Judgment of the Court (Fifth Chamber), 18 April 2013

European Union legislation

3 Since Directive 80/987, in its original version, was substantially amended several times, in particular by Directive 2002/74, it was codified, in the interests of clarity and functionality, by Directive 2008/94/EC of the European Parliament and of the Council of 22 October 2008 on the protection of employees in the event of the insolvency of their employer (OJ 2008 L 283, p. 36).

4 According to recital 4 in the preamble to Directive 2008/94, which uses virtually identical wording to that of recital 5 to Directive 2002/74:

‘In order to ensure equitable protection for the employees concerned, the state of insolvency should be defined in the light of the legislative trends in the Member States and that concept should also include insolvency proceedings other than liquidation. In this context, Member States should, in order to determine the liability of the guarantee institution, be able to lay down that where an insolvency situation results in several insolvency proceedings, the situation is to be treated as a single insolvency procedure.’

5 Article 2(1) of Directive 2008/94 is worded as follows:

‘For the purposes of this Directive, an employer shall be deemed to be in a state of insolvency where a request has been made for the opening of collective proceedings based on insolvency of the employer, as provided for under the laws, regulations and administrative provisions of a Member State, and involving the partial or total divestment of the employer’s assets and the appointment of a liquidator or a person performing a similar task, and the authority which is competent pursuant to the said provisions has:

1. either decided to open the proceedings, or

2. established that the employer’s undertaking or business has been definitively closed down and that the available assets are insufficient to warrant the opening of the proceedings.’

6 Article 3 of that directive provides as follows:

‘Member States shall take the measures necessary to ensure that guarantee institutions guarantee, subject to Article 4, payment of employees’ outstanding claims resulting from contracts of employment or employment relationships, including, where provided for by national law, severance pay on termination of employment relationships.

The claims taken over by the guarantee institution shall be the outstanding pay claims relating to a period prior to and/or, as applicable, after a given date determined by the Member States.’

7 According to Article 4(1) and (2) of Directive 2008/94:

‘1.

Member States shall have the option to limit the liability of the guarantee institutions referred to in Article 3.

2.

If Member States exercise the option referred to in paragraph 1, they shall specify the length of the period for which outstanding claims are to be met by the guarantee institution. However, this may not be shorter than a period covering the remuneration of the last three months of the employment relationship prior to and/or after the date referred to in the second paragraph of Article 3.

Member States may include this minimum period of three months in a reference period with a duration of not less than six months.

Member States having a reference period of not less than 18 months may limit the period for which outstanding claims are met by the guarantee institution to eight weeks. In this case, those periods which are most favourable to the employee shall be used for the calculation of the minimum period.’

8 The first paragraph of Article 11 of Directive 2008/94 provides as follows:

‘This Directive shall not affect the option of Member States to apply or introduce laws, regulations or administrative provisions which are more favourable to employees.’

Bulgarian legislation

9 Article 6 of the Law on the protection of employees’ claims in the event of the insolvency of their employer (Zakon za garantiranite vzemania na rabotnitsite i sluzhitelite pri nesastoyatelnost na rabotodatelia, the ‘Law on the protection of employees’ claims’), in the version that entered into force on 5 March 2011, provides as follows:

‘The right of employees … to guaranteed claims shall arise on the date of the entry of the judicial decision in the register of companies declaring that:

1. the insolvency proceedings are opened;

2. the insolvency proceedings are opened and cessation of payments is simultaneously declared;

3. the insolvency proceedings are opened, the termination of the undertaking’s activity is ordered, the debtor is declared to be insolvent and the proceedings are discontinued because the assets do not suffice to cover the costs thereof.’

10 Under Article 22(1)(1) of the Law on the protection of employees’ claims’, the claims guaranteed are of an amount equivalent to the last three salary amounts which would have been payable but remain unpaid and an allowance in lieu of annual leave for the last six calendar months preceding the month during which the judicial decision referred to in Article 6 was entered in the register, but cannot exceed the maximum amount of the claim guaranteed in such a case where the employee has been employed by the same employer for at least three months.

