Employee Priority and the Moral Foundations of Insolvency Proceedings: A Comparative Inquiry

Abstract

Abstract

This article examines how Malaysian, United Kingdom, and Australian courts interpret employee priority in corporate insolvency through Ronald Dworkin's theory of law as integrity. Using a doctrinal-interpretative comparative method, it evaluates selected cases against three indicators derived from Dworkin's framework: fit, moral justification, and interpretive integrity. The analysis demonstrates that Australian reasoning most closely reflects integrity through purposive interpretation and the Fair Entitlements Guarantee (FEG), while United Kingdom courts display intermediate integrity through cautious doctrinal engagement with fairness. Malaysian courts show strong statutory fit but limited moral justification for outcomes affecting employees. The article argues that Malaysian insolvency adjudication can progress toward integrity by harmonising statutory priority with labour-law values, international standards, and principled cross-doctrinal reasoning. Three reform priorities are propose, establishing a state-backed wage guarantee fund, developing judicial guidance for cross-doctrinal harmonisation, and cultivating an interpretive culture that treats the Companies Act 2016 as part of a coherent moral order.