Direct Request (CEACR) - adopted 2012, published 102nd ILC session (2013)

Protection of Workers' Claims (Employer's Insolvency) Convention, 1992 (No. 173) - Ukraine (Ratification: 2006)

Article 3(2) of the Convention. Acceptance of Part III. Protection of claims by a guarantee institution. The Committee notes the Government’s indication that it is actively considering the acceptance of the obligations of Part III of the Convention referring to protection of workers’ claims by a guarantee institution, and to this end, it has prepared draft legislation on the protection of the financial claims of workers in the event of the employer’s bankruptcy which provides for the establishment of a Labour Payment Guarantee Fund.

The Government also indicates that while the establishment of the fund has not yet been made possible due to the current deficit situation, a working group has been set up to prepare proposals for the creation of such a wage guarantee fund and also international experience is being used, mainly through conferences, to formulate mechanisms for the protection of financial claims of workers in the event of the employer’s bankruptcy. The Committee welcomes these developments and requests the Government to keep the Office informed of any progress made in this matter.

Article 6. Claims protected by privilege. The Committee notes with interest that by Act No. 4212-XVII of 22 December 2011, section 31(1) of the Bankruptcy Law of 1992 has been amended and now lists workers’ claims first among first-rank privileged debts in the distribution order, whereas claims for the payment of taxes and other compulsory contributions are granted third-rank privilege. It also notes that the scope of the privilege covers workers’ claims for unpaid wages relating to three months prior to the initiation of bankruptcy proceedings, holiday pay for unused annual leave accrued in two working years prior to the initiation of bankruptcy proceedings, monies in connection with other types of paid absence, and severance pay, which is fully consistent with the requirements of this Article of the Convention.

Part IV of the report form. Application in practice. The Committee notes that according to the information provided by the Government, the total amount of wage arrears at enterprises undergoing insolvency or bankruptcy proceedings as of July 2012 stood at 451.2 million Ukranian Hryvnia (UAH) (approximately US$55.5 million), 53.7 per cent of these debts being in the industrial sector. The Committee requests the Government to continue to provide up-to-date information concerning the practical application of the Convention, especially the evolution of the total amount of wage debts of bankrupt enterprises following the entry into force of the latest amendment of the bankruptcy legislation.