11 Under Article 25 of the Law on the protection of employees’ claims, such protection is granted on the basis of a declaration submitted by the employee within 30 days of the date of the entry in the register of companies of the decision referred to in Article 6 thereof.

12 Article 607(1) of the Law on Commerce (Targovski zakon, ‘TZ’), in the version that entered into force on 3 May 2011, provides that the aim of the insolvency proceedings is to ensure that creditors receive reasonable satisfaction and that it is possible for the debtor’s undertaking to be restored to viability as a going concern.

13 Article 630(1) of the TZ, which governs the content of the decision to open the insolvency proceedings, provides that the court is to: (i) declare the undertaking of insolvent and determine the date as of which it is deemed to be insolvent; (ii) open the insolvency proceedings; (iii) appoint a provisional liquidator; (iv); shall permit the provision of security through attachment, seizure or other preservation measures; and (v) arrange for the first meeting of creditors.

14 According to Article 710 of the TZ, the court is to order suspension of payments by the debtor unless a plan pursuant to Article 696 of the TZ has been proposed or the proposed plan has been accepted or confirmed within the period designated by law and in the cases defined in Article 630(2), Article 632(1) and Article 709(1) of the TZ.

15 In the ‘Decision ordering the suspension of payments’, the content of which is governed by Article 711 of the TZ, the court is to: (i) order suspension of payments by the debtor the termination of the undertaking’s activity; (ii) order the general seizure and attachment of the debtor’s assets; (iii) revoke the powers of the debtor’s executives if the debtor is a legal person; (iv) withdraw the debtor’s right to administer and dispose of assets forming part of the insolvency estate; (v) order the realisation of assets forming part of the insolvency estate and the distribution of the assets realised.

The first and second questions

27 By its first and second questions, which it is appropriate to examine together, the referring court asks, in essence, whether Directive 2008/94 must be interpreted as requiring Member States to provide guarantees for employees’ claims at every stage of the insolvency proceedings of their employer and, in particular, whether it precludes Member States from providing a guarantee only for employees’ claims arising before the entry of the decision to open insolvency proceedings in the register of companies, even though that decision does not order the termination of the employer’s activities.

28 In order to answer those questions, it is necessary to ascertain, first, whether collective proceedings based on ‘insolvency’ within the meaning of Article 2(1) of Directive 2008/94 can be triggered by a decision to open insolvency proceedings such as that provided for by Bulgarian law, and, second, whether it is possible on the basis of Articles 3 and 4 of that directive to establish the date of the entry of the decision to open insolvency proceedings in the register of companies as a reference date before which employees’ claims are guaranteed.

29 It is apparent from the order for reference that the insolvency proceedings comprises two successive decisions, the first opening the insolvency proceedings and the second ordering the termination of activities. Bulgarian law provides that the reference period within which a claim is guaranteed is the period before the entry of the decision to open the insolvency proceedings in the register of companies, which means that only employees’ claims arising before that date are covered by the guarantee, while those arising afterwards are not.

30 First, it should be noted that Article 2(1) of Directive 2008/94 brings the case within the scope of that directive and, in so doing, makes it subject to the conditions laid down in that directive concerning the triggering of the guarantee (see, to that effect, Joined Cases C-94/95 and C-95/95 Bonifaci and Others and Berto and Others [1997] ECR I-3969, paragraph 36, and Case C-373/95 Maso and Others [1997] ECR I-4051, paragraph 46).

31 In that regard, it is clear from the actual wording of Article 2(1) of Directive 2008/94 that, in order for an employer to be deemed to be in a state of insolvency, it is necessary for a request to have been made for the opening of collective proceedings based on the insolvency of the employer, as provided for under the laws, regulations and administrative provisions of a Member State, involving the partial or total divestment of the employer’s assets and the appointment of a liquidator or a person performing a similar task, and for the competent authority under those provisions to have either decided to open the proceedings or established that the employer’s undertaking or business has been definitively closed down and that the available assets are insufficient to warrant the opening of such proceedings.

