If an employer goes into insolvency, it has a significant impact on all employees whose lives are greatly affected by the fact that they may not have been paid. It is precisely to maximise the protection of employees’ rights that a claim against the employer (pay, severance pay, etc.) has a high priority for satisfaction. What can an employee facing the insolvency of their employer do to get paid for their work?
No one wants to find themselves in a situation where they have to deal with the fact that their employer hasn’t paid them, or even has nothing to pay them out of. In the context of insolvency proceedings, employees are a special category of creditors. What claims may they have against their employer? In addition to the traditional wage/salary claims, these include severance pay, compensation for untaken leave and other employment claims.
Under insolvency law, employee claims are among the claims with priority status. What does this mean? As you can read in the article on priority claims, these claims are satisfied first, or have a higher priority than the claims of other creditors, which may include banks, suppliers, business partners and others.
As with other types of claims, the Insolvency Act sets out specific rules on how employees must submit their claim if they want to be paid.Employees’ rights include the possibility to submit their claim directly to the insolvency administrator and, as we have mentioned, they are entitled to have their claims settled before other claims.
They didn't pay you for the work you did?
A claim against an employer is one of the common legal transactions we handle in our office. Remember, it is not your fault that money did not arrive in your account on time if your employer is insolvent. On the contrary, you have every right to file for your wages and demand payment. Our attorney will go over your situation with you and help you complete all the necessary paperwork.
Theclaim application is the basic document by which you, as an employee, notify your claim to the insolvency court and the insolvency administrator. It is essential that you file the application correctly and within the time limit. Our attorney will help you with this. The claim application must contain basic information about the creditor (employee), the debtor (employer) and the amount of the claim. A key part of the application is specifying the type of claim – i.e. whether you are claiming wages, compensation, severance pay or something else from your employer.
You must also attach documents that prove the origin and amount of your claim. You can prove this with, for example, an employment contract, a wage agreement, a pay slip, bank statements proving non-payment of wages, and other relevant documents. If you are also claiming interest for late payment, you must state this in the application form and also add the amount of interest to the claim.
The claim is filed with the insolvency court that decides on the employer’s insolvency. You must submit the application in writing, either in person, by post or by mail. We recommend that you file as soon as possible after the employer’s bankruptcy is declared so that you can be sure that your claim as an employee will be dealt with by the insolvency administrator as quickly as possible.
Tip: Read also about bad debt, which is much more difficult to recover for certain reasons.
The deadline for filing is one of the most important aspects to watch out for as an employee with a claim against your employer. The deadline for filing is set by the insolvency court in its decision on the employer’s insolvency. In other words, once the court has announced that your employer is insolvent, it will also set a deadline for filing your claims. The standard deadline is 30 days after the publication of the insolvency decision in the insolvency register. If you miss this deadline, the insolvency administrator may not take your claim into account in the insolvency proceedings at all.
You must deliver the claim to the insolvency administrator in charge of your employer’s estate. The trustee will then review the application and assess whether your claim is valid. If he or she accepts the claim, he or she will classify it as a priority claim to be satisfied from the debtor’s estate.
Employee claims have a specific position in insolvency proceedings. Unlike ordinary claims, which are satisfied only after the distribution of the debtor’s assets, employees are entitled to have their claims satisfied already during the insolvency proceedings. Employees whose wages and other entitlements have not been paid can apply for payment from the guarantee fund, which ensures payment of outstanding wage claims in the event that the employer is unable to meet its obligations.
Tip: Common mistakes include inaccuracies in the amount of the claim, insufficient evidence, incorrect information about the debtor and, above all, failure to file within the deadline.
Filing a claim in insolvency proceedings is a necessary step for employees who have outstanding claims from their employer. Although employees have priority in insolvency proceedings, the success of their claim depends on the correct and timely filing of the application. It is important to be aware of all the legal requirements and be prepared to communicate with the insolvency practitioner. Making a claim in insolvency proceedings can be a complex process, but with careful preparation and following the set rules, employees can achieve satisfaction of their claims.
Our team of experienced attorneys will help you solve any legal issue. Within 24 hours we’ll evaluate your situation and suggest a step-by-step solution, including all costs. The price for this proposal is only CZK 690, and this is refunded to you when you order service from us.
Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
In person and online. Just choose the appropriate service or opt for an independent consultation when you are unsure.
