Wages Come First: General Confederation of Trade Unions Pushes for Stronger Worker Protections in Cross-Border Bankruptcy
In case of a company’s bankruptcy within the Commonwealth of Independent States (CIS), employees should be given priority in receiving earned wages, according to the General Confederation of Trade Unions (GCTU). This applies to both foreign workers and employees of transnational companies. The GCTU proposes clarifying the procedure for foreign workers to access wage recovery in the CIS model law On Cross-Border Insolvency (Bankruptcy), which is being drafted by a working group of the Interparliamentary Assembly of CIS Member States. The international trade union association aims to secure privileged rights for workers to receive payments, based on the civil codes of CIS countries and ILO Convention No. 95.
“A bankrupt company must first pay its employees their earned wages, even if they are foreign specialists. This is fair, as employees are often the least protected in such situations and usually have no alternative source of income. It is essential to ensure prompt payment for their labor,” said Viktor Pinsky, State Duma deputy and General Secretary of the GCTU.
The Confederation is involved in drafting the model law, which will help unify the legal regulation of cross-border bankruptcy procedures across CIS countries. Previously, at the GCTU initiative, a clause guaranteeing the protection of foreign worker-creditors’ rights in accordance with international and national law was included in Article IV of the model law. Additionally, the GCTU proposes granting trade unions the right to collective representation and protection of workers during the cross-border insolvency of their employers. This is necessary to ensure that employees of transnational companies and migrant workers have priority in receiving wage arrears over all other obligations of the bankrupt entity.
During the elaboration of the model law, the working group specified key provisions, including the determination of the debtor’s center of main interests, secondary proceedings procedures, and the legal status of small creditors. The law will not apply to certain organizations, such as credit, insurance, and strategic enterprises. The next meeting of the working group is scheduled for February 26 in St. Petersburg, where experts will discuss mechanisms for international legal cooperation and coordination of proceedings across multiple jurisdictions.
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