Moral Hazard, Insolvency and Employees as Creditors: What Governance Lessons can be Learned from the Hong Kong Model?

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This article argues that each of the United States, the United Kingdom and Australia could take inspiration from Hong Kong's Protection of Wages on Insolvency Fund (POWIF) because it has the makings of a world-leading model for the protection of employee entitlements in circumstances of business failure. In particular, it is argued that although POWIF is open to fraud by unscrupulous employers it does not unduly increase moral hazard because its coverage provides only a modest safety net, it is funded by a mandatory private sector levy and it operates on a self-sustaining basis.

Document Type: Research Article


Publication date: October 1, 2011

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  • The Journal of Corporate Law Studies provides a forum for scholarship on corporate, securities and financial law broadly construed. Thus the Journal publishes articles on subjects as diverse as insolvency and the commercial conflict of laws, in addition to mainstream topics such as directors' duties and financial regulation. The Journal also embraces interdisciplinary work and work in cognate fields.Articles published in the Journal are subject to rigorous peer review. Shorter articles and notes are refereed where appropriate.
    The Journal is published twice a year in June and October.
    The journal will be of interest to academics and practitioners specialising in any of the subjects covered, and also to those with an interest in the strategic direction of the law and the influences which affect it - thus regulators, law and policy-makers, and the judiciary.
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