If an employer becomes insolvent, it is obviously important that the employees’ entitlements should be well-protected. The EU has acted to consolidate and improve employee rights in this field.
An EU Directive (2008/94/EC) ensures payment of employees’ outstanding claims in the event of employer insolvency. It requires Member States to set up an institution to guarantee the payments.
The guarantee institutions must ensure payment of employees’ outstanding claims for a period determined by Member States. The Directive lays down an EU minimum guarantee period covering the remuneration for the last three months (within a reference period of at least six months) or eight weeks (within a reference period of at least eighteen months).
As regards occupational supplementary pension entitlements, the Directive requires Member States to adopt the necessary measures to protect them. This means that Member States have great flexibility when deciding the content of the measures.
If an insolvent employer had activities in at least two EU Member States, an employee’s outstanding claims must be met by the institution in the Member State where the employee worked.
The text of the Directive is available, together with a report on the implementation of these measures and a list of the national administrative authorities and/or guarantee institutions concerned.
Report from the Commission on the implementation and application of certain provisions of Directive 2008/94/EC on the protection of employees in the event of the insolvency of their employer. 28.2.2011 COM(2011) 84 final