In the event of an employer’s insolvency employees who have worked for at least 26 continuous weeks before the insolvency date are entitled to payment from both:
- The Redundancy Fund.
- The Insolvency Fund.
The Insolvency Fund was created under the Employers’ Insolvency Law of 2001, Law 25(I)/2001 in order to protect the rights of employees. An employee whose employment was terminated due to insolvency of his employer and who had worked for 26 continuous weeks prior to that insolvency is entitled to a payment out of the Insolvency Fund of 13 weeks’ unpaid wages accrued within 78 weeks prior to the insolvency. An employee is also entitled to pro rata payment of 13th and 14th salary (where applicable) for the last 13 weeks of his employment.
Payment made by the Redundancy Fund is the same as in the event of a redundancy
State guarantee fund
The Insolvency Fund has been established to safeguard employees’ rights on their employer’s insolvency (see above).