Parliamentary Question by Mr Desmond Choo:

To ask the Minister for Finance how does the Government ensure that workers engaged for government contracts are paid for their work when either the main contractors or the latter's sub-contractors go into liquidation.

Parliamentary Reply by Minister for Finance Mr Heng Swee Keat:

Before contracts are awarded, Government agencies will take into consideration the financial standing of the contractor to ascertain whether he has the necessary resources to fulfil his contractual obligations. During the contract, government agencies will monitor the contractor's performance. If the contractor faces cash flow difficulties, the government agency can consider adjusting the payment milestones or delivery schedule.

In the unfortunate event of a contractor going into liquidation, the government like any service buyer, will rely on the provisions of the law to provide remedy for the affected workers. As the Minister for Manpower has previously shared with this House, when a contractor goes into liquidation, the Companies Act provides for the apportionment of the unpaid salaries for workers. Unpaid salaries of workers will be accorded higher priority over claims by other unsecured creditors. Affected workers can lodge salary claims with the appointed liquidator, who is required to give such claims, priority.

The Minister for Manpower has elaborated in his Parliamentary Response on other forms of assistance available as well as additional measures being put in place to help affected workers.

Source: MINISTRY OF FINANCE (MOF) (Parliamentary Replies)