Bankruptcy, Individual Voluntary Arrangement and Winding-up of Companies
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7. Can I institute bankruptcy proceedings against my employer for unpaid wages?

If employees are owed wages, wages in lieu of notice, severance payment s or other contractual sums by the employer, then they may (as creditors) petition to the Court for a bankruptcy order ( if their employer is an individual person or a partnership ), or a winding-up order ( if their employer is a limited compan y ).

If a bankruptcy or winding-up order has been granted against an employer, then the relevant employees are entitled to receive payment out of their employer's assets in preference to most other creditors in respect of wages, wages in lieu of notice and severance payment s under the statutory limit s . Take arrears of wages as an example , employees can recover wages up to a maximum of $8,000 each in respect of services rendered to their employer. However, any arrears of wages, wages in lieu of notice or severance payments exceeding the statutory limit s are non-preferential debts, and employees will be treated as ordinary creditors on claiming the exceeded amount.

Alternatively, employees can apply for ex-gratia payments from the Protection of Wages on Insolvency Fund through the Labour Department. For details regarding bankruptcy claims on employment matters, please visit the webpage on Employment Disputes.

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