The Business Times sought comment from Ian Lim, head of the firm’s Employment & Labour practice, for follow-up coverage on the sudden closure of Twelve Cupcakes and its impact on affected employees. The report examined workers’ rights to salary arrears and the laws governing job losses, drawing on views from insolvency and employment practitioners.

Ian explained that when a company liquidates its assets, secured creditors—typically banks, financial institutions or asset-based lenders—are first in line for repayment ahead of employees’ wages and CPF contributions. He added that most liquidations leave at least some funds, but in distressed cases secured creditors usually account for the bulk of what remains.

On retrenchment benefits, Ian noted that explicit severance clauses in Singapore employment contracts are uncommon. For unionised employers such as Twelve Cupcakes, there could be a collective agreement providing for such benefits; however, the absence of any reference to them so far suggests either that no agreement is in place, or that employees and unions are prioritising recovery of outstanding salaries and CPF contributions.

Ian also observed that workers can ordinarily seek recourse through the Employment Claims Tribunals, by filing salary-related claims or actions for wrongful dismissal.