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SUSPENSION OF EMPLOYMENT CONTRACTS IN BANKRUPTCY PROCEEDINGS: KEY POINTS AND PROCEDURES

Por Diego Ricardo Molinari Chiarappa / 10 de diciembre de 2024

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📎 Suspension of Employment Contracts in Bankruptcy Proceedings: Key Points and Procedures
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👉 Suspension of Employment Contracts in Bankruptcy Proceedings
💬 Bankruptcy proceedings are a legal process initiated when a company is unable to meet its payment obligations. This process has significant implications for employment contracts, particularly regarding their suspension. In this article, we explore in detail how the suspension of employment contracts is managed during bankruptcy proceedings, based on current legislation and judicial practice. ✍️
Legal Framework
The Bankruptcy Law, primarily Royal Legislative Decree 1/2020, regulates bankruptcy proceedings in Spain. This law establishes that, once bankruptcy is declared, employment contracts remain in force unless specific measures such as suspension, substantial modification, or termination of those contracts are adopted.
Suspension Procedure
The suspension of employment contracts during bankruptcy proceedings can be requested by the bankrupt company, the bankruptcy administration, or workers´ representatives. This request must be justified and accompanied by the necessary documentation proving the economic, technical, organizational, or production-related (ETOP) reasons for the measure.
The bankruptcy judge is responsible for authorizing the suspension of employment contracts. To do so, a consultation period with workers´ representatives and the bankruptcy administration must be held. This period cannot exceed 30 calendar days for companies with 50 or more workers, or 15 days for companies with fewer than 50 workers.
Effects of Suspension
During the suspension period, workers are not required to provide their services, and the company is not obliged to pay the corresponding wages. However, workers are entitled to unemployment benefits, provided they meet the requirements established by labor legislation.
It is important to note that the suspension of an employment contract does not imply its termination. Once the causes that led to the suspension are resolved, workers must return to their jobs under the same conditions they had before the bankruptcy.
Workers´ Rights
Workers affected by the suspension of their contracts have several rights that must be respected, including:
1. Right to Information: Workers must be clearly and accurately informed about the causes and effects of the suspension.
2. Right to Representation: Workers have the right to be represented by their union delegates or legal representatives during the consultation period.
3. Right to Unemployment Benefits: During the suspension, workers can apply for unemployment benefits, provided they meet legal requirements.
Conclusion
The suspension of employment contracts in the context of bankruptcy proceedings is a measure aimed at balancing the company´s viability with the protection of workers´ rights. It is a complex process requiring the involvement of various stakeholders and judicial oversight to ensure all legal guarantees are upheld.
For companies, it is essential to have proper legal advice to manage such situations efficiently and in compliance with the law. For workers, understanding their rights and available remedies is crucial to protecting their interests during bankruptcy proceedings.
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⚖️ Welcome to the Online Commercial Process offered by MCHM Lawyers. Through our online platform, we provide you the convenience of completing the entire process from the comfort of your home, without the need to visit our office or the courts (except for mandatory procedures). Below, we will guide you through each step of the process:
Accessing Your Personal Account: Once you access our website https://www.mchmabogados.es/inicio-sesion-mchmabogados-almeria [Commercial], you can create a personal account or log in if you already have an existing account. From your personal account, you will have access to all the tools necessary to complete the commercial process.
Uploading Documents: From your personal account, you can upload all the necessary documents to initiate the commercial process (including case-relevant documents).
Receiving Notifications and Requests: Once you have uploaded your documents, you will receive notifications and requests through your personal account on our online platform. These notifications will include information about your case status, any actions required from you, and any important communications related to your commercial process.
Process Tracking: From your personal account, you can monitor your case progress in real time. This includes information about hearings, court rulings, and any other relevant updates.
Communication with Your Lawyer: Through our online platform, you can communicate directly with your assigned lawyer. You can make inquiries, ask questions, and receive personalized legal advice at any time during the process.
Receiving the Judgment: Once the process is complete, you will receive the final judgment through your personal account on our online platform. This judgment will include any decisions made by the court regarding your commercial case.
In summary, our Online Commercial Process offers you the convenience and flexibility of completing the entire procedure from the comfort of your home, without the need to visit our office or the courts (except for mandatory procedures). With access to your personal account on our online platform, you can upload documents, receive notifications, communicate with your lawyer, and monitor your case progress in real time. At MCHM Lawyers, we are committed to providing you with the best possible service throughout the commercial process.
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