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.
Articles 3.1 and 4.1 of law 25(I)/2001; Article 2 of law 13(I)/2014; Article 3 of the Protection of the Rights of Employees in the Event of Insolvency of the Employer Law of 2001 to 2023, as amended by law 37(I)/2023
The law regulating the protection of employees' rights in case of employer's insolvency aims to protect workers in the event of bankruptcies. In particular, all outstanding payments by employers to employees are safeguarded thanks to a special fund established for this particular purpose. The fund is financed exclusively by employers' contributions: 16.6% of employers' contributions paid to the redundancy fund (correspond to approximately 0.2% of total gross salaries) are reserved for the insolvency fund.
Over a period of 78 weeks prior the date the employer's insolvency commenced, the employee is entitled to the following payments from the fund:
Excluded from eligibility for payments from the fund are employees that:
From 2009 to 2022, the insolvency fund has received 660 applications. Almost half of those applications (310) were from 2013 and 2014, and the only other years with a considerable amount of applications were 2019 (70) and 2020 (40). 2021 was the first and only year with zero applications, and there were only 3 applications made in 2022.
Only 84 cases were approved between 2009 and 2022, and the last year with approved applications was 2018. It is noteworthy that only approved 2 applications were approved by the fund in 2018, and none since then. From 2008 to 2019, the fund has made payments to applicants amounting to only €318,342, and since no applications were approved since then, no more payments were made. Until 2019 the administrative costs of the fund amounted to €569,938. The annual surplus of the insolvency fund, from 2008 to 2019, averaged to nearly €14 million annually. In 2015, the fund increased its reserves to approximately €179 million. The fund's reserves at the end of 2017 amounted to €205 million and at the end of 2019 to €237 million.
Employer organisations are from time to time raising the demand to reduce their contribution to the insolvency fund, as the fund has built up huge reserves. Trade unions, nevertheless, consider the legislation as insufficient. They suggest the revision of the current legislation with the view to ease procedures, so as to facilitate more dismissal cases to qualify for consideration by the insolvency fund.
In 2020, the Ministry of Labour, Welfare and Social Insurance has prepared a draft law amending the basic law. The draft law is aiming at extending coverage to employees who had been dismissed prior to the declaration of insolvency. However, at the time of dismissal, the bankruptcy procedure on the basis of the bankruptcy law or part V of the companies law had already begun and the employer has been eventually made insolvent. Following the presentation of the draft law in the House of Representatives, trade unions have requested further changes to extend the scope of the law. The Pancyprian Federation of Labour (PEO), for example, requested a written intervention to extend the definition of insolvency to cover following cases:
With the amendment of the Law in 2023 the demands of the trade unions were satisfied, at least partially. The Law now provides that the following are entitled to a payment from the Fund : a) an employee whose employment is terminated because his employer has become insolvent, b) an employee whose employment is terminated by the initiation of liquidation proceedings of the employer pursuant to the provisions of Part V and Part VI of the Companies Law or pursuant to of the provisions of the Bankruptcy Law, if the employer ultimately becomes insolvent, and c) an employee whose employment is terminated following the appointment of a receiver or administrator pursuant to the provisions of Part VI of the Companies Act, provided that the receiver or administrator certifies that the employer has ceased to carry on any work and there are no sufficient assets to pay his wages.
Eurofound (2015), Cyprus: Wage guarantee in case of insolvency, Restructuring legislation database, Dublin, https://apps.eurofound.europa.eu/legislationdb/wage-guarantee-in-case-of-insolvency/cyprus
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.
