Direct Request (CEACR) - adopted 2001, published 90th ILC session (2002)

The Committee notes with interest the Government’s first report on the application of the Convention. The Committee would appreciate receiving additional information on the following points.

Articles 5 and 6 of the Convention. The Committee notes that under section 85(1) of the Insolvency Act (Cap. 42:02), servants’ wages shall be paid out of the free residue of the estate, in priority to other claims but after the payment of funeral expenses, death-bed expenses and the costs of sequestration, up to an amount not exceeding P100 in respect of arrears of wages for one month and the wages for the month current with the sequestration, if the servant of the insolvent is engaged by the month, and in respect of arrears of wages for one week and the wages for the week current with the sequestration if the servant of the insolvent is engaged by the week. The Committee recalls, however, that according to the relevant provisions of Part II of the Convention, privileged workers’ claims should cover as a minimum: (i) wage claims relating to a prescribed period which may not be less than three months prior to the insolvency or prior to the termination of employment; (ii) holiday pay due for work performed during the year in which the insolvency or the termination of employment occurred and in the preceding year; (iii) other types of paid absence (e.g. sick leave or maternity leave) relating to a period which may not be less than three months prior to the insolvency or prior to the termination of employment; and (iv) severance pay. While noting the Government’s statement to the effect that the Insolvency Act has not yet been modified in order to specify the workers’ claims to be protected as privileged debts, the Committee hopes that the Government will make every effort to take the necessary action in the very near future to give full effect to the requirements of the Convention in this regard.

Moreover, the Committee understands that the term "servant" is used throughout the Insolvency Act in the broader sense of a person being in the employment of another, and not in the narrow sense of a domestic worker. The Committee would appreciate receiving additional information on the exact meaning of the term "servant" as employed in the Insolvency Act and accordingly on the scope of application of section 85(1) of the Act.

Article 7. The Committee notes that under section 85(1) of the Insolvency Act a maximum amount is fixed for the workers’ wage claims which may be paid out as priority claims in the event of the employer’s insolvency. The Committee recalls that the Convention allows for the limitation of the protection by privilege of workers’ claims to a prescribed amount provided that the amount is not below a socially acceptable level and requires that such amount should be periodically adjusted as necessary so as to maintain its value. While noting the Government’s statement that the Insolvency Act has not been modified to give effect to the provisions of the Convention, the Committee hopes that the necessary measures will be taken in the near future to bring the national legislation into substantial conformity with the Convention and requests the Government to indicate in its next report any progress made in this respect.

The Committee would be grateful to the Government for information on the application in practice of the Convention in accordance with Part IV of the report form.