Employees of bankrupt firms would see their maximum compensation increased under a proposal expected to take effect next month. The Protection of Wages on Insolvency Fund currently covers wages in arrears for the four months before an employee's final day of service, and a severance payment of up to $36,000, plus 50 per cent of any entitlement of more than $36,000. Under the Education and Manpower Bureau's proposal, the $36,000 cap on each type of payment would be raised to $50,000. The move to provide added protection to the growing number of workers losing their jobs because of business failures was praised by unionists, but they said it should have been made a long time ago. 'We had asked them to do that for the past two years,' said Elizabeth Tang Yin-ngor, chief executive of the Confederation of Trade Unions. 'Now, some workers do not get all the back wages, severance and long-service compensation they deserve.' Bureau Secretary Wong Wing-ping yesterday said the $50,000 cap would mean 90 per cent of workers in firms that were wound up would receive full compensation. Ms Tang said she believed employees who had been with a company for many years were losing out as compensation was based on a percentage of salary multiplied by the number of years' service. A bureau spokesman said officials adjusted the fund cap periodically to reflect salary levels to allow most workers to receive full payments. The last time the cap had been adjusted was in 1996 when the amount was increased from $24,000. Up to the end of last month, $314 million had been paid from the fund to workers, against $157 million in the corresponding period last year. Although payouts were increasing rapidly due to the large number of failed firms, bureau officials said the fund balance stood at a healthy $777 million.