In Parliament on 13 Jan 2026 I raised concerns about workers left in the lurch when companies suddenly close down. It is heart-breaking when employees lose their jobs and their hard earned wages all at once. I asked the Minister for Manpower if we can mandate wage recovery insurance or make directors personally liable for unpaid salaries. I also suggested changing the law so workers are paid before secured creditors without needing to file extra claims. We must ensure our laws deter irresponsible closures and put our people first.
The Minister explained that employees already rank high for payouts during liquidation. He shared that about 260 workers received financial help from the Short Term Relief Fund over the last three years. While there are career support schemes like Career Health SG to help with new jobs the government believes current laws strike the right balance.
This is the full question and answer:
Support for Employees Affected by Abrupt Closure of Companies and Proposal to Amend Insolvency, Restructuring and Dissolution Act 2018 to Prioritise Payout to Employees
Mr Gerald Giam Yean Song asked the Minister for Manpower for each of the last three years (a) how many workers have been affected by corporate liquidations and what is the total quantum of unpaid wages; (b) how many workers received payouts from the short-term relief fund; and (c) what is the total amount disbursed to these affected individuals to help them tide through financial difficulties following the abrupt closure of their employers.
Mr Gerald Giam Yean Song asked the Minister for Manpower whether the Ministry will explore (i) mandatory wage recovery insurance, (ii) personal liability for directors for unpaid salaries and (iii) amending the Insolvency, Restructuring and Dissolution Act 2018 to prioritise employees over secured creditors by default without requiring employees to file claims with the Tripartite Alliance for Dispute Management, to deter irresponsible business closures and ensure workers are paid first.
Dr Tan See Leng: When businesses wind up, including preparing for and during liquidation proceedings, firms should act responsibly and ensure that workers’ salaries are paid on time to the best of their abilities.
The Government fully recognises the importance of employees’ claims on salaries in the event of their employers winding up. In the Insolvency, Restructuring and Dissolution Act, employees’ claims are already ranked first and above all other unsecured debts, and are behind only the costs and expenses of administration, which are necessary for the winding up to proceed smoothly.
We have measures in place to support employees and ensure responsible business practices. The Ministry of Manpower (MOM) investigates and takes action against employers who breach employment legislation when winding up, including those who wilfully do not pay salaries despite having the means to do so. If employers truly cannot pay their salary arrears due to business failure, the Short-Term Relief Fund (STRF) is available to provide financial assistance to eligible local lower-income workers.
Between 2023 to 2025, about $600,000 was disbursed from the STRF to 260 workers who did not receive their salaries due to corporate liquidation. MOM does not track the total number of workers with unpaid wages due to corporate liquidations.
We also provide workers who have lost their jobs with support to search for and take on new jobs with good longer-term prospects. Local workers may tap on career matching services and training programmes offered by Workforce Singapore (WSG), SkillsFuture Singapore and Employment and Employability Institute, and may also receive temporary financial support under the SkillsFuture Jobseeker Support scheme. Lower-income households who require financial assistance to meet basic needs may also approach their Social Service Office.
Beyond measures to support displaced workers, the Government encourages and supports Singaporeans to take care of their career health and stay relevant in their jobs. Under the Career Health SG programme, workers can tap on various tools to do so, such as the CareersFinder feature on WSG’s MyCareersFuture job portal and the Polaris career guidance programme. Such programmes help workers to be better equipped to navigate challenges and stay resilient in their careers.
Source: Singapore Parliament Reports (Hansard)
