Securing of employees' claims in case of bankruptcy of the employer

Employees of the employer against whom bankruptcy proceedings have been initiated may realize a part of unpaid claims under certain conditions

Agency for Securing Employees' claims (AORT) pays the employee a part of the unpaid salaries and other incomes earned in the exclusivity period and becomes the bankruptcy creditor for the paid amount instead of the employee.
 
In the event of initiated bankruptcy proceedings against the employer, the employee is entitled to the payment of:
  • unpaid salaries or salary compensations, up to the amount of a minimum salary for each month of the protected period;
  • unpaid salary compensation for sick leave in the exclusivity period which, according to the regulations on health insurance, the employer was obliged to pay from their own funds, up to the amount of a minimum salary for each month spent on sick leave;
  • unpaid benefits for unused annual leave to which the employee has acquired the right up to the initiation of bankruptcy proceedings under the conditions established by law, up to the amount of minimum salary, as equivalent to the monthly salary referred to in item 1 of this list;
  • severance pay under the conditions determined by law, in the amount of half of the severance pay determined in the bankruptcy proceedings, and up to the amount of one half of the severance pay prescribed by law;
  • legally awarded damages due to an injury at work or an occupational disease, up to the amount of one third of the legally awarded damages. 

Income is completely exempt from enforcement proceedings.
 
Employee:
  • natural person in accordance with the general labour regulations;
  • employed with the employer at the time of the initiation of bankruptcy proceedings;
  • a person whose employment with the employer was terminated within six months before the initiation of bankruptcy proceedings.

Exclusivity period:
  • the period for which the protection and insurance of workers' rights is carried out in the event of the initiation of bankruptcy proceedings against the employer;
  • the period of the last three months before the initiation of bankruptcy proceedings against the employer;
  • i.e., the last three months before the termination of employment if it was terminated within six months before the initiation of bankruptcy proceedings.


Proceedings for securing claims


The procedure is initiated at the request of the employee by submitting a special form (RPS-01 form).
 
When the bankruptcy proceedings are initiated and conducted:
  • 30 days from the expiration of the eighth day from the day of publication of the decision on identified and disputed claims on the web page e-Notice board of courts.

When bankruptcy is initiated and concluded:
  • 30 days from the expiration of the eighth day from the day of publication of the decision on the initiation and conclusion of bankruptcy proceedings on the web page e-Notice board of courts.

When the employee is referred to court proceedings for the purpose of establishing the disputed claim:
  • 30 days from the day of receipt of the final judgement determining the amount of the claim and the payment order. 
The deadline for submission of requests is mandatory.
 
The employee shall submit the accompanying documents:
  • employment contract or written confirmation of the concluded employment contract, i.e., other proof of employment relationship;
  • decision or other proof of termination of employment, if the employment has been terminated;
  • IBAN of the current account of the employee and the name and seat of the bank;
  • IBAN of the special account referred to in Article 212 of the Enforcement Act and the name and seat of the bank;
  • copy of the PK form;
  • data on the pension pillar schemes (MIO I or MIO I and MIO II). 

The request is submitted:
  • in person;
  • by mail;
  • online via the application on the AORT/e-Citizens website;
  • to the regional office of the Croatian Employment Service according to the place of the employer's seat or its registered business unit. 


AORT's decision and payment of claims


AORT's decision:
  • 15 days from the submission of a proper application. 

Deadline for appeal:
  • 15 days from the receipt of the decision / postpones the execution of the decision. 
A statement waiving the right to appeal expedites the payment.
 
The payment shall be made to the designated account of the bankruptcy debtor for the acceptance of payment of secured claims of employees within 15 days from the enforceability of the decision.
The bankruptcy administrator shall make the calculation and payment to the employee, as well as the calculation and payment of the related taxes and contributions within eight days.

Exceptionally, in case of deletion of the employer from the register of legal entities as a consequence of the concluded bankruptcy proceedings, AORT will make the payment within 15 days from the date of enforceability of the decision, directly to the employee's account, along with the calculation and payment of taxes and surtaxes and compulsory insurance contributions calculated from the tax base and on the tax base.

Claims paid by AORT are transferred to AORT on the day of payment. AORT assumes all procedural rights of the bankruptcy creditor for the funds paid, by amount and purpose.

Exemption from exercising the right
  • member of the management board of the company;
  • board member;
  • executive director;
  • cooperative manager
regardless of the time they performed those functions.