Legislative Council

LC Paper No. LS102/98-99

The Secretary for Education and Manpower has given notice to move a motion on 3 February 1999 under section 16(3) of the Protection of Wages on Insolvency Ordinance (Cap. 380) to amend section 16(2)(f)(i) of the Ordinance.

2. Section 16(2)(f)(i) of the Ordinance now provides that the Commissioner for Labour shall not make payment out of the Protection of Wages on Insolvency Fund in respect of a severance payment of "an amount exceeding the aggregate of $36,000 and half of that part of the applicant's entitlement to severance payment in excess of $36,000".

3. Under section 16(1) of the Ordinance, the Commissioner may make an ex gratia payment out of the Fund to an applicant of wages, wages in lieu of notice or severance payment in the following circumstances -

1. in the case of an employer who is not a company -
   
   
   1. a bankruptcy petition has been presented against him; or
      
      
   2. he would be liable to have a bankruptcy petition presented against him; or
   
   
2. in the case of an employer who is a company, a winding up petition has been presented against that employer.

4. The Legislative Council is empowered by section 16(3) of the Ordinance to amend by resolution the amounts prescribed in section 16(2)(f)(i).

5. The Administration now proposes by motion to increase those amounts from $36,000 to $50,000. The increase will take effect from 5 February 1999 and will not apply in respect of a severance payment the liability of which arises before that date.

6. The draft resolution is legally in order.


Prepared by

CHEUNG Ping-kam, Arthur
Assistant Legal Adviser
Legislative Council Secretariat
19 January 1999