In the event of the employer’s bankruptcy, the employee’s employment contract is terminated with immediate effect. To compensate for the loss of their source of income, and in the absence of any continuation of the business by the bankruptcy trustee or by the employer’s successor, the employee is entitled, subject to certain conditions, to:
- continued payment of wages relating to the month in which the bankruptcy occurs and the following month;
- payment of a special allowance equal to 50% of the notice period to which the employee would have been entitled in the event of dismissal with notice.
However, the wages and allowances granted to the employee may not exceed the amount of the wages and allowances to which the employee would have been entitled in the event of dismissal with notice.
Examples:
- Employee with 4 years of seniority at the time the bankruptcy occurs in January
Principle in the event of bankruptcy: The employee would be entitled to the salary for the month in which the bankruptcy occurs (January), for the following month (February), and to payment of a special allowance equal to 50% of the notice period to which the employee would have been entitled in the event of dismissal with notice (50% of 2 months = 1 month).
Limitation: In the event of dismissal with notice, the employee would have been entitled to a notice period of 2 months and the corresponding salary.
For this employee, the limitation provided for by the Labour Code applies, as the wages and allowances granted may not exceed the wages and allowances to which the employee would have been entitled in the event of dismissal with notice.
In view of the above, the employee may claim an amount corresponding to 2 months’ salary, which corresponds to the salary that would have been paid during the notice period in the event of dismissal with notice.
- Employee with 6 years of seniority at the time the bankruptcy occurs in January
Principle in the event of bankruptcy: The employee would be entitled to the salary for the month in which the bankruptcy occurs (January), for the following month (February), and to payment of a special allowance equal to 50% of the notice period to which the employee would have been entitled in the event of dismissal with notice (50% of 4 months = 2 months).
Limitation: In the event of dismissal with notice, the employee would have been entitled to a notice period of 4 months and the corresponding salary, as well as a statutory severance payment of 1 month.
For this employee, the limitation provided for by the Labour Code does not apply, as the wages and allowances granted as a result of the employer’s bankruptcy do not exceed the wages and allowances to which the employee would have been entitled in the event of dismissal with notice.
In view of the above, the employee may claim an amount corresponding to the salary for the month in which the bankruptcy occurs (January), for the following month (February), and payment of a special allowance equal to 50% of the notice period to which the employee would have been entitled in the event of dismissal with notice (50% of 4 months = 2 months).