Harry Elias Partnership Partner and Head of Restructuring and Insolvency Justin Chia commented in the Business Times article titled “Ex-honestbee staff in separate entity seeking unpaid wages”. The article was first published on 26 August 2020.
Ex-honestbee staff in separate entity seeking unpaid wages
These ex-employees said that in November last year, they were asked to resign from honestbee and sign a new employment contract under Fundeology, with their job scopes remaining unchanged.
Some former employees of honestbee who had their employment contracts transferred in November to a separate entity owned by former honestbee chief executive Ong Lay Ann have filed claims against Fundeology Pte Ltd for unpaid salaries, The Business Times has learned.
Below is an excerpt from the article which features comments from Justin:
Why did the employees agree to sign the new contracts with Fundeology?
One of them told BT: ”My understanding was that Fundeology was a special purpose vehicle to provide labour to honestbee, and to eventually be an entity for the restructuring. There wasn’t much difference from my original contract and I don’t think anyone else put up a fight about it.”
Another believed that honestbee would ultimately be responsible for the salaries of Fundeology employees. A third ex-employee had genuinely hoped that honestbee would successfully restructure and did not anticipate the liquidation.
It is important to be cautious when signing a new employment contract, particularly under distress situations, lawyers told BT.
Justin Chia, head of restructuring and insolvency at Harry Elias Partnership, said that employees of distressed firms asked to sign a contract with a new entity should consider whether the entity ”may be negatively impacted by financial difficulties faced by the original company, or plagued with similar issues of poor management later down the road.”
Full article can be found here.
Source: The Business Times
Author: Sharanya Pillai