A FLAW IN THE BANKRUPTCY ACT.

Dunstan Times, Issue 1140, 7 March 1884, Page 4

A FLAW IN THE BANKRUPTCY ACT.

I here is one point on which the Christchurch * telegraph’ thinks the new Bankruptcy Act requires some amendment, and that is in regard to the protection of employees tor the payment of their wages by insolvent employers. All similar Acrs, for obvious lessons, make provisions to secure a certain amount of preference being given to such claims. But the new Act contains a clause vrhicn, while professing to do the same thing is so worded that what it is evi ien I' intended to achieve cm be comp ! etelv frustrated. So that, to all intents and purposes, under the, new Act employes have no preference over ordinary creditors. Ihe c'anse bearing on this polo No. 137—is mportant, and we give extract from it. It gives priority to the following over all other debts • xcept claims for rent ; ‘l. Ad wages orsalary of anv.clerk or servant in theemolo - met of the bankrupt at the dace of the order of adjudication, and not exceeding three months’ wages or salary ; and not exceeding £IOO. 2. All wages of any artisan, labourer, or workman, whecli r skilled or unskilled, in the employment of the bankrupt, at the d te, of the order of adjudication, and not exceeding th ee months’ wages j at current rates. 3. All wages of any artisan, labourer, or workman, whether skilled or unskilled, in the employment ot the bankrupt at piecework at the date of ihe order of adj - dication, and not exceeding the amount earned at such piecework in the three mouths preceding such order.” It will be seen at once that while the clause referred to is intended to provide that the wages of employees should be paid before ad other deb's except rent, it really does not secure that at ail. A case that occurred the other day in the Eana ikei district will clearly illustrate this fact. A contractor unde" the County Council got into difficulties, and levanted without pay i. g his workmen They were advised to get him declared a bankrupt, so that they might put in; a preferential ciaim on his assets. Be- : fore taking this step, however, it was I discovered that owing to the fact that they were not then in his employment —having engaged by the dav—and-, therefore they could not be so at the date of his being adjudicated a bankrupt, as required by the Act, the clause could not be made to apply to j their e°se. It is clear that not at all | a peculiar case. Similar ones have 1 happened over and over again in this • country, and similar ones m-iy occur I at any time in the future. And if our reading of the Act is correct, it inflicts a great injustice on a class of persons it is tin* special duty of the law to protect.