Has your employer gone bankrupt? See our lawyer’s instructions

Topics

• Labour law
• Legal assistance
• Unemployment

An employer’s bankruptcy often comes as a surprise to employees. It is clear that the situation raises many questions. What do you, as an employee, need to know if your employer announces bankruptcy? See our lawyer’s instructions.

A company can be declared bankrupt by a district court decision. In this case, a trustee is appointed for the bankruptcy estate, who also assumes decision-making authority. This means that the company’s management no longer makes decisions.

As an employee, your employment relationship does not automatically end when bankruptcy proceedings begin. The bankruptcy estate decides whether the company will continue to operate and employ people or whether employees will be laid off.

The bankruptcy estate may continue operations and keep you employed, for example, for the purpose of selling the company. However, it is more common for the bankruptcy estate to terminate employees’ employment contracts very quickly after the declaration of bankruptcy.

In bankruptcy situations, employees can be dismissed with 14 days’ notice. This notice period supersedes the notice period agreed in your employment contract.

Claim your wages from Pay Security, but be quick

In bankruptcy situations, it is common for employees not to have received their wages. Often, wages for the notice period and holiday compensation payable at the end of the employment relationship may also remain unpaid.

In such a situation, it is important to check with the trustee whether they will submit a wage security application on your behalf. If the trustee is unable to submit the application, you must submit the pay security application yourself.

The pay security application is submitted to the KEHA Center and must be submitted within three months of the pay becoming due. The application deadline is strict; if you do not submit the application by the deadline, the pay cannot be paid as pay security. So don’t wait, act quickly!

The pay security application form can be found on the KEHA Center website or the suomi.fi website. As a private individual, you should use the Työntekijän palkkaturvahakemus.

Fill in the application carefully and attach the necessary documents, such as your employment contract, any work certificates, and your pay slips.

Pay particular attention to the section of the pay security application where you enter the wages you are claiming. Enter the exact period for which the wages are accrued (the period for which the wage claim is made), the basis for calculation, and the amount. Enter all amounts as gross amounts. Also remember to check the box on the application form asking whether you are claiming interest on arrears.

The trustee needs information about unpaid wages

You must also report any unpaid wages to the trustee. You should ask the trustee of the bankruptcy estate whether they are aware of any unpaid wages and whether these have been entered in the list of claims. If not, you must report them yourself. Report your unpaid wages to the trustee in the form of a supervision letter and send the supervision letter to the trustee no later than the supervision date. It is advisable to ask the trustee directly for more information and advice on this process.

As a member of YTK Worklife, you can also turn to Lakikaveri for legal advice in this situation.