Article by Mr Charles Chauvel
Associate Commerce and Labour Minister Laila Harre has announced proposed changes to insolvency laws which would increase the present limit on priority credits for wages, also widening these payments to include redundancy compensation. The measures are aimed at giving employees better protection and improving the options open to individuals facing bankruptcy.
The Seventh Schedule of the Companies Act 1993 covers the priority of claims. The proposed changes would involve amending clause 6 of the Seventh Schedule, raising the present limit of priority in respect of money due to an employee from $6,000 to $15,000. Clause 2(a) of the Seventh Schedule prioritises the payment of "all wages or salary of any employee". Clause 2(a) would be amended to include reference to redundancy payments as well.
