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Arrear of Wages in Insolvency Cases
In October 2003 Council chaired a meeting with the Labour Department (LD) and the Legal Aid Department (LAD) to exchange views on whether any improvement could be made in respect of legal aid cases on arrear of wages involving LAD and LD. A Working Group with representatives drawn from both Departments was subsequently formed to follow-up matters.
The Working Group has met a number of times since October 2003 with the last meeting in November 2005. To facilitate speedier ex-gratia payment, both Departments agreed that the following three types of cases needed not be referred to LAD
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Cases where bankruptcy/winding-up petitions have already been issued;
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Cases where bankruptcy/winding-up orders have already been granted;
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Cases where the number of employees is less than 20 and the employer is a limited company undergoing voluntary liquidation. |
Hitherto, LD would refer employees in the above types of cases to apply for legal aid to take winding-up or bankruptcy proceedings. Under the new arrangement, the cases needed not be referred for legal aid.
In addition, it was agreed that employees would not be required to obtain a Labour Tribunal/Minor Employment Claims Adjudication Board Award before they were referred to LAD to apply for legal aid to take winding-up or bankruptcy proceedings if they had documentary proof of employment and the amount owed, or if there were reliable sources of information such as media reports showing that the employer company had closed down or had ceased business.
In order to monitor the operation of the simplified referral system and to continue the dialogue between LAD and LD on how to further improve the referral system to facilitate recovery of arrears of wages and other statutory benefits by employees, the two Departments agreed that the Working Group would meet twice a year to discuss operation issues and to endorse improvement measures.
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