How to better protect workers hit by sudden closures

Legal frameworks can be strengthened but timely payment not guaranteed: Lawyers

- Krist Boo Senior Business Correspondent

shuttered Twelve Cupcakes chain preparing to meet union representatives at the office of the Food, Drinks and Allied Workers Union on Nov 4. The recent abrupt closure of businesses such as Twelve Cupcakes left hundreds of workers without jobs and owed unpaid wages. ST PHOTO: BENJAMIN LIM

(ST PHOTO: BENJAMIN LIM)

The recent abrupt shuttering of businesses including Art Works, Twelve Cupcakes and Jollibean left hundreds of workers without jobs and owed unpaid wages.

“Unfortunately, this is not the first time we have seen businesses cease operations abruptly, and it highlights recurring vulnerabilities in the current framework,’ noted Ms Viviene Sandhu, co-managing partner at Clifford Law.

The Straits Times speaks to her and two other lawyers with specialisations in employment law and regulatory compliance on what can be done to protect workers.

A MOM is currently reviewing a proposal from the National Trades Union Congress to require employers to notify the Government before layoffs, rather than after.

Mr Clarence Ding, a partner at law firm Ashurst, said mandating that liquidators notify creditors, including employees, in advance would give workers time to prepare.

He noted, however, that this still would not guarantee that workers receive timely payment. Employees may get paid after the liquidation process is complete, but they may not necessarily get all the monies they are owed.