Insolvency Law Rank of Vacation Compensation Claims in Employment under the Strong Preliminary Insolvency Administrator
Background for Classification in Insolvency Proceedings
The insolvency law classification of vacation compensation claims raises complex issues, especially when employed during the period of preliminary