A FLAW IN THE BANKRUPTCY ACT.

Wairarapa Daily Times, Volume 6, Issue 1606, 11 February 1884, Page 2

A FLAW IN THE BANKRUPTCY ACT.

There is one point ou which we think the new Bankruptcy Act requires somo amendment.and that is in regard to the protection of employes for the payment of their wages by insolvent employers. All similar Acts, for obvious reasons, make provision to secure a certain amount, of preference being given to such claims. But the new Act contains a clause which, while professing to do the samo thine;, is so worded thatwhat itisevidently intended to achieve can be completely frustrated, So that, to all intents and purposes, under the new Act employees have no preference over ordinary creditors, The clause bearing on this point—No. 137—is important, and we give an extract from it. • It gives priority to the following over all "other debts, except claims for rent:-"I. All wages or salary'of any clerk or servant in the employment of the bankrupt a! the date 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, whether skilled or unskilled, -in -the employment ol the bankrupt at the date of the order of adjudication, mil not exceeding three months' wages at current rates. 3. All wages of any artisan, labourer, or workman, whether skilled or unskilled, in the employment of the bankrupt at piecework at the date of the order of adjudication, and not exceeding, tho amount earned at such piecework in the three months preceding such order." The Italicsaro ours, It will be seen ot once that while the clause referred to is intended to provide that tho wages of employers should be paid before all other debts except rent, it really does not secure this at all, A ease that occurred the other day in the Rangitikei district will clearly illustrate this fact.. A contractor under the County Council got into difficulties, and levanted without paying his workmen. They were advised to get him declared a bankrupt, so that they might put in their preferential claims on his assets. Before taking this.step, however, it was .discovered that owing to the fact that they were not then in his employment—having been engaged by tho day—and therefore they could not be so at the dak oj his being adjudicated a bankrupt, as required by the Act, the clause could not be made to apply to their case. - It is clear that this is not by case. Similar ones havo happened over and over again in this country/and similar ones may occur at any time in the future, And, if our reading of the Act is correct, it inflicts great injustice on a class I of persons it is the special duty of tho lawtQproteot,~y/tgy#'ff/>/l,