Priority of debts
352.—(1)  Subject to the provisions of this Act, in the distribution of the property of a bankrupt, the following are to be paid in priority to all other debts:
(a)first, the costs and expenses of administration or otherwise incurred by the Official Assignee;
(b)second, the costs of the applicant for the bankruptcy order (whether taxed or agreed) and the costs and expenses properly incurred by a nominee in respect of the administration of any voluntary arrangement under Part 14;
(c)third, subject to subsection (2), all wages or salary (whether or not earned wholly or in part by way of commission), including any amount payable by way of allowance or reimbursement under any contract of employment or any award or agreement regulating the conditions of employment of any employee;
(d)fourth, subject to subsection (2), the amount due to an employee as a retrenchment benefit or an ex gratia payment under any contract of employment or any award or agreement that regulates the conditions of employment, whether such amount becomes payable before, on or after the date of the bankruptcy order;
(e)fifth, all amounts due in respect of any work injury compensation under the Work Injury Compensation Act 2019 or the Work Injury Compensation Act (Cap. 354, 2009 Revised Edition) repealed by that Act accrued before, on or after the date of the bankruptcy order;
(f)sixth, all amounts due in respect of contributions payable, during a period of 12 consecutive months commencing not earlier than 12 months before and ending not later than 12 months after the date of the bankruptcy order, by the bankrupt as the employer of any person, under any written law relating to employees’ superannuation or provident funds or under any scheme of superannuation which is an approved scheme under the Income Tax Act 1947;
(g)seventh, subject to subsection (2), all remuneration payable to any employee in respect of vacation leave, or in the case of the employee’s death, to any other person in the employee’s right, accrued in respect of any period before, on or after the date of the bankruptcy order;
(h)eighth, the amount of all taxes assessed, and any goods and services tax due, under any written law before the date of the bankruptcy order, or assessed at any time before the time fixed for the proving of debts has expired;
(i)ninth, all premiums (including interest and penalties for late payment) and other sums payable in respect of the bankrupt’s insurance cover under the MediShield Life Scheme mentioned in section 3 of the MediShield Life Scheme Act 2015, and the CareShield Life Scheme established by section 5 of the CareShield Life and Long‑Term Care Act 2019, respectively, before the time fixed for the proving of debts has expired.
[26/2019; 27/2019]
(2)  The amount payable under subsection (1)(c), (d) and (g) must not exceed such amount as the Minister may prescribe by order in the Gazette.
(3)  In subsection (1)(c), (d), (f) and (g) and this subsection —
“employee” means an individual who has entered into or works under a contract of service with the bankrupt and includes a subcontractor of labour;
“ex gratia payment” means an amount payable to an employee on the bankruptcy of the employee’s employer or on the termination of the employee’s service by his or her employer on the ground of redundancy or by reason of any re‑organisation of the employer, profession, business, trade or work, and “an amount payable to an employee” for these purposes means an amount ascertained from any contract of employment, award or agreement;
“retrenchment benefit” means an amount payable to an employee on the bankruptcy of the employee’s employer or on the termination of the employee’s service by his or her employer on the ground of redundancy or by reason of any re‑organisation of the employer, profession, business, trade or work, and “an amount payable to an employee” for these purposes means an amount ascertained from any contract of employment, award or agreement, or if no amount is so ascertainable, such amount as is determined by the Commissioner for Labour or by an Employment Claims Tribunal constituted under section 4 of the State Courts Act 1970;
“wages or salary” includes —
(a)all arrears of money due to a subcontractor of labour;
(b)any amount payable to an employee on account of wages or salary during a period of notice of termination of employment or in lieu of notice of such termination, whether such amount becomes payable before, on or after the date of the bankruptcy order; and
(c)any amount payable to an employee, on termination of the employee’s employment, as a gratuity under any contract of employment or any award or agreement that regulates the conditions of the employee’s employment, whether such amount becomes payable before, on or after the date of the bankruptcy order.
(4)  The debts in each class specified in subsection (1) rank in the order specified in that subsection, but debts of the same class rank equally between themselves, and are to be paid in full, unless the property of the bankrupt is insufficient to meet them, in which case the debts of the same class are to abate in equal proportions between themselves.
(5)  Where any payment has been made to any employee of the bankrupt on account of wages, salary or vacation leave out of money advanced by a person for that purpose, the person by whom the money was advanced, in a bankruptcy —
(a)has a right of priority in respect of the money so advanced and paid, up to the amount by which the sum in respect of which the employee would have been entitled to priority in the bankruptcy has been diminished by reason of the payment; and
(b)has the same right of priority in respect of that amount as the employee would have had if the payment had not been made.
(6)  Where any creditor has given any indemnity or made any payment of moneys by virtue of which any asset of the bankrupt has been recovered, protected or preserved, the Court may make such order as it thinks just with respect to the distribution of such asset with a view to giving that creditor an advantage over other creditors in consideration of the risks run by the creditor in so doing.
(7)  Where an interim receiver has been appointed under section 324 before the making of the bankruptcy order, the date of the appointment is, for the purposes of this section, deemed to be the date of the bankruptcy order.