Employment protections on insolvency

Government support has helped many European businesses survive during the economic downturn caused by the COVID-19 pandemic. This has protected many jobs which might otherwise have been lost. However, as we begin to slowly emerge from the worst of the pandemic and our economies begin to recover, Government support is expected to decrease. It may then be that the frequency of business restructurings or insolvencies and, consequently, employee redundancies will increase.

This briefing has been prepared jointly with our European Best Friend firms. The briefing addresses six questions relating to the employment protections available to employees of insolvent companies in Finland, France, Germany, Italy, Portugal, Spain, Sweden, the Netherlands and the United Kingdom.

The questions being addressed are:

• Do Employment protections vary according to the type of insolvency faced by the employer?
• What effect does the employer's insolvency have on the employment contract?
• What amounts can be claimed by employees from a state guarantee institution if the employer is insolvent (and what conditions apply to such a claim)?
• What special rules for employees apply to the sale of an insolvent business?
• Do any special rules apply to redundancies in an insolvency context?
• Have any emergency protections been enacted in the context of the COVID-19 pandemic?