(Cap. 32.)
Transitional.
(Cap. 6.)
(Cap. 32.)
(2) The Companies Ordinance is amended
(a) in section 178(2) by inserting after "wages” the following-
"or wages in lieu of notice or both";
(b) in section 265 (1)—
(Cap. 380.)
(Cap. 380.)
(i) in paragraph (b)(i) by inserting after "Fund" the following— "under section 18 of the Protection of Wages on Insolvency Ordinance"; and
(ii) in paragraph (c)(i) by inserting after "Fund" the following- "under section 18 of the Protection of Wages on Insolvency Ordinance"; and
(c) in section 265(6) by deleting the definition of “the relevant period”
and substituting the following-
(Cap. 380.)
(Cap. 380.)
66
"the relevant period" means—
(a) in a case where a company is being wound up by the court and the relevant date in the case of that company is a date other than the date of the commencement of the winding up, the period—–
(i) beginning 4 months next before the com- mencement of the winding up and ending on the relevant date; or
(ii) beginning 4 months next before the date of application for an ex gratia payment, under section 16 of the Protection of Wages on Insolvency Ordin- ance, from the Protection of Wages on Insolvency Fund, and ending on that date of application, whichever is the earlier;
(b) in any case where paragraph (a) does not apply, the
period-
(i) of 4 months next before the relevant date; or (ii) beginning 4 months next before the date of application for an ex gratia payment, under section 16 of the Protection of Wages on Insolvency Ordin- ance, from the Protection of Wages on Insolvency Fund,
whichever is the earlier;".
9. This Ordinance shall apply to and in relation to any payment to be made in accordance with section 38 of the Bankruptcy Ordinance, or section 265 of the Companies Ordinance, after the commencement of this Ordin- ance, notwithstanding that any debt to which such payment relates was incurred before that commencement.
Explanatory Memorandum
The principal object of this Bill is to amend the Protection of Wages on Insolvency Ordinance to extend the protection afforded by that Ordinance to wages to include wages in lieu of notice.
2.
Clause 2(b) amends section 2 of the principal Ordinance by inserting a definition of “wages in lieu of notice".
+
5
3. Clause 3(a) amends section 15(1) of the principal Ordinance to provide that a person may apply for an ex gratia payment from the Protection of Wages on Insolvency Fund (“the Fund") of wages in lieu of notice.
4. Clause 3(c) inserts a new subsection (4) in section 15 of the principal Ordinance to provide that an application to the Fund for payment of wages in lieu of notice cannot be made in relation to a contract of employment terminated before the commencement of the Bill.
5. Clause 4(b)(iv) amends section 16(2) of the principal Ordinance by inserting a new paragraph (e) to provide that a payment out of the Fund of wages in lieu of notice shall not exceed the equivalent of 7 days' wages of the applicant or $2,000, whichever is the lesser.
6. Clause 4(c) amends section 16 of the principal Ordinance by inserting a new subsection (3) which empowers the Legislative Council to amend new section 16(2)(e). Thus the Legislative Council can vary the maximum amount of wages in lieu of notice which can be paid out of the Fund to an applicant.
7.
Clause 6 amends section 24 of the principal Ordinance by inserting a new subsection (3). The effect of the amendment is that the subrogation rights of the Protection of Wages on Insolvency Fund Board in respect of payments out of the Fund shall include such payments made in respect of wages in lieu of notice.
8.
Clause 7 revokes the Protection of Wages on Insolvency Regula- tions, as clauses 3(b), 4(b)(i) and 5 respectively amend sections 15(2), 16(2)(a) and 23 of the principal Ordinance to provide that the forms presently specified in those regulations shall now be in writing in a form approved by the Commissioner of Labour.
9. Clause 8 makes consequential amendments to the Bankruptcy Ordinance (Cap. 6) and the Companies Ordinance (Cap. 32). The con- sequential amendments clarify the priority to be given to payments out of the Fund as a debt in-
(a) the distribution of the property of a bankrupt; and
(b) the winding up of a company.
10. Clause 9 is transitional and provides, in effect, that the principal Ordinance, the Bankruptcy Ordinance and the Companies Ordinance, as amended by the Bill, shall apply to debts which arose prior to the Bill's commencement where the relevant bankruptcy or winding up has not been completed before that commencement.
11. The Bill has no significant public expenditure or Public Service staffing implications.
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Private notes are available after approval.