Wednesday, 9 March 2011

EU Commission report on Insolvency and Employees

The European Commission (pictured) has published a new document on insolvency and employees. The snappily titled: "Report from the Commission to the European Parliament and the Council on the implementation and application of certain provisions of Directive 2008/94/EC on the protection of employees in the event of the insolvency of their employer" is essential reading for those interested in the effects of insolvency on employees, one of our most important s.172 CA06 stakeholders. 

In relation to the Directive the report notes that, "The Directive aims at protecting employees in the event of the insolvency of their employer in particular in order to guarantee payment of their outstanding claims. To this end Member States have to establish a body which guarantees the payment of these claims." Perhaps the employees of the insolvent company could staff the new body? Moving away from the facetious, one could ask if this is really a good use of finite resources? Whilst there is no doubt that employees are Cantlie like non-consensual creditors for their past wage claims who should have their rights respected, and that the continuance (or adoption - s.19 and s.44 IA86) of their employment is in some instances essential for rescue, the scope, application and most importantly, cost implications of this Directive, will have to be closely examined. 

Picture Credit: http://www.civitas.org.uk/eufacts/graphics/Berlaymontbuilding.jpg

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