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EP hearing on protection of workers in insolvency cases

Others Article - Employment policy14-04-2011 - 15:49
Employees in a meeting, seen through blinds ©Getty Image   Levels of protection set nationally ©Getty Image

Should the EU provide more protection to workers whose companies go bust? At present it obliges member states to pay employees outstanding wages in case of insolvency. However, the payment ceiling, the definition of an "employee" and the period for which outstanding claims are paid are decided nationally and there are big differences between member states.

With the number of insolvent businesses needing help in guaranteeing wages rising 20% in 2009, an Employment Committee hearing Wednesday discussed whether there should be more coordination at EU level.

British Conservative Julie Girling, who is drafting a report on insolvency proceedings in the context of EU company law, said the EU has succeeded in creating a minimum standard of protection for workers who have lost their jobs and have not been fully paid. "If something's not broken, don't try fix it. If for example in Belgium 98% of the claims are met, we have to ask where is the problem?"

Harmonisation could hurt competition - MEP

She is concerned that greater harmonisation could have a negative impact on competitiveness and does not consider it necessary to guarantee a minimum figure at EU level.

However, a representative from the European Trade Union Confederation (ETUC) was concerned about whether the rules provide enough protection for all workers, in the context of the economic crisis and the increasing risk "that companies are becoming unable to meet their duties towards their employees."  For a large number of workers unpaid wages exceed the payment ceilings and time limits set by member states, Wiebke Warneck, a legal advisor from ETUC said.  

The Commission is reviewing the implementation and application of the rules and "will continue to monitor this issue very closely" but has no plans to update the directive at present, a representative said.  


The first directive guaranteeing employees a minimum level of protection in the event of a company's insolvency was adopted in 1980. That was updated in 2008 and in 2009 there was a drastic increase in the number of employees needing help, mainly due to the economic crisis, the Commission said.

REF. : 20110408STO17338