The effectiveness of the domestic claims protection system for employees in the event of employer bankruptcy

Abstract

In this paper, the author analyses the ways in which the claims of employees in bankruptcy proceedings against their employer are protected. The first part of the paper discusses various modalities of protection that are applied alone or in combination with other means, all in order to provide a better protection framework for employees in bankruptcy. The central part of the paper is dedicated to the issue of the effectiveness of the Serbian protection system, which is measured by the number of settled claims of this type for creditors in bankruptcy proceedings, i.e. the number of upheld claims before the Solidarity Fund. In order to achieve the desired goal, it is necessary to place the protection of employees' claims in a broader context, which implies the harmony of the institutes of labour and bankruptcy law. As this is not the case in Serbia, the author points out a number of problems that arise in practice as a result, which were identified through interviews with employees of the Solidarity Fund and an analysis of reports on the work of this institution published since its establishment. At the very end, a comparative review shows that labour law mechanisms for the protection of employees are limited, and that, in that sense, expanding them to employers who have not initiated formal bankruptcy proceedings could be considered (with adequate adjustments). It is a unique theoretical proposal that deserves attention since the paper starts from the hypothesis that the system of protection of employees in terms of unsettled claims would be much more effective if they were more familiar with the work of the Solidarity Fund and if the way in which the Fund's work is organized was different.