Our Labour and Employment lead Ian Lim lent his expertise to a recent Straits Times report examining the legal fallout facing some 400 migrant workers left stranded after the director behind three companies — VVR Plant Engineering, KPA Engineering and SK Industries — absconded, leaving between two and four months of wages unpaid.

The article explored the foreign worker quota framework, the legal consequences for employers who fail to pay salaries and the financial safeguards available to migrant workers caught in such a predicament.

Ian highlighted the challenges migrant workers face when an employer’s company goes bust. While workers may file salary claims through the Tripartite Alliance for Dispute Management (TADM) and, if mediation fails, escalate the matter to the Employment Claims Tribunals, the picture becomes considerably bleaker once a company enters liquidation. In such cases, workers must pursue their claims through the liquidation process, with any recovery dependent on the company’s remaining assets and whether secured creditors stand ahead of them in the queue.

Ian noted that under the legal order of priority, employees’ unpaid wages do rank ahead of most unsecured debts — offering a degree of protection in principle. However, he cautioned that where a company has no real assets or cash, employees may ultimately receive nothing at all.