Bankruptcy often creeps up insidiously and is unnoticed by employees. It often only becomes apparent when the monthly salaries suddenly aren't paid. This situation is usually very stressful for those affected. We show you what you should bear in mind in this situation and what you must do to get through it as safely as possible.
Your employer can't pay your salary, but the bankruptcy office isn't involved yet.
Ask your employer for your salary in good time by giving them a reasonable period in which to make the payment, i.e. between three and seven days. Send your request by registered mail so that you can produce this as evidence if necessary. You can find more information and a template for asking for your salary in our legal tip: Claiming outstanding wages | template (myright.ch)
The payment of your future salary is also at risk. What are your options?
You're entitled to terminate your employment with no notice if your employer does not guarantee payment of your salary within a reasonable period.
To enable you to take advantage of this right, you must have asked your employer for a timely (three to seven days) guarantee in advance. We recommend that you link this request to the threat of instant termination. This way, your employer will know that you will terminate your employment immediately if it does not provide the guarantee.
You can find more information and a template for asking for your salary in our legal tip: Claiming outstanding wages | template (myright.ch)
Your employer can't pay your salary and the bankruptcy office is already involved.
If the bankruptcy office is already involved, employees will normally receive a letter informing them of the next steps and the arrangements to be put in place. If you'd like to know whether bankruptcy proceedings have already been instigated against your employer, you can go to the home page of the Swiss Commercial Gazette (www.sogc.ch).
Will my employment be automatically terminated if bankruptcy proceedings have been initiated?
Current employment arrangements are not automatically terminated when bankruptcy proceedings are initiated. The bankruptcy office decides and informs employees whether the bankruptcy assets will take over the working relationship or not, i.e. whether the employment relationship will continue or be terminated. Employment relationships are not normally continued and are deemed to be terminated with immediate effect.
The employment relationship has been formally terminated or operating activities have been suspended. I'm unemployed with immediate effect. What do I have to do?
Don't lose any time and get in touch immediately with the Regional Employment Office (REO) in your area as well as a public unemployment insurance fund which you can choose yourself. In many cantons, you can register online. You'll also find more useful tips and information on REO and unemployment insurance fund home pages.
Bankruptcy proceedings have been initiated.
If bankruptcy proceedings have been initiated, employees must enter their full claim arising from the employment relationship (bankruptcy claim). Note that this should not only include the salary for work you have already performed, but also the salary that would have been owed to you under notice of termination.
If you have already registered with an unemployment insurance fund, you will be immediately advanced benefits from that fund of between 70 to 80 percent of your previous salary. As mentioned above, it's very important for you to register as quickly as possible with the REO and unemployment insurance fund.
How can I report my salary claims to the bankruptcy office and what should I bear in mind?
You must submit your claim using special forms. Ask your applicable bankruptcy office, as it will usually send them to you. If you don't receive any forms, you can download them from the relevant bankruptcy office's home page. You'll normally find more information about bankruptcy there too. Make sure that you enclose all relevant documentation when you submit your claim. If you're in doubt or are unclear about anything, it's worth contacting the office so that you can submit your claim in full.
IMPORTANT: You must submit your claim quickly within a legally prescribed period. This period or notice to creditors is published in the Swiss Commercial Gazette (SCG). We recommend that you submit your claim within 30 days of the start of bankruptcy proceedings. Late submissions will be accepted by the bankruptcy office, but you must pay for the cost of late submission yourself.
What happens about overtime when a company goes bankrupt?
Overtime is paid through insolvency compensation and has to be reported to the bankruptcy office. Insolvency compensation is normally paid for claims for up to four months at the most. If you've worked overtime in the last four months before the start of bankruptcy proceedings, you'll receive appropriate compensation. You must report all overtime to the bankruptcy office together with the other claims at the same time. If there's enough money available from the bankruptcy assets, it's possible that you'll still be paid your overtime from the bankruptcy proceedings.
When and how do I have to apply for insolvency compensation (IC)?
As well as registering with the REO, unemployment insurance fund and submitting your claim to the bankruptcy office, you can also apply for insolvency compensation under certain circumstances. Insolvency compensation covers any outstanding salaries for work performed for up to four months. Compensation is paid for salary claims, vacation and holiday compensation, shift allowances and overtime, provided there is a legal entitlement to them. Persons not entitled to insolvency compensation are those in positions comparable to that of an employer, business owners, those financially involved in the business, spouses working in the business and similar persons.
Use the official form for the application. You'll find it here.
Enclose all relevant documentation with the application for insolvency compensation, including a copy of the bankruptcy submission (the form contains a list of documents to be submitted). If you're in doubt or are unclear about anything, it's worth contacting the bankruptcy office so that your submission can be made in full.
Submit this application for insolvency compensation to the public cantonal unemployment fund in your employer's location. For instance, if you live in Bern and work in Zurich, you must submit the application for insolvency to the public unemployment fund in the canton of Zurich.
IMPORTANT: The statutory period within which you must make your submission is 60 days since the insolvency event. This means 60 days since the start of bankruptcy proceedings was published in the Swiss Commercial Gazette. Entitlement to insolvency compensation lapses after this period.
If you bear these points in mind, you have taken the most important measures to come through the situation as financially unscathed as possible; you can then concentrate on looking for a new job.