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.
L.126-1 of the Labour Code - modified by law 12 April 2019.
The national Employment Fund (Fonds pour l'Emploi) guarantees the payment to the employees of any financial claims arising from their contract of employment should the employer become insolvent.
The entitlement is not subject to a minimum period of employment and this provision also covers apprentices and part-time and fixed-term contracts. The Employment Fund guarantees payment of any remuneration or other compensation and indemnities due to the employee which arise from the final six months of their employment prior to the court’s declaration of the employer’s bankruptcy. This includes any payments due as a consequence of the termination of employment. The guarantee applies to the final six months of employment of the employees concerned, irrespective of the date on which court proceedings begin or whether the six-month reference period is situated immediately before the decision of the court. The maximum amount that can be claimed is six times the monthly adult minimum wage for an unskilled employee (in September 2023 equivalent to a total of €15,425,58).
The insolvency procedure has been redefined in a new 2023 legal framework (Loi du 7 août 2023 relative à la préservation des entreprises et portant modernisation du droit de la faillite).
Eurofound (2015), Luxembourg: Wage guarantee in case of insolvency, Restructuring legislation database, Dublin, https://apps.eurofound.europa.eu/legislationdb/wage-guarantee-in-case-of-insolvency/luxembourg
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