Labour board agrees to extend wages fund to cover holiday pay

PUBLISHED : Tuesday, 26 May, 2009, 12:00am
UPDATED : Tuesday, 26 May, 2009, 12:00am

The Labour Advisory Board has agreed to extend the Protection of Wages on Insolvency Fund to cover annual leave payments for sacked workers.

Under the proposal, employees would receive compensation for seven to 14 days' leave pay, in addition to any outstanding wages, in the event they were laid off from businesses that could not afford to pay them off. The maximum amount that can be claimed for leave is HK$10,500.

Secretary for Labour and Welfare Matthew Cheung Kin-chung welcomed the move and said he expected the proposal to be passed by the Legislative Council.

'I do not think there will be a problem. In fact, introducing such an arrangement is a vital landmark, covering annual leave payments for sacked workers under the insolvency fund, especially during the current economic downturn,' he said.

He also said the fund was healthy, with a balance of about HK$1.56 billion. The extended coverage is expected to cost the fund HK$17.5 million a year.

'Even after the extended coverage, the extra spending will still be very limited as the ceiling of the payout [to cover the annual leave payments for sacked workers] is merely HK$10,500,' he said.

Speaking after a meeting of the Labour Advisory Board yesterday, employees' representative Ng Wai-yee said her fellow representatives were pleased that the proposal had won support from the employers' representatives.


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