2. I am an employee of a company that has just been wound-up. Can I recover my unpaid wages?

2. I am an employee of a company that has just been wound-up. Can I recover my unpaid wages?

As an employee you are considered to be a "preferential" creditor of the company. If a bankruptcy or winding-up order has been granted against the employer, the employee is entitled to receive payments (in respect of wages, wages in lieu of notice and severance payments that fall under the statutory limits) out of the employer's assets in preference (with priority) to most other creditors.

For example, an employee (as a preferential creditor) can recover the arrears of wages up to a maximum of $8,000 in respect of services rendered to his/her employer.

Any arrears of wages, wages in lieu of notice, or severance payments in excess of the statutory limits are considered “non-preferential debts”, and the employee will be treated as an ordinary creditor with respect to any amounts claimed in excess of the statutory limits .

However, whether you will be paid even the amounts within the statutory limits will depend on the company's assets available. You may consider applying to the Labour Department for gratuitous payment from the Protection of Wages on Insolvency Fund .

For more details on insolvency claims which relate to employment matters, please go to another topic - Employment Disputes in CLIC.