XN000022-1982-06-30 — Page 9

WEDNESDAY, JUNE 30, 1982

LABOUR DEPARTMENT PROPOSES EXAMINATION OF PAYMENT OF CLAIMS

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THE LABOUR DEPARTMENT PROPOSES TO EXAMINE THE POSSIBILITY OF SPEEDING UP PAYMENT OF CLAIMS TO EMPLOYEES WHO LOSE THE IR JOBS AS A RESULT OF CLOSURE OF BUSINESS.

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THE COMMISSIONER FOR LABOUR, THE HON. J.N. HENDERSON, SAID THIS THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY) IN REPLY TO QUESTIONS BY THE HON, ANDREW SO.

MR HENDERSON POINTED OUT THAT THE EMPLOYMENT ORDINANCE PROVIDED EMPLOYEES WITH SAFEGUARD FOR THEIR WAGES.

UNDER THE ORDINANCE, AN EMPLOYER WOULD BE GUILTY OF AN OFFENCE AND LIABLE TO A MAXIMUM FINE OF $5 000 IF HE WILFULLY AND WITHOUT ANY REASONABLE EXCUSE FAILED TO PAY WAGES DUE.

IF AN EMPLOYEE FOUND HIS EMPLOYER FINANCIALLY UNABLE TO PAY WAGES OR OTHER STATUTORY ENTITLEMENTS, HE MIGHT PURSUE HIS CLAIMS THROUGH WINDING-UP OR BANKRUPTCY PROCEEDINGS.

UNDER THE COMPANIES ORDINANCE OR THE BANKRUPTCY ORDINANCE, MR HENDERSON ADDED, AN EMPLOYEE WAS ENTITLED TO THE FOLLOWING PAYMENTS OUT OF THE ASSETS OF THE EMPLOYER IN PAR WITH CROWN DEBTS BUT IN PREFERENCE TO ALL CREDITORS OTHER THAN DEBENTURE HOLDERS:

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WAGE AND SALARY UP TO A MAXIMUM OF $8 000-

* ONE MONTH'S WAGES IN LIEU OF NOTICE UP TO $2 000- AND

*

A SEVERANCE PAYMENT UP TO $8 000.

MR HENDERSON CONCEDED THAT FULL PAYMENT OF CLAIMS TO EMPLOYEES DEPENDED ON THE MONEY AND ASSETS, WHICH THE EMPLOYER MIGHT HAVE AND WHICH THE LIQUIDATOR MIGHT BE ABLE TO RECOVER AND SELL.

+THE NATURE OF THESE PROCEEDINGS IS SLOW-MOVING BECAUSE OF THE NEED TO ENSURE THAT ALL CREDITORS WHICH INCLUDE EMPLOYEES GET THE MOST FAVOURABLE RETURN ON THE AVAILABLE ASSETS OF THE INSOLVENT EMPLOYER. HOWEVER, CLEARLY IT WOULD BE HELPFUL TO EMPLOYEES IF WAYS OF SPEEDING UP PAYMENT WITHOUT DETRIMENT TO THEIR OWN LONG-TERM INTERESTS, AND THOSE OF OTHER CREDITORS, COULD BE FOUND, HE SAID,

ACCORDING TO THE RECORDS OF THE LRS. THERE WERE 208 CASES OF INSOLVENCY OF EMPLOYERS INVOLVING 5 099 WORKERS, WHO WERE REFERRED TO THE LEGAL AID DEPARTMENT FROM JUNE 1981 TO MAY 1982. THE AMOUNT OF CLAIMS INVOLVED WAS $13.8 MILLION.

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