Sveriges Ingenjörer
Arbetsrätt

Bankruptcy

In the event of a bankruptcy, a bankruptcy trustee takes over the operation of the company's business to liquidate or sell the company and manage the assets of the bankruptcy estate. The trustee's task is to try to convert the company's assets into money and then distribute them among the company's creditors.

The bankruptcy trustee makes decisions about the employees' employment and decides on the wage guarantee. Here you will find important information about what happens in the event of a bankruptcy and how the wage guarantee works.

Questions and answers about bankruptcy

No. You are not automatically dismissed due to the decision of bankruptcy. However, the bankruptcy trustee usually dismisses the employees due to redundancy, unless the employee has previously resigned or been dismissed.

The notice period is calculated according to the Employment Protection Act (LAS). It depends on how long you have been employed. The notice periods in LAS apply even if you have a different notice period according to your employment agreement or according to your collective bargaining agreement.

During the first month after the bankruptcy decision, you are entitled to a wage guarantee regardless of whether you perform work for the bankruptcy estate or not. After that period, the possibility of a wage guarantee depends on whether you have been ordered to continue working or if you are exempt from work.

If you are dismissed and exempt from work, you are entitled to a wage guarantee even after the first month following the bankruptcy decision, but only for the notice period covered by Section 11 of LAS. If you have a longer notice period than what is specified in Section 11 of LAS, such a claim is never covered by the wage guarantee. The salary for the remaining part of the notice period usually constitutes an unsecured claim in the bankruptcy. For such a notice period where the wage guarantee does not apply, it is possible to apply for unemployment benefits, provided that you are registered as a job seeker and thus available to the labor market.

If you perform work for the bankruptcy estate after the first month, the bankruptcy estate must pay your notice salary. You are obliged to work during the agreed notice period, provided that you receive salary and other agreed compensations from the bankruptcy trustee. These claims constitute so-called mass claims that must be paid before the bankruptcy estate can pay other bankruptcy claims. Those who do not receive agreed compensations have no obligation to work and can choose to stop working while waiting for the due benefits to be paid or to resign from their employment and instead register as a job seeker with the employment service and apply for unemployment benefits.

Yes. The bankruptcy trustee will inform you when the work ceases. You have a duty to work if you receive compensation through the wage guarantee. Even if you have been on garden leave, the trustee may ask you to later return to work. If you say no, it may affect your right to the wage guarantee.

When the bankruptcy trustee informs you that you no longer need to work, you should immediately register as a job seeker with the Swedish Public Employment Service. If you are not registered, you may lose your right to the wage guarantee. If you are unsure of what applies, ask the bankruptcy trustee.

Yes – if the trustee grants you the state wage guarantee. The state wage guarantee means that the state steps in and pays the employees' wage and vacation claims. The money is paid out by the Swedish Tax Agency to your regular salary account.

The wage guarantee covers salary and other compensation due to employment that was earned no earlier than three months before the bankruptcy application was submitted to the district court. Your termination salary during the notice period according to the Employment Protection Act (LAS) is also covered by the wage guarantee. The wage guarantee also includes vacation pay. This applies provided that you do not reach the maximum amount for the wage guarantee, see below.

The salary guarantee is limited to a maximum amount of four price base amounts.

More information at Swedish Tax Agency's (Skatteverket) web site

It is not possible to say exactly. It can take up to several weeks before The Swedish Tax Agency finally pays out the salary guarantee.

The part of your claim that for various reasons is not covered by the wage guarantee is rejected and becomes a claim in the bankruptcy that you potentially have the right to if there is money in the bankruptcy estate. The wage guarantee decision from the bankruptcy trustee will indicate if and why any part of your claim is rejected. As an employee, you must monitor your claim in the bankruptcy, and you will be notified of this by the district court.

The notice period starts running the day you end your parental leave and return to work. Then the payment of your termination pay through the wage guarantee begins. You can also interrupt the parental leave and start the notice period immediately. Contact the bankruptcy trustee in such a case, so you know exactly what applies.

Yes. The amounts stated in the wage guarantee decision are gross salary, i.e., salary before tax. The Swedish Tax Agency, which pays out the wage guarantee, makes deductions for tax before payment.

Your employer is obliged to issue an employer certificate even if the company has gone bankrupt.

We answer your general questions about what applies in the event of bankruptcy and wage guarantee. If it is a specific question that concerns you, you should contact the bankruptcy trustee. You can contact to us if you believe your wage guarantee decision is incorrect. If, after an assessment, we believe that the decision is incorrect, we can help you request a review of the bankruptcy trustee's decision and ultimately we can take legal action against the state.  

Other than support from our ombudsmen, Engineers of Sweden also offer you support in finding a new job through:  

  • Income insurance  
  • CV review/LinkedIn review/Cowrite; all three services aim to help with writing/updating your CV/LinkedIn.  
  • “Ask the recruiter”; You will get help from engineer-savvy recruiters to scan the market and find the right job.  
  • Interview training is suitable for those who may not have applied for a job in a while and feel uncertain regarding the interview situation.  
  • For those who want help with the next step in their career, career coaching can be good to try.  
  • Our mentoring service “Mentorsök” if you want to get in touch with someone who, for example, works in an industry you are curious about.  
  • Only the income insurance requires a qualification period. Other benefits can be used by members from day 1.  
  • If the company you work for have a collective agreement you are also entitled to support in the transition from TRR Trygghetsrådet. In order to qualify for support from TRR special rules apply.

If you are unemployed when the wage guarantee ends, you can apply for compensation from the unemployment insurance fund (a-kassa) and the income insurance provided by Engineers of Sweden, which is administered by Folksam.

You must be a member of the unemployment insurance fund and the union to be eligible for compensation. The unemployment insurance fund makes decisions regarding unemployment benefits, and Folksam makes decisions regarding compensation from the income insurance.

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