Bankruptcy has major consequences for employees. It often means losing your job. But how does that work? What happens when a company makes a fresh start? And what are your rights? In this article we explain everything in plain language.
What is bankruptcy?
In the event of bankruptcy, a company can no longer pay its bills. A judge then appoints a trustee. This person manages the company and looks for solutions. This can be a restart, in which another company takes over the healthy parts of the bankrupt company. If that does not work, the company is closed down completely.
The examining magistrate (RC) mainly supervises the curator. He checks whether everything is done properly according to the rules.
For you as an employee this often means:
- You could lose your job.
- Your salary and holiday pay are partly arranged via the UWV. And that which is not taken over by UWV must be submitted to the curator
- When you make a fresh start, it is uncertain whether you will get a job again.
What are the rules for dismissal in bankruptcy?
If a company goes bankrupt, different rules apply to dismissal than normal. These are the most important points:
- Permission of the examining magistrate (RC): The curator may only dismiss employees after permission from the RC. The RC checks whether the dismissal is necessary and whether the process is fair.
- Short notice period: In the event of bankruptcy, a maximum notice period of six weeks applies, even if your contract contains a longer notice period.
- No transition payment: In a bankruptcy you are not entitled to a transition payment. After all, the company no longer has the money to pay for this.
- Notification obligation in case of collective dismissal: If 20 or more employees are dismissed, the curator must report this to the UWV and unions. This is only a report; the curator does not need to ask for approval.
What happens in the event of a restart?
- The new employer chooses who to hire: In a restart, the new owner decides which employees he needs. This may mean that you have to apply for a new job. It is also possible that the new owner chooses who he wants to take with him to the new company. Not everyone always gets a new job. This is different in the case of a transfer of business, if there is a restart that is prepared for the bankruptcy. All employees, including their employment conditions, then transfer to the new company.
- Other employment conditions: If you are hired by the new owner, you will receive a new employment contract. This may contain other conditions, such as a lower salary or fewer vacation days. Your years of service are also not transferred. Your employment is therefore completely new. If you had a permanent contract, your new employer is not obliged to offer you a permanent contract again. Unless you have been in permanent employment for 3 years. Your new employer also has the option to offer new employment conditions. Are you going to do the same work with your new employer? Then make sure that there is no trial period in your contract.
- Dismissal for employees who are not taken over: If you are not hired, you will lose your job. The UWV will then often take over the payment of your outstanding wages, holiday pay and unused holidays. Claims that are not taken over by the UWV can be submitted to the curator.
What happens if there is no restart?
If there is no restart, the company will be dissolved. This means:
- Dismissal for all employees.
- Payment via the UWV: The UWV pays your salary and holiday pay in arrears. Claims that are not taken over by the UWV can be submitted to the curator.
- Unemployment benefit: You can apply for unemployment benefits to limit loss of income.
What can you do as an employee?
- Request information from the curator: The trustee can explain to you what the bankruptcy means for you and what the next steps will be.
- Gather your documents now: Make sure you keep your pay slips, employment contract and other papers safe. You will need them for the UWV when applying for benefits.
- Search advice: Please contact De Unie if you need help understanding your rights or applying for unemployment benefits.
What does De Unie for you?
In the event of bankruptcy you can count on De Unie. We help you understand your rights, provide legal advice and support you with practical matters such as dismissal and benefits. Do you have any questions? Call us on 0345 851 963 or become a member!
