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.

Directives

• Directive 2008/94/EC of the European Parliament and of the Council of 22 October 2008 on the protection of employees in the event of the insolvency of their employer (Codified version) 

Abrogated Directives

• Directive 2002/74/EC of the European Parliament and of the Council of 23 September 2002 amending Council Directive 80/987/EEC on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer
• Council Directive 80/987/EEC of 20 October 1980 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer

Preparatory Documents

• Proposal for a Directive amending Council Directive 80/987/EEC on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer COM (2000) 832 

Implementation Reports

• Commission Report - Transposition of Council Directive 80/987/EEC of 20 October 1980 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer COM (95) 164 
• Commission Report - Transposition of Council Directive 80/987/EEC of 20 October 1980 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer in Austria, Finland and Sweden COM (96) 696  
• Commission Staff Working Document - Implementation of Article 8 of Council Directive 80/987/EEC SEC (2008) 475 

• 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 

• Limitations to the liability of the guarantee institutions (Implementation of Article 4 of directive 2008/94/EC) (2011) 

Studies

• Study on the implementation of Directive 80/987/EEC as amended by Directive 2002/74/EC on the protection of employees in the event of the insolvency of their employer in the EU Member States - EU-25 (2007)
• Reports (Executive Summaries) on the implementation of Directive 2008/94/EC in Bulgaria and in Romania (2009)
• Study on the protection of supplementary pensions in case of insolvency of the employer for defined benefit and book reserve schemes (2010) - Final report / Annex: Detailed information on the countries