Clause 23

by deleting subsections (1) and (2) and substituting the following subsections:“(1) Subject to the provisions of this Act, in a winding up there shall be paid in priority to all other unsecured debts —

firstly, the costs and expenses of the winding up including the taxed costs of a petitioner payable under section 256, the remuneration of the liquidator and the costs of any audit carried out pursuant to section 317;

secondly, subject to subsection (2), all wages or salary (whether or not earned wholly or in part by way of commission) including any amount payable by way of allowance or reimbursement under any contract of employment or award or agreement regulating conditions of employment of any employee;

thirdly, subject to subsection (2), the amount due to an employee as a retrenchment benefit or ex gratia payment under any contract of employment or award or agreement that regulates conditions of employment whether such amount becomes payable before, on or after the commencement of the winding up;

fourthly, all amounts due in respect of workmen’s compensation under the Workmen’s Compensation Act (Cap. 354) accrued before the commencement of the winding up;

fifthly, all amounts due in respect of contributions payable during the 12 months next before the commencement of the winding up by the company as the employer of any person under any written law relating to employees’ superannuation or provident funds or under any scheme of superannuation which is an approved scheme under the law relating to income tax;

sixthly, all remuneration payable to any employee in respect of vacation leave, or in the case of his death to any other person in his right, accrued in respect of any period before the commencement of the winding up; and

seventhly, the amount of all tax assessed under any written law before the commencement of the winding up or assessed at any time before the time fixed for the proving of debts has expired.(2) The amount payable under subsection (1)(b) and (c) shall not exceed an amount that is equivalent to 5 months’ salary whether for time or piecework in respect of services rendered by him to the company or $7,500, whichever is the lesser.(2A) (a) For the purposes of subsection (1)(b) and (c) —“employee” means a person who has entered into or works under a contract of service with an employer and includes a subcontractor of labour;“wages or salary” shall be deemed to include —

all arrears of money due to a subcontractor of labour;

any amount payable to an employee on account of wages or salary during a period of notice of termination of employment or in lieu of notice of such termination, as the case may be, whether such amount becomes payable before, on or after the commencement of the winding up; and

any amount payable to an employee, on termination of his employment, as a gratuity under any contract of employment, or under any award or agreement that regulates conditions of employment whether such amount becomes payable before, on or after the commencement of the winding up.(b)For the purposes of subsection (1)(c) —“ex gratia payment” means the amount payable to an employee on the winding up of a company or on the termination of his service by his employer on the ground of redundancy or by reason of any re-organisation of the employer, profession, business, trade or work, and “the amount payable to an employee” for these purposes means the amount stipulated in any contract of employment, award or agreement, as the case may be;“retrenchment benefit” means the amount payable to an employee on the winding up of a company, on the termination of his service by his employer on the ground of redundancy or by reason of any re-organisation of the employer, profession, business, trade or work, and “the amount payable to an employee” for these purposes means the amount stipulated in any contract of employment, award or agreement, as the case may be, or if no amount is stipulated therein, such amount as is stipulated by the Commissioner for Labour.”;