Battle cry for workers who suffer lost pay pain when companies go bust

Local | Wallis Wang 26 Jul 2021

The upper limit for workers to claim outstanding wages from a labor fund after companies go bankrupt should be increased, unionists say.

The Hong Kong Federation of Trade Unions is targeting the Protection of Wages on Insolvency Fund, which has not been upped for 25 years.

Currently, workers can claim unpaid wages for the final four months of employment, but the total amount is capped at HK$36,000.

The union suggested yesterday that the cap should be HK$76,000, or four times the median pay of HK$19,000 last year.

Federation chairman Wong Kwok said the unemployment situation became more serious over the last two years due to the civil unrest in 2019 and the pandemic.

He said 8,693 firms went bankrupt last year, and the number of people who applied for the fund for help reached 3,020 last year, up 33 percent from 2018.

In addition, nearly 1,400 people applied to the fund in the first five months this year, Wong said. That is up 19 percent compared to the corresponding period last year, he added, which shows that the situation of unpaid wages continues to worsen.

According to statistics collected by the union, more than 27 percent of fund applicants sought over HK$36,000 last year.

Wong said the average amount being claimed was HK$41,482, which meant an average loss of HK$5,482 since workers can only receive up to HK$36,000.

Workers' rights should be protected, as they had done their jobs, he added, so the SAR administration should increase the upper limit of the fund - set in 1996 - as soon as possible to ensure workers receive fair compensation after companies they worked for go bust.

"It's extremely unreasonable and unfair that the cap has not been changed for 25 years," he said.

Wong also said it takes a long time for workers to receive the money because of a complicated application process.

"Normally, workers would receive the money after nine months, but some of them cannot get it even after two years," he said. "That is extremely unreasonable, and officials need to review the process."

The unemployment rate dropped to 5.5 percent for three months ending in June, but Wong said that did not reflect the reality of the employment situation.

"Many workers are now forced to do part-time jobs, freelance jobs or be self-employed," Wong said.

"We hope government officials will go to grassroots areas in person to learn the real situation instead of reading numbers while sitting in their offices."

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