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Labour Department's response to media enquiries

     In response to media enquiries about the closing down of DSC and the development in relation to the recovery of unpaid wages by the employees, a spokesman for the Labour Department (LD) today (August 10) gave the following reply:

     "Since the closing down of DSC, LD has assisted the affected employees to register their claims as quickly as possible and lined up a conciliation meeting for the employer and employee sides. We have also worked hard to seek to establish contact with the employer via different channels."

     The spokesman said, "The objective of the conciliation meeting arranged by the LD today is for the employer and the employees of DSC to meet and discuss matters regarding the recovery of unpaid wages. However, this afternoon the employer informed the LD through his legal representative that he was unable to attend the meeting. The LD has immediately contacted the legal representative with a view to establishing contact with the employer as soon as possible for the confirmation of the employees' claimed items and amount.

     "At the same time, the LD has made special arrangement with the Labour Tribunal (under the Judiciary) so that some members of the employee representatives may proceed swiftly to the Tribunal tomorrow to register their claims for early adjudication. We hope that the employees can take forward the related legal proceedings as early as possible to establish the items and amount of claims they are entitled to, and to substantiate the insolvency of the employer."

     As regards the procedures on the application for the ex gratia payment from the Protection of Wages on Insolvency Fund (PWIF), the spokesman explained that, "Before granting the ex gratia payment to the applicants, PWIF must verify the items and amount to be claimed under each application, and to confirm the insolvency of the employer. If the employer and employee fail to reach consensus over the claims of the employee, including the items and amount of the claims, the LD will refer the claimant to the Labour Tribunal for adjudication so that the items and amount of claims that the employee is entitled to can be established."

     The spokesman pointed out that under the Protection of Wages on Insolvency Ordinance, the presentation of a winding-up petition (for limited companies) is a prerequisite for ex gratia payment from PWIF.

     "As regards the case of DSC, the LD will try our best to assist in referring the affected employees to the Legal Aid Department (LAD) in presenting petition against their insolvent employer. The LD will also assist to expedite the procedures as far as practicable. Having said that, as the procedures undertaken by both the Labour Tribunal and the LAD involve legal proceedings, the LD will provide assistance at our best, but we do not have the authority to and cannot intervene the legal proceedings concerned," he said.

     "Upon receipt of the employees' applications for ex gratia payment, the LD will process them as quickly as possible and will arrange for payment as soon as practicable. However, the time required for processing and verification of each application will depend on whether sufficient information and evidence have been provided. These include supporting documents for the claims, such as the items and amount owed and admitted by the employer; records of wage payment to the employee; and the award issued by the Labour Tribunal. If there is sufficient supporting information, the LD pledges to arrange for granting of the ex gratia payment from PWIF to the eligible applicants within 10 weeks upon receipt of all the information and documents required."

     The spokesman also emphasised that the case of DSC could not be compared directly with that of the Yaohan group (Yaohan) in the past.

     "Yaohan took the case to High Court itself to present a (mandatory) winding-up petition on November 20, 1997. The court appointed a provisional liquidator to handle the winding-up of Yaohan on the same day, and Yaohan also ceased its business and arranged severance to all employees the same day. As there stood a petition for the winding-up of Yaohan, the LD was able to assist employees of Yaohan to make applications for PWIF payment immediately. The provisional liquidator of Yaohan could also confirm the amount of outstanding payment for the employees within a short period of time, and to provide employment records as a proof to facilitate verification of the employees' applications. The affected employees managed to be granted the ex gratia payment from PWIF about a month after the cessation of business of Yaohan with the cooperation of all parties concerned.

     "However, there is no presentation of petition for the winding-up of DSC so far. Also, there are more items covered by PWIF today and the calculation is more complicated compared with that in the past. Therefore, the case of DSC cannot be compared with the case of Yaohan. We hope that the affected employees can take forward the related legal proceedings as early as possible to establish the items and amount of claims they are entitled to, and to substantiate the insolvency of the employer," the spokesman said.

     The spokesman reiterated that the LD will assist to refer the employees to the LAD to present petition for the winding-up of their employer as quickly as possible.

Ends/Monday, August 10, 2015
Issued at HKT 23:31


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