Workers may still claim wages in case of bankruptcy of employers even without formal declaration of insolvency under a bill awaiting Senate’s approval.
“Workers should be given first lien in case of bankruptcy to satisfy their money claims against the business. Such money claims should not require formal declaration of bankruptcy or insolvency to save workers and their families from slipping into the quagmire of mere subsistence or poverty,” said party-list Rep. Raymond Democrito C. Mendoza.
Mendoza sought to protect the rights of the workers to be the first lien in case of bankruptcy of the employer in House Bill 5308, which has been approved by the House of Representatives on third and final reading and transmitted to the Senate for action.
“The bill requires that in the event of bankruptcy of the employer, the workers should be given the first preference as regards their wages and other monetary claims,” Mendoza said.
Mendoza said the bill likewise provides that unpaid wages and other monetary claims shall be paid in full even without the formal declaration of bankruptcy or insolvency.
At present, Mendoza said workers are at a disadvantage when employers start non-payment of their wages, benefits and other entitlements in cases of employers’ bankruptcy.
“This should not be the case because the Constitution mandates the State to protect the rights of workers and promote their welfare,” Mendoza said.
Mendoza said Presidential Decree No. 442, otherwise known as the Labor Code of the Philippines, declares as a State policy to provide protection to labor.
“One such protection to labor is to satisfy their claims against the employers’ business,” Mendoza said.