Workers must be paid ahead of all other creditors when companies collapse, Prime Minister Mia Mottley told Parliament on Tuesday, as she defended new legislation aimed at ensuring wages owed are settled promptly even in insolvency.
Mottley said the Protection of Wages Bill, which went before the House of Assembly for its second reading, reinforces workers’ right to receive wages and other payments owed to them, even when a company closes, becomes insolvent or enters bankruptcy.
The legislation is the latest in a suite of Mottley administration bills intended to strengthen protections for employees and ensure that wages are treated as a legal obligation rather than a discretionary payment.
She told the House that a business’s failure does not eliminate its obligation to pay employees, underscoring the importance of protecting workers during periods of economic uncertainty.
“Leaving a job or seeing that a business fails in which you are working does not erase the obligation to pay the employees,” Mottley said.
Existing insolvency legislation already recognises the need to protect workers and the National Insurance Scheme (NIS) by giving them priority status among creditors, she said.
“One of the reasons why in our insolvency legislation, there is priority given to workers and to NIS is because we understand the social fabric that will be torn if we don’t protect the people even in the face of closures, in the face of insolvency, and ultimately even in the face of bankruptcy.”
Mottley pointed to clause 18 of the bill, which establishes a clear timeline for outstanding payments owed to workers at the end of their employment:
“Clause 18 requires that all wages and other amounts already due at the end of employment to be paid no later than the payday of the next pay period.”
The provision would apply in situations where a business fails while still owing money to employees, she explained.
Using an example of a company owing a worker $2 000, the prime minister said that the employee must be paid before other creditors, such as suppliers.
“If a failed business owed somebody a worker $2 000, then that business has to make sure that that worker has priority to receive that $2 000 before the business pays a supplier of goods that would normally be a creditor that would normally have to be paid.”
The provision was also intended to guide small businesses facing financial strain, Mottley said, reminding employers that workers’ wages cannot be ignored when deciding which debts to settle.
“I’m saying this for the benefit of small employers as well. So that you know that if you’re going through a rough time and the money’s short, and you’re going to decide who you have to pay, don’t go break the law and pay the creditor; pay the worker first.”
(SB)
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