32 Accordingly, it is apparent that, in order for the guarantee provided by Directive 2008/94 to apply, two conditions must be satisfied. First, there must have been a request for the opening of proceedings based on the insolvency of the employer and, second, there must have been a decision either to open those proceedings or, where the available assets are insufficient to warrant the opening of such proceedings, it must have been established that the undertaking has been definitively closed down.

33 Once such a decision to open proceedings has been made, Article 2(1) of Directive 2008/94 does not require the collective proceedings at issue necessarily to lead to the termination of the employer’s activity.

34 That conclusion is supported by recital 4 in the preamble to Directive 2008/94, which provides that the state of insolvency should be defined in the light of the legislative trends in the Member States and that the definition of the ‘state of insolvency’ should also extend to insolvency proceedings other than liquidation.

35 As regards Bulgarian law, it should be observed that the wording of Article 630(1) of the TZ expressly states that, in the decision to open insolvency proceedings, the court is required to make a declaration of insolvency and determine the date as of which the undertaking is deemed to be insolvent. That provision uses the same term to denote insolvency as that which appears in the Bulgarian version of Article 2(1) of Directive 2008/94.

36 In addition, as the European Commission observes, in accordance with Article 2(a) of Council Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings (OJ 2000 L 160, p. 1), as amended by Council Regulation No 1791/2006 of 20 November 2006 (OJ 2006 L 363, p. 1) Annex A to that regulation specifies that Bulgarian insolvency proceedings under Article 607 et seq. constitute ‘insolvency proceedings’ within the meaning of Article 1(1) thereof. The latter provision describes the ‘collective insolvency proceedings’ in the same manner as Article 2(1) of Directive 2008/94, in that such proceedings are required to entail the partial or total divestment of the debtor and the appointment of a liquidator.

37 Article 2(1) of Directive 2008/94 does not therefore require an order for the termination of the employer’s activity in order for the guarantee provided by Directive 2008/94 to apply.

38 Second, it is necessary to ascertain whether it is possible on the basis of Articles 3 and 4 of that directive to establish the date of the entry of the decision to open insolvency proceedings in the register of companies as a reference date after which employees’ claims are no longer guaranteed.

39 In that regard, the second paragraph of Article 3 of Directive 2008/94 allows Member States to determine the date prior to which and/or, as applicable, after which falls the period during which the outstanding pay claims are to be taken over by the guarantee institution.

40 As regards the determination of that date by the Member States, Article 3(2) of Directive 80/987, in its original version before amendment by Directive 2002/74, allowed the Member States to choose only between three reference dates laid down in the directive.

41 The amendments introduced by Directive 2002/74 and maintained by Directive 2008/94 removed the reference to those three dates and the second paragraph of Article 3 of Directive 2008/94 accordingly allowed the Member States the freedom to determine an appropriate date.

42 Lastly, it should be observed that the first paragraph of Article 11 of Directive 2008/94 does not affect the option of Member States to apply or introduce laws, regulations or administrative provisions which are more favourable to employees and therefore to extend the guarantee period appropriately, if they see fit (see, to that effect, Case C-160/01 Mau [2003] ECR I-4791, paragraph 32).

43 In the light of the foregoing, the answer to the first and second questions is that Directive 2008/94 must be interpreted as not requiring the Member States to provide guarantees for employees’ claims at every stage of the insolvency proceedings of their employer. In particular, it does not preclude Member States from providing a guarantee only for employees’ claims arising before the entry of the decision to open insolvency proceedings in the register of companies, even though that decision does not order the termination of the employer’s activities.

The third and fourth questions

44 In view of the answer given to the first and second questions, there is no need to answer the third and fourth questions.