European Restructuring Monitor (ERM)
Eurofound's ERM database on restructuring-related legal regulations provides information on regulations in the Member States of the European Union and Norway which are explicitly or implicitly linked to anticipating and managing change.
Bankruptcy Act: Article 69, 120; Act on ensuring workers' claims: Article 8-15, 39
The law guarantees the payment of employees’ claims for earned, yet unpaid, gross salaries and other claims arising from the employment contract for three months prior to the initiation of a bankruptcy process, regardless of the type of employment contracts. The same applies for the three-month period prior to the termination of a contract, if it was terminated within the three months preceding the opening of the bankruptcy proceedings. Therefore, employees’ claims arising from their employment prior to the opening of the bankruptcy proceedings have priority over all other creditors and claims.
According to article 9 of the Act on ensuring workers' claims, in cases of standing bankruptcy proceedings, the amounts guaranteed to employees are:
According to article 14 of the Act on ensuring workers' claims, in cases of blocked accounts for the employer, the amounts guaranteed to employees:
For part-time employees, the highest monthly amount of entitlements shall be calculated proportionally to the agreed working time in relation to the minimum full-time salary.
Such claims are paid to employees by the agency responsible for ensuring workers’ claims in the event of an employer’s bankruptcy (Agencija za osiguranje radnickih potrazivanja u slucaju stecaja poslodavca). Payments come from the Fund for ensuring workers’ claims in the event of an employer’s bankruptcy (Fond za osiguranje radnickih potrazivanja u slucaju stecaja poslodavca), established by the agency and financed from the state budget for covering bankruptcy costs if the funds available from the bankruptcy are insufficient. Claims can be paid to employees provided that they have reported them to the agency or to the competent office of the public employment service within 30 days from the competent court's decision on the bankruptcy or starting from the eighth day after the announcement of the bankruptcy process in the Official Gazette.
According to article 39 of the Act on ensuring workers' claims, the agency decides on claims within 15 days of submission. Employees can file complaints on the decision, which finally determines the claim's validity after the ministry of labour and pension system makes its evaluations within 30 days of the complaints' submission. Within 15 days from the decision, the agency must pay out claims directly to employees if the company has been closed down. Otherwise, payments are made out to the company's account designated for this purpose, whose transactions are monitored by the bankruptcy manager. The latter must then transfer the received funds to the employees within eight days.
The law prescribes that employees' claims above the guaranteed three salaries included in insured employees' claims, but up to three minimum gross monthly salaries in total, are included in the bankruptcy file of the employer. It concerns the claims of all employees, except those who were in top management positions.
The agency for ensuring workers’ claims in the event of an employer’s bankruptcy (Agencija za osiguranje radnickih potrazivanja u slucaju stecaja poslodavca) is financed from the state budget. It becomes a bankruptcy creditor of the company for employees' claims. Information on payments made to employees is available on the agency's web page.
According to the data as at April 2020, the Agency paid for 61 workers' claims HRK 849,900 (€ 113,300) and 44 workers a part of unpaid salaries of HRK 152,000 (€ 20,300).
The Agency responsible for the fund in its annual report for 2019 states that there were 2,589 paid demands for a total amount of HRK 58.4 million (€ 7.8 million), while the total received from bankruptcy procedures was HRK 12.3 million (€ 1.6 million).
According to the Yearly Report by the Agency for 2018, there were 1,775 demands in cases of standing bankruptcy proceedings in 2018, while outlays were HRK 33 million (€4.42 million). In 2018, the total number of employers from bankrupt companies was 91. The agency also covers employees' claims in case of blocked accounts for the employer. For this purpose, in 2018 the agency received 150 demands, of which 124 cases were decided in favor of employees. In this case, expenditures were HRK 47.7 million (€6.40 million).
According to the Yearly Report by the Agency for 2022, there were 507 and 1,000 demands in cases of standing bankruptcy proceedings in 2021 and 2022, while outlays were HRK 5,7 million (€0.76 million) in 2021 and HRK 17,9 (€2.38 million) in 2022. The Agency also covers employees' claims in case of blocked accounts for the employer. For this purpose, in 2021 and 2022 the agency received 39 demands for 722 workers and 59 demands for 1,281 workers. ln this case, expenditures were HRK 7.6 million (€1.01 million) in 2021 and HRK 16.08 million (€2.03 million).
Subject to approval of the court, the bankruptcy manager can conclude new contracts with employees in order to complete work in process and reduce possible damage. Salaries and other monetary compensations for employees are determined by the bankruptcy manager, based on the approval of the court and in line with the law and collective agreements. Salaries and other employer obligations are covered by the bankruptcy estate. Regional and local governments can award additional one-off payments as an aid to redundant employees, if the bankruptcy concerns the well-being of a substantial part of their citizens. However, this is not prescribed by the law.
Eurofound (2015), Croatia: Wage guarantee in case of insolvency, Restructuring legislation database, Dublin, https://apps.eurofound.europa.eu/legislationdb/wage-guarantee-in-case-of-insolvency/croatia
Between the end of 2022 and the first half of 2023, almost 300,000 employees working for ‘big tech’ companies were laid off across the world, making headlines for months in global media. This development has been a shock, considering the high numbers of jobs in well-known tech corporations with a reputation for offering good working conditions and well-paid positions.
The retail banking sector is fertile ground for studying the impacts of digitalisation on work and employment. Financial services are increasingly provided online, without the intermediary of customer-facing institutions. Many banks in the sector have been undergoing serial restructuring since the global financial crisis, and it is one of the few service sectors with stagnant or declining employment.
Since 2011, the Restructuring support instruments database of the EU PolicyWatch has been collecting information on measures that assist companies and workers to anticipate and manage restructuring. This article looks at measures in the database aimed at supporting employees and employers during the COVID-19 pandemic (2020–2022).
Eurofound’s European Restructuring Monitor database reveals the impact of the energy crisis on employment in the EU. Following Russia’s invasion of Ukraine in February 2022, energy prices have hit record highs. The European Commission imposed sanctions and limitations on the import of oil and gas from Russia, which has reacted by reneging on supply commitments to many Member States.
