Registering Employees Affected by Sudden Business Closures as Creditors to Recover Owed Salaries

Mr Yip Hon Weng asked the Minister for Manpower (a) what direct assistance does the Ministry provide to employees affected by sudden business closures to properly register as creditors to recover owed salaries; and (b) whether the Ministry's investigative process determine if a parent company is the true employer of employees hired by its subsidiary company and to hold the parent company liable for unpaid wages.

When a company is under bankruptcy, judicial management or liquidation, employees who face salary arrears should file a Proof of Debt with the company's liquidator in accordance with the Insolvency, Restructuring and Dissolution Act. To help such employees do so, the Tripartite Alliance for Dispute Management (TADM) has published a comprehensive Judicial Management Guide. Employees requiring additional support can also access the TADM Chatbot or consult with TADM's advisory officers who will assist claimants to complete the necessary proof of debt documentation to facilitate submissions, as well as link them up with the appointed liquidators.

The Ministry of Manpower (MOM) will investigate and take action against errant employers who willfully breach employment legislation when winding up. As part of MOM's investigations, MOM will ascertain the party who is liable for unpaid salaries. The party liable is the one which employs the worker under a contract of service and is responsible for the management of the work in which the person is engaged. Even if a subsidiary company is the legal employer, MOM may still investigate the parent company if evidence shows that they had instigated, conspired or intentionally aided an offence.