Bankruptcy can bring great uncertainty for employees. The financial problems of an employer have a direct impact on the employment relationships, such as employees. In this blog we explain what exactly happens to employment contracts in the event of bankruptcy, what the role of the trustee is, and what rights employees have.
The fate of current employment contracts
When an employer is declared bankrupt, a current employment contract will in principle continue to exist until formal termination takes place. This means that in the meantime you are still formally employed and are entitled to wages. In practice, however, a bankrupt employer often no longer pays wages. That is why the UWV acts as a safety net in these types of situations and can take over part of your outstanding wages and holiday pay.
The trustee, who is appointed by the court, has the task of deciding whether employment contracts should be terminated. This usually happens because the business activities are being discontinued or sold.
The role of the curator
The trustee plays a crucial role in the process. This person represents the interests of the creditors and examines whether there are still possibilities to continue the company (in part) or to sell assets. As part of this process, the trustee can terminate employment contracts. The trustee may terminate employment contracts. He must take the notice period into account, but the maximum notice period in the event of bankruptcy is a maximum of six weeks.
Employees' rights
Employees are well protected by law in the event of bankruptcy. These are some of your most important rights:
- UWV wage guarantee scheme: The UWV will take over your outstanding salary and holiday pay under certain conditions. the notice period can be partly reimbursed by the UWV.
- Priority among creditors: Employees have a preferential position as creditors. This means that any payments from the bankrupt estate will go to employees first before ordinary creditors are paid.
- Takeover of employment contracts in the event of a restart: Is a bankrupt company taken over and is it making a fresh start? Then the new company can choose to take employees with it. However, this is not an obligation.
Exceptions and special situations
- In collective labor agreements (CLAs): If a collective labour agreement applies, it may contain additional rules for the settlement of employment contracts in the event of bankruptcy.
- For special sectors: In some sectors, such as healthcare, specific rules apply to ensure continuity. This can affect how employment contracts are handled.
- Individual appointments: In some cases, agreements can be made with employees regarding buyout or transfer to a new employer.
What can you do as an employee?
- Check your situation: Ask the trustee for clarity about your employment contract and your rights.
- Ask the UWV for help: Submit an application to the UWV for wage takeover as soon as possible.
- Get legal help: The specialists of De Unie are ready to support you in labor disputes and to help you exercise your rights.
What can De Unie mean to you?
In the event of bankruptcy, it is important to be well informed and assisted. De Unie offers legal support and advice to ensure that you do not miss out on anything you are entitled to. Become a member and make use of our expertise. Do you have any questions? Call us on weekdays between 8:30 and 17:00 on 0345 851 963 or send an email to sc@unie.nl.
