Legal regime for the protection of employees' claims in the case of employer's bankruptcy in the Republic of Serbia

Abstract

When bankruptcy proceedings are initiated by an employer, that often leads to uncertainty and problems for its employees. One of the biggest problems in this kind of situation is the protection of employees' claims arising from the employment relationship. Employees have the right to the payment of their claims arising from the employment relationship, such as unpaid wages, transportation allowances, meal allowances, holiday bonuses and the alike. However, in the case of the employer's bankruptcy, these claims are at risk, and there is a possibility that employees may not be able to fully collect them, which compromises the fundamental principles of labor legislation. For this reason, the state intervenes to protect monetary claims arising from employment. The primary mechanism involves granting privileged creditor status with priority claims, along with mechanisms to protect these claims through a special guarantee institution. If there was no such intervention by the state, the realization of those rights would be difficult. However, even with state intervention, the realization of these rights is not guaranteed. In this regard, this paper will examine models for protecting employees' claims in the event of bankruptcy, while identifying practical problems in this field.