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.
Section 169 and 305 in Act No. 182/2006 Coll., on bankruptcy and settlement (Insolvency act); Section 2–5, 10, 11 in Act No. 118/2000 Coll., on the protection of employees in the event of insolvency of their employer
In case of employer insolvency, employees' claims have priority in the liquidation process (judicial liquidation and reorganisation). All private law employment relationships are eligible, including part-time workers, fixed-term workers, domestic servants, but excluding some public officials.
In the following cases, employees are excluded from protection:
In court decisions, wages have the same rank as the claims of the liquidation administrator (‘super priority’) (Bankruptcy law).
Managers must not obtain any property from assets of their employer (Bankruptcy law).
The application for claims has to be submitted for approval by the employee to the public employment service. The employee has to apply within 5 months and 15 calendar days following the date on which the labour office published its to official board information regarding the employer who has filed an insolvency petition or had been impounded property. The application has to be submitted to the public employment service which approves or rejects it. The instruction of the Deputy Minister for Employment of the MoLSA came in force in January 2019. It pinpoits the due date of the wage entitlements for the purposes of Act No. 118/2000 Coll.
All claims (wage, replacement alimony, payment for holidays, termination of a job, payment for time off to visit a doctor, etc.) that arose in the period of three months before and three months after the month when the insolvency was announced are covered. Wage claims are covered for a maximum period of three months, for a monthly amount of one and a half average wage in the Czech Republic as it is determined by law.
The guarantee is financed by the state; there are no employers’ contributions.
Data on the number of employers, processed applications (satisfied workers) and paid funds followed the economic is available through the Ministry of Labour and Social Affairs. as it can be seen in the table below. For data until 2020, refer to the publication "Analysis of the development of employment and unemployment".
Data on expenditure on employment policy in the Czech Republic can be found here.
Eurofound (2015), Czechia: Wage guarantee in case of insolvency, Restructuring legislation database, Dublin, https://apps.eurofound.europa.eu/legislationdb/wage-guarantee-in-case-of-insolvency/czechia
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