Provisional Supervision and Workers' Wages: An Alternative Proposal

Hong Kong Law Journal, Vol. 31, No. 2, p. 188, 2001

Posted: 28 Aug 2006 Last revised: 12 Feb 2010

See all articles by Philip Smart

Philip Smart

The University of Hong Kong - Faculty of Law

Charles D. Booth

Institute of Asian-Pacific Business Law, William S. Richardson School of Law, University of Hawaii at Manoa; University of Hawaii at Manoa - William S. Richardson School of Law

Abstract

In May 2001, the Companies (Corporate Rescue) Bill was gazetted. The Bill makes provision for a statutory corporate rescue mechanism, to be known as provisional supervision. The most controversial aspect of the Bill is the treatment of workers' wages. The Bill essentially requires that before a company may even enter into provisional supervision, it must have paid off in full all debts (and other entitlements) owing to its workers. The Bill does not, however, explain how a financially distressed company is supposed to find the cash to meet the statutory requirement. This requirement may also be criticised because it is at odds with the treatment of workers' wages in other insolvent procedures, thus leading to unfairness. This article proposes an alternative approach, one which, it is suggested, is in the interests of both financially troubled companies and their workers.

Suggested Citation

Smart, Philip and Booth, Charles D., Provisional Supervision and Workers' Wages: An Alternative Proposal. Hong Kong Law Journal, Vol. 31, No. 2, p. 188, 2001, Available at SSRN: https://ssrn.com/abstract=926659

Philip Smart (Contact Author)

The University of Hong Kong - Faculty of Law ( email )

Pokfulam Road
Hong Kong, Hong Kong
China

Charles D. Booth

Institute of Asian-Pacific Business Law, William S. Richardson School of Law, University of Hawaii at Manoa ( email )

University of Hawai'i at Manoa
2515 Dole Street
Honolulu, HI 96822-2328
United States

University of Hawaii at Manoa - William S. Richardson School of Law ( email )

2515 Dole Street
Honolulu, HI 96822-2350
United States

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