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Following is a written reply by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, to a question by the Hon Paul Chan on Protection of Wages on Insolvency Fund in the Legislative Council today (November 19):
Question:
The 2007-2008 Annual Report of the Protection of Wages on Insolvency Fund Board revealed that the number of applications for ex gratia payment received by the Protection of Wages on Insolvency Fund (the Fund) recorded a significant drop of 38% when compared with that of the previous year. However, given the uncertain economic outlook amid the financial tsunami, the Chief Secretary for Administration said on October 18 that he was not optimistic about the unemployment rate in Hong Kong. In this connection, will the Government inform this Council:
(a) of the number of applications for ex gratia payment received by the Fund and the amount of payment involved for the period from April to October this year, together with a breakdown of such figures by the industry to which such applications belong, the amount and period of outstanding wages, and a comparison with the relevant figures in the same period of last year;
(b) given that the Fund has an accumulated surplus of $1,228.6 million as at the end of March this year and the current annual rate of business registration certificate levy is $450, and judging from the experience in granting ex gratia payment in the past five years, when the accumulated surplus of the Fund is anticipated to be exhausted; and whether it has any plan to adjust the rate of business registration certificate levy for the coming five years; and
(c) of the total number of suspected cases of misuse of the Fund and the amount of payment involved for the period from April to October this year, and the number of convicted cases as well as the penalties imposed?
Reply:
President,
(a) For the period from April to October 2008, the Protection of Wages on Insolvency Fund (the Fund) received a total of 3,258 applications involving claims for ex gratia payment of $217.58 million. The breakdown of these applications by industry, amount claimed and period of outstanding wages and a comparison with the relevant figures in the same period of 2007 are set out in the Annex.
(b) The accumulated surplus of the Fund amounted to $1,437.3 million as at the end of October 2008. The financial position of the Fund is subject to the amount of levy income and ex gratia payment. Therefore, how much longer the accumulated surplus of the Fund can cope with the disbursement of ex gratia payment and whether any adjustment to the rate of the business registration certificate levy would be necessary in the next five years will depend on the state of Hong Kong's economy as well as the number of major insolvency cases in the years to come. The Labour Department (LD), together with the Protection of Wages on Insolvency Fund Board, will continue to monitor the financial position and levy rate of the Fund closely.
(c) In the course of investigating insolvency cases which might involve abuses of the Fund, if there is sufficient evidence that wage offences committed by a company are attributable to the consent, connivance, or neglect of its responsible persons, LD will take out prosecution against such persons under the Employment Ordinance.
From April to October 2008, of the prosecution cases concluded, there were 84 convicted summonses against company responsible persons. The total sum of outstanding wages involved was around $530,000. In one of the cases, the company responsible person was remanded in custody for 38 days before being sentenced to imprisonment for four months, suspended for three years. In another case, the responsible person was given a community service order. For the remaining cases, fines were imposed.
LD also refers cases involving Fund abuses to the Official Receiver's Office, recommending that applications be made to the court for disqualifying the concerned company responsible persons from being directors and taking part in promotion, formation or management of a company. Altogether, 18 persons were so disqualified during April to October 2008, with the disqualification period ranging from one to five years.
Ends/Wednesday, November 19, 2008
Issued at HKT 11:41
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