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If and when the Severance Pay legislation is enacted, the Tribunals would be the obvious place for the settlement of disputed claims. In time, moreover, Workmen's Compensation disputes could be added to the Tribunal's responsibilities (see paragraph 32). But it would in my view be a mistake to include small money claims not specifically related to labour matters within the jurisdiction of the Tribunal.
36. The Presiding Officer has drawn attention in his first report to problems arising from the interpretation of section 6 of the Employment Ordinance. Two decisions of the District Court held that if there was a breach of this section of the Ordinance, the victim of the breach was only entitled to general damages under common law and that he had a duty to mitigate his loss. It was also heli that section 6 of the Employment Ordinance does not confer on a worker an absolute right to one month's wage in lieu of notice. This is not a problem that I have encountered elsewhere where similar legislation is in force. It would be interesting to establish whether or not these decisions would be confirmed if there were an appeal to a court of higher jurisdiction; but perhaps the simplest way of resolving this matter would be to reword section 6 of the Employment Ordinance in a manner that establishes unequivocally and beyond doubt that the entitlement to one month's notice is an absolute right.
Wages in Bankruptcy
37. There have been difficulties in the past about the protection of wages in bankruptcy and, notwithstanding the priority accorded in legislation to wages, these difficulties continue. Difficulties arise in the main from the methods by which small manufacturers obtain credit by way of advances or loans which are secured on machinery, raw materials or goods. These are promptly seized in the event of bankruptcy and there may be nothing left from which the workers can be paid.
38. So far as the United Kingdom is concerned, where there are bankruptcy or liquidation proceedings and it is found that a landlord has distrained, the rights of wage creditors, if preferential, are given some measure of priority over the landlord's claims by virtue of section 33(4) of the Bankruptcy Act 1914 and section 319(4) of the Companies Act 1948. These provisions are similar to those of section 38(5) of the Hong Kong Bankruptcy Ordinance. If a creditor has levied execution then, in the case of bankruptcy, the rights of all creditors, including preferential creditors, are safeguarded to a limited extent by the operation of sections 40 and 41 of the Bankruptcy Act 1914 and, in the case of companies, by sections 325 and 326 of the Companies Act 1948.
39. However, even these provisions can give only limited protection but this is less important in Britain where there is unemployment benefit, redundancy pay etc. It is interesting that arising from the famous Lip case in France, the Government there has introduced a form of insurance against bankruptcy and for the protection of wages. The text of this has been sent to the
/Commissioner
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