Workers whose employers go broke will be in line for up to $15,000 in priority payouts under changes to insolvency laws announced by the Government yesterday.
The Council of Trade Unions welcomed the plan as a significant improvement for workers, but said it had lobbied for the ceiling forpriority wage claims to be lifted to $20,000 from the present $6000.
Equally enthusiastic was the Engineering, Printing and Manufacturing Union, representing 600 of 1100 former staff of the bankrupt airline Qantas New Zealand, some of whom are owed more than $60,000 each in redundancy and holiday pay.
Unsecured creditors owed almost $130 million are unlikely to get much more than 7c in the dollar, and several dozen employees of the company's regional air subsidiary are still waiting for their $6000.
Engineers' Union national secretary Andrew Little said: "The sad thing is that it's come too late for the employees of Qantas New Zealand and many other companies that have gone under owing their workers millions of dollars."
Associate Commerce Minister Laila Harre said redundancy payments as well as unpaid wages and holidays could be included within the new priority limit, although only about 70 per cent of unionised workers and few on individual contracts have redundancy cover.
Redundancy entitlements above the $15,000 limit will have to sit with other unsecured debt.
Ms Harre acknowledged a need to treat particular classes of creditors equally, but said the rights of vulnerable groups such as employees warranted special protection.
