EMCC European Monitoring Centre on Change

Czechia: Wage guarantee in case of insolvency

Czechia
Phase: Management
Type:
Wage guarantee in case of insolvency
Sist endret: 30 August, 2021
Virkelig navn:

Zákon č. 118/2000 Sb., o ochraně zaměstnanců při platební neschopnosti zaměstnavatele ve znění pozdějších předpisů; Zákon č. 182/2006 Sb., o úpadku a způsobech jeho řešení (insolvenční zákon ve znění pozdějších předpisů)

Engelsk navn:

Act No. 118/2000 Coll., on the protection of employees in the event of insolvency of their employer; Act No. 182/2006 Coll., on bankruptcy and settlement (Insolvency act)

Artikkel

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

Beskrivelse

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:

  • employees who are members of the employer’s statutory body and shareholders with half and higher participation;
  • employees who work for the employer as temporary agency workers (TAW) and whose wages are covered by a TAW insurance in case of insolvency.

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, 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.

Kommentarer

The number of employers, processed applications (satisfied workers) and paid funds followed the economic cycle in the country, as it can be seen in the table below (Source: Úřad práce ČR - The Labour Office of the Czech Republic, https://portal.mpsv.cz/sz/politikazamest/trh_prace).

 

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Number of employers - submitted applications

382

386

750

847

840

961

802

693

437

n.d.

n.d.

n.d.

n.d.

Submitted applications

5,983

3,973

16,281

9,998

7,100

9,101

8,031

6,094

4,569

3,826

2,177

n.d.

n.d.

Processed applications

6,888

5,055

19,451

11,028

8,253

7,694

8,202

6,830

5,610

4,402

3,290

3,793

4,431

Paid funds (thousands CZK)

196,033

150,330

844,033

497,837

389,142

451,799

333,208

391,856

229,500

250,339

167,343

257,154

277,672

Paid funds (thousands EUR)

7,128

5,467

30,692

18,103

14,151

16,429

12,117

14,513

8,500

9,300

6,436

9,891

10,680

 

Cost covered by
  • National government
Involved actors other than national government
  • Public employment service
  • Other
Involvement others
Local court
Thresholds
No, applicable in all circumstances
Kilder
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