Facultative Guarantees to Employees in the Event of Insolvency of the Employer
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Abstract
Co-ordination of the imperative and the facultative methods is characteristic for legal regulation of labour relations. Since the legal labour relations are becoming more liberal, the prevalent principle, is considered the principle ‘in favorem’ which means that the working conditions guaranteed by law are minimal and collective or individual subjects can agree on conditions which are more favourable to employees. In other words, the facultative (decentralised) method is gradually replacing the imperative (centralised) method of legal regulation of labour relations. This principle is accomplished when the economic situation of the enterprise is stable. However, insolvency of the employer causes a problem, as the employees of bankrupt enterprises are deprived of the rights guaranteed by the collective agreement of the enterprises. The legal regulation of labour relations should ensure that in the case of insolvency of employer, the business and working places as well as guarantees to employees should be retained.
Analysis of the application of imperative and facultative methods of legal regulations and their relation in labour law has been conducted in the course of research with the aim to study the peculiarities of determination and application of facultative guarantees to employees in the case of insolvency of the enterprise. The author analysed the following tasks in order to achieve this aim: 1) determination of facultative guarantees to employees; 2) the validity of the collective agreement in the case of insolvency of the employer; 3) the assurance of guarantees offered to employees in collective agreements in the case of insolvency of the employer.
The author draws the following conclusions:
– The establishment and application of guarantees for employees, after the employer becomes insolvent, is specific. The approximation of Imperative and Facultative methods is typical of labour regulation both, establishing and applying guarantees for employees related to insolvency of employer;
– The start of bankruptcy proceedings cannot be identified with the liquidation of company, therefore all determined guarantees must be applied until the decision to liquidate the company is made;
– After the employer becomes insolvent, the application of some guarantees for employees may be limited in order to maintain the company and its employees. In our opinion, there would be expedient to determine legally the limitation only for the application of some items of collective agreement, but not for the whole of it, giving the opportunity to contracting parties to review the application of relevant provisions of the collective agreement during the time of the insolvency of company. In this case the priority should be given to the Facultative method.
– The negotiations at the level of various collective agreements are not promoted enough. The absence of appropriate Imperative provisions prevents from this, for example, the employees' turnout in the administration of company, as well as the status of employer and the authorization of employees' organizations to negotiate at the various levels of collective agreements are not regulated by the laws, etc.
Analysis of the application of imperative and facultative methods of legal regulations and their relation in labour law has been conducted in the course of research with the aim to study the peculiarities of determination and application of facultative guarantees to employees in the case of insolvency of the enterprise. The author analysed the following tasks in order to achieve this aim: 1) determination of facultative guarantees to employees; 2) the validity of the collective agreement in the case of insolvency of the employer; 3) the assurance of guarantees offered to employees in collective agreements in the case of insolvency of the employer.
The author draws the following conclusions:
– The establishment and application of guarantees for employees, after the employer becomes insolvent, is specific. The approximation of Imperative and Facultative methods is typical of labour regulation both, establishing and applying guarantees for employees related to insolvency of employer;
– The start of bankruptcy proceedings cannot be identified with the liquidation of company, therefore all determined guarantees must be applied until the decision to liquidate the company is made;
– After the employer becomes insolvent, the application of some guarantees for employees may be limited in order to maintain the company and its employees. In our opinion, there would be expedient to determine legally the limitation only for the application of some items of collective agreement, but not for the whole of it, giving the opportunity to contracting parties to review the application of relevant provisions of the collective agreement during the time of the insolvency of company. In this case the priority should be given to the Facultative method.
– The negotiations at the level of various collective agreements are not promoted enough. The absence of appropriate Imperative provisions prevents from this, for example, the employees' turnout in the administration of company, as well as the status of employer and the authorization of employees' organizations to negotiate at the various levels of collective agreements are not regulated by the laws, etc.
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Authors retain copyright of their work, with first publication rights granted to the Association for Learning Technology.
Please see Copyright and Licence Agreement for further details.