Hello lawyer, I want to ask if an employee can file a petition to commence bankruptcy procedures when the company is more than 06 months late in paying wages. My company has owed wages for more than 6 months due to economic crisis and we have tried all ways but cannot claim our wages.
I am looking forward to getting an answer from you. Thank you.
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Companies being dissolved and employees losing their jobs are sad situations that happened during the COVID-19 pandemic. Many businesses try in many different ways to stay alive, but it is still not feasible. Debt and late payment of wages to employees are still common and directly affect the lives of employees. The question is whether employees are entitled to commence bankruptcy proceedings because the Company owes wages or not. Let’s learn about this with PL & Partners.
1. Laws on bankruptcy:
Pursuant to Article 4.2 of the Law on Bankruptcy 2014, bankruptcy means a status where an enterprise or cooperative becomes insolvent and is subject to a people’s court decision declaring bankruptcy.
Pursuant to Article 5.2 of the Law on Bankruptcy 2014, person having the right and obligation to file a petition to commence bankruptcy proceedings includes:
|“2. Employees, grassroots trade unions and immediately higher grassroots trade union in the place where a grassroots trade union has not been established, have the right to file a petition to commence bankruptcy proceedings upon the expiry of 03 months from the date when the obligation to pay wages and other debts to the employees was due and not performed by the enterprise or cooperative”.|
Thus, according to the above provisions, employees of the company have the right to file a petition to commence bankruptcy proceedings if the time limit of 03 months from the date of payment of wages and other debts is due but still not paid by the enterprise.
2. Settle the rights of employees when the enterprise goes bankrupt:
Article 48.2 of the Labor Code 2019 stipulates: in case an enterprise goes bankrupt, the salary, severance allowance, social insurance, health insurance, unemployment insurance and other benefits of the employees under the collective labor agreement and the signed labor contract shall have priority for payment.
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