J
.1.
WEDNESDAY, MAY 8, 1991
EXPLAINING THE REASONS FOR EXTENDING THE SEVERANCE PAYMENT COVER, THE ACTING SECRETARY SAID THOUGH THE EMPLOYMENT ORDINANCE REQUIRED AN EMPLOYER TO MAKE LONG SERVICE PAYMENTS TO HIS EMPLOYEES UNDER CERTAIN PRESCRIBED CIRCUMSTANCES, THE LAW DID NOT TO MAKE ANY PROVISION FOR THESE LIABILITIES.
HAD IT
REQUIRE HIM
AN THAT IF
SERVICE
BEEN ARGUED, WITH SOME JUSTIFICATION, EMPLOYER DID NOT MAKE SUFFICIENT PROVISION FOR HIS LONG PAYMENT LIABILITIES, HE MIGHT RUN INTO FINANCIAL DIFFICULTIES WHEN
LIABILITIES SUCH
UNABLE AROSE, RESULTING IN HIS EMPLOYEES BEING OBTAIN THEIR ENTITLEMENTS, SHE SAID.
TO
"THE MAIN PROBLEM IN REQUIRING EMPLOYERS TO FUND THEIR LONG OF SERVICE PAYMENT LIABILITIES 18 THAT IT WOULD TIE UP LARGE AMOUNTS WORKING CAPITAL AND, FOR SMALL BUSINESSES, CREATE DISPROPORTIONATE ADMINISTRATIVE OVERHEADS.
"AN EMPLOYER SHOULD BE ABLE TO MEET HIS LONG SERVICE PAYMENT PAYMENT LIABILITIES UNLESS HE IS INSOLVENT, IN WHICH EVENT, SEVERANCE WOULD BE PAYABLE," MISS CHOW SAID.
SHE SAID RATHER THAN PURSUING THE FUNDING OF LONG SERVICE PAYMENT, THE GOVERNMENT PROPOSED, INSTEAD, THAT THE EMPLOYEES' SEVERANCE PAYMENT ENTITLEMENT SHOULD BE MORE ADEQUATELY PROTECTED BY EXTENDING THE COVER UNDER THE PROTECTION OF WAGES ON INSOLVENCY FUND.
MISS CHOW POINTED OUT THAT THE PROPOSED EXTENSION WOULD ENSURE WHOSE THAT FULL COVERAGE WOULD BE GIVEN TO THOSE LOWER-PAID EMPLOYEES ENTITLEMENTS DID NOT EXCEED $8,000.
IT WOULD ALSO PROTECT THE FUND FROM BEING DEPLETED TOO QUICKLY, SHE SAID.
"IF WE WERE TO COVER SEVERANCE PAYMENT ENTITLEMENTS IN FULL FOR ALL EMPLOYEES, THE COST WOULD BE VERY HIGH.
"THERE IS THE ADDED DANGER THAT SUCH A MEASURE MIGHT CONTRIVED INSOLVENCIES AS A MEANS OF PASSING ON TO THE RESPONSIBILITY FOR MAKING SEVERANCE PAYMENTS," MISS CHOW SAID.
ENCOURAGE FUND
THE
THE ACTING SECRETARY NOTED THAT THE PROTECTION OF WAGES ON ON INSOLVENCY FUND WAS PRESENTLY FINANCED BY A LEVY OF $100 PER ANNUM EACH BUSINESS REGISTRATION CERTIFICATE AND BRANCH CERTIFICATE.
"TO
ENABLE THE FUND TO MEET THE ADDITIONAL COMMITMENT ARISING FROM THE EXTENDED COVER, IT IS NECESSARY TO INCREASE THE RATE OF LEVY ON EACH BUSINESS REGISTRATION CERTIFICATE AND BRANCH CERTIFICATE FROM $100 To $250.
"THIS SHOULD GENERATE SUFFICIENT INCOME ΤΟ COVER FORECAST EXPENDITURE UNDER NORMAL CIRCUMSTANCES, SHE ADDED.
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THE BUSINESS REGISTRATION (AMENDMENT) BILL 1991, WHICH WAS ALSO GIVEN A SECOND READING TODAY, SOUGHT TO INCREASE THE RATE OF LEVY FROM $100 TO $250.
/MISS CHOW
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