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 84, 90, 91 of Law 22/2003; Article 19 of Royal Decree 20/2012; Art 33 Statute of Workers’ Rights (Royal Decree Law 2/2015); Art 243, Art 514 Art 541 Royal Legislative Decree 1/2020.
There is a special insolvency state fund (Fogasa) addressed to workers whose employer has been declared insolvent or bankrupt, or who had to stop paying wages for certain economic reasons. Law 22/2003 defines insolvency as the situation in which a debtor company cannot regularly meet its required debtor obligations.
The insolvency law from 2003 establishes the workers’ privilege as creditors in cases where the company becomes insolvent. The claims of the workers of the company (wages for the 30 days before the opening of the collective procedures; wages for work after the start of the collective procedures; economic compensation related to termination of the employment contract etc.) have the priority, ranking ahead of all other claims.
The wage guarantee fund only becomes active if there are not enough assets available.
Anyone providing services for an employer and receiving wage for this, including part-time and fixed-term workers, irrespective of the duration of employment is eligible by the wage guarantee fund.
Domestic servants employed by families, artists, partners of workers' cooperatives are exempted.
The guarantee covers wages, bonuses and fringe benefits as well as financial employee participation that arises up to one year before the insolvency.
In terms of wages pending to be paid, the fund pays an amount equivalent to the double of the daily National Minimum Wage per each unpaid working day. Since the Royal Decree 20/2012 entered into force, on the 15 July 2012, a maximum of 120 days can be covered with the fund. Before, it was 150 days.
In terms of severance pay, there is a maximum payment of 12 months per year worked. However, the wage taken into consideration in order to calculate the severance pay cannot be higher than the double daily minimum wage (the current national monthly minimum wage can be accessed here ). FOGASA covers only severance pay acknowledged by a court sentence or deriving from a resolution of the Labour Authority, and when dismissal is applied because the company is considered insolvent or goes bankrupt.
The guarantee is administered by the Guarantee Institution Fogasa of the labour ministry and financed by employer contributions.
For wage guarantee fund statistics, visit the Ministry of Labour and Social Economy.
Eurofound (2015), Spain: Wage guarantee in case of insolvency, Restructuring legislation database, Dublin, https://apps.eurofound.europa.eu/legislationdb/wage-guarantee-in-case-of-insolvency/spain
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