THE EFFECT OF THE INSOLVENCY OF THE EMPLOYER ON THE RIGHTS OF THE EMPLOYEES

Authors

  • Andriana Matlioska Law Faculty “Iustinianus Primus”, Republic of North Macedonia

Keywords:

employment relationship, termination, rights from employment relationship, claims from employment relationship, bankruptcy procedure

Abstract

The insolvency of the employer, that is, his permanent inability to pay or settle the obligations to the
creditors, among other things, negatively affect the interests of the employees.
The bankruptcy procedure, understood at the same time as a collective settlement of the debtor's obligations from his
property and assets, often ends with the liquidation of the employer's business venture. On the day of the opening of
the bankruptcy procedure, there are numerous legal consequences that affect the position of the bankrupt debtor and
all persons related to him.
When opening the employer's bankruptcy proceedings, as a possible consequence of the employer's insolvency, the
treatment of their employment contracts is of particular importance for the employees. For the employees in a
company that is unable to pay the wages, as well as other outstanding debt for a longer period, the existence of their
employment in the event of the opening of bankruptcy proceedings is uncertain, as well as the circumstances of
whether and to what extent they will collect their claims arising from that relationship. The risks of the employer's
bankruptcy for employees are multiple, starting from the risk of job loss, the risk of loss of earnings and other
circumstances that may imply a threat to the employee's livelihood. Termination of the employment contract is
mandatory for all employees in case of bankruptcy, thus the effect of such an event to the employer entangles the
future of all employees, increasing the importance of analysis of the rights of employees, evaluation of the current
legislation vis a vie the legal trends in Europe and recommendation for future regulatory action that is needed as per
the author. Considering the significance that the insolvency of the employer has for the employees, but also due to
the effect that the insolvency manifests on their claims, which can significantly affect their livelihood, as well as due
to their specific position during the working relationship with the bankrupt debtor during the bankruptcy procedure,
this paper elaborates and shows the position of the employees of the bankrupt debtor as well as the rights they are
entitled to according to the law before, but also after the opening of the bankruptcy procedure, and at the same time
the protection of the employees’ claims in case of insolvency is analysed to their employer in accordance with
Directive 2008/94/EC as part of the secondary legislation of the European Union. Given that our legislation does not
provide the protection of employees from this perspective, the paper, by presenting the benefits of applying such
protection to employees, aims to point out the need to implement the provisions of this directive in the Macedonian
legislation as soon as possible.

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Published

2022-08-15

How to Cite

Matlioska, A. (2022). THE EFFECT OF THE INSOLVENCY OF THE EMPLOYER ON THE RIGHTS OF THE EMPLOYEES. KNOWLEDGE - International Journal , 53(1), 143–149. Retrieved from https://ikm.mk/ojs/index.php/kij/article/view/5498