Bankruptcy of the employer as a consequence of his insolvency

The article considers some issues related to the bankruptcy of the employer, which arises as a result of his insolvency, in particular, the issue of employee protection. It is noted that bankruptcy affects both employers and employees differently. Thus, the employer may be liable both to third-party creditors (financial institutions, suppliers, landlords) and to be in debt to the employees, if the salary or its part has not been paid, as well as the remuneration due to the employees. At the same time, it can have negative consequences for the workers, since their livelihood and their families can be completely dependent on such salary or remuneration. It was concluded that the issues of employee protection in case of employer’s insolvency have always been important and needed to be resolved, since employees are the least protected subjects of labor relations, who need guarantees of protection of their rights from both the employer and the state. Since the bankruptcy of the employer negatively affects both the social and financial situation of the employees, it leads to the termination of the employment contract concluded with them both for an indefinite period and a fixed-term employment contract before the expiration of its validity period. It was concluded that the adoption by the Verkhovna Rada of Ukraine of new legislative acts on the protection of the rights of employees in case of bankruptcy of the enterprise is a positive step, especially today, when the country is in a state of war against the Russian aggressor. It is noted that the implementation of the proposed norms will contribute to the approximation of Ukrainian legislation to European labor standards and will make it economically unprofitable for the employer to withhold salary, will create conditions for reducing the amount of existing debt for its payment, will increase the level of economic protection of the employee in case of late payment of work, and will also ensure the creation of a mechanism wage compensation in case of insolvency of the employer.