREFERENTIAL LIMITS UNDER THE COMPANIES AND BANKRUPTCY ORDINANCES WERE SET BY REFERENCE TO THE NON-MANUAL WAGE CEILING IN FORCE AT THAT TIME UNDER THE EMPLOYMENT ORDINANCE.
HE SAID THE LIMITS IN RESPECT OF WAGES AND SEVERANCE PAYMENT WERE SET AT FOUR TIMES THE CEILING FIGURE OF $2 000 PER MONTH AND THE LIMIT FOR WAGES IN LIEU OF NOTICE AT THE SAME AMOUNT AS THE CEILING FIGURE, REFLECTING THE LENGTH OF THE PREFERENTIAL PERIOD FOR WAGES IN ARREARS AND WAGES IN LIEU LAID DOWN IN THE FORMER TWO ORDINANCES.
ACCORDING TO REVIEWS OF PREFERENTIAL PAYMENT CLAIMS CONDUCTED BY THE LABOUR DEPARTMENT SINCE 1977, THE LAST BEING COMPLETED IN APRIL THIS YEAR, THE RESULTS INDICATED THAT THE AVERAGE CLAIM IN 1985-86 FOR WAGES IN ARREARS AMOUNTED TO $2 892, FOR WAGES IN LIEU OF NOTICE TO $1 776 AND FOR SEVERANCE PAY TO $13 068.
MR HENDERSON SAID THERE WAS LOGIC IN THE ARGUMENT THAT THE REAL VALUE OF PREFERENTIAL LIMITS SHOULD BE MAINTAINED BY INCREASING THEM IN LINE WITH THE MANUAL WAGE CEILING.
HOWEVER, HE SAID, THE OBJECT OF THE WAGE CEILING IN THE EMPLOYMENT ORDINANCE WAS TO DEFINE THE CATEGORY OF EMPLOYEES COVERED, WHILE THE PREFERENTIAL LIMITS UNDER THE COMPANIES AND BANKRUPTCY ORDINANCES GOVERNED THE DISTRIBUTION OF ASSETS IN THE EVENT OF WINDING UP OR BANKRUPTCY.
HENCE, THERE WAS NO NECESSARY LINK BETWEEN THE EMPLOYMENT ORDINANCE AND THE LATTER TWO ORDINANCES REGARDING THESE LIMITS, HE SAID.
/MR HENDERSON