XN000022-1989-07-12 — Page 13

WEDNESDAY, JULY 12, 1989

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FROM

ON MEMBERS PROPOSAL THAT THE LIMIT OF PAYMENT BE RAISED THE PROPOSED $4,000 TO $8,000, MR YEUNG SAID THE PURPOSE OF THE FUND WAS TO PROVIDE QUICK RELIEF TO EMPLOYEES WHO HAD SUDDENLY LOST THEIR EMPLOYMENT.

"WHEN THE PROPOSED FIGURE OF $4,000 FOR SEVERANCE PAYMENTS IS TAKEN TOGETHER WITH WAGES IN ARREARS AND WAGES PAYABLE IN LIEU OF NOTICE, THE IMMEDIATE RELIEF CAN BE AS HIGH AS $14,000.

"SEEN IN THIS LIGHT, AND HAVING REGARD TO THE RESOURCES OF THE FUND, IT WOULD SEEM PRUDENT IN THE FIRST INSTANCE ΤΟ SET THE LIMIT FOR SEVERANCE PAYMENTS AT $4,000 PER EMPLOYEE, MR YEUNG SAID.

I

VITAL TO HAVE RESERVE FOR ECONOMIC DOWNTURN

* *

IT IS VITAL TO BUILD UP A RESERVE FOR THE PROTECTION OF WAGES ON INSOLVENCY FUND TO CATER FOR A POSSIBLE ECONOMIC DOWNTURN IN THE EVENT OF WHICH PAYMENTS FROM THE FUND COULD INCREASE TREMENDOUSLY, THE HON CHUNG PUI-LAM SAID IN THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).

MR CHUNG, WHO IS CHAIRMAN OF THE PROTECTION OF WAGES ON INSOLVENCY FUND BOARD, SAID THIS IN THE RESUMED DEBATE ON THE PROTECTION OF WAGES ON INSOLVENCY (AMENDMENT) BILL 1989, THE PURPOSE OF WHICH WAS TO EXTEND THE SCOPE OF THE FUND ΤΟ COVER SEVERANCE PAYMENTS.

MR CHUNG SAID THE FUND AT PRESENT HAD AN ACCUMULATED SURPLUS OF ABOUT $160 MILLION. NEVERTHELESS HE STRESSED THAT THE SURPLUS WAS THE RESULT OF ACCUMULATION OVER THE PAST FEW YEARS DURING WHICH HONG KONG ENJOYED AN ECONOMIC BOOM.

"THE ACCUMULATED SURPLUS SO FAR WOULD BE WIPED OUT BY PAYMENTS TO ABOUT 11,500 EMPLOYEES OR 0.4 PER CENT OF THE ENTIRE LABOUR FORCE OF ABOUT 2.7 MILLION IN A CERTAIN SCENARIO WHICH, OF COURSE, NO ONE WOULD LIKE TO SEE HAPPEN, HE NOTED.

A LEGCO AD HOC GROUP WAS FORMED TO EXAMINE THE BILL AND TWO REPRESENTATIONS FROM CONCERNED LABOUR ORGANISATIONS HAD BEEN RECEIVED, MAINLY ON THE SETTING OF THE MAXIMUM LIMIT OF PAYMENT FOR EACH APPLICANT. THE GROUPS REQUESTED THAT THE LIMIT SHOULD BE SET AT $8,000 AND $16,000 RESPECTIVELY.

IN

THE AD HOC GROUP, HAVING DULY CONSIDERED THE VIEWS CONVEYED SUCH REPRESENTATIONS, THE VIEWS OF THE ADMINISTRATION, THE FINANCIAL SITUATION OF THE FUND AND THE SEEMINGLY UNCERTAIN ECONOMIC OUTLOOK AHEAD, HAD AGREED TO TAKE A CAUTIOUS APPROACH BY SETTING THE LIMIT AT $4,000 AS PROPOSED IN THE BILL, SUBJECT TO THE ADMINISTRATION'S PROMISE TO REVIEW THE SITUATION ONE YEAR AFTER THE EXTENSION CAME INTO EFFECT, MR CHUNG SAID.

/HE RECALLED