Debated in Parliament on 8 Jul 2013.
Mr Patrick Tay Teck Guan asked the Deputy Prime Minister and Minister for Finance if he will provide an update on the review of section 328(2) of the Companies Act to raise workers' salary claim limits from an insolvent company in tandem with rising median salaries.
Section 328(2) of the Companies Act sets out the cap on the amount an employee may receive in priority over the claims of other creditors, when a company becomes insolvent. The current cap is five months’ salary or $7,500, whichever is lower.
We are reviewing the cap on such priority payments, and whether the cap should be updated more regularly. The review seeks to strike a balance between the rights of employees and creditors of the company, and takes into account the laws in other jurisdictions, such as the United Kingdom, Australia and Hong
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Kong.
MOF will be consulting the tripartite partners soon. We will also seek public feedback on the proposed changes to section 328, together with other proposed changes to the Companies Act, by September this year.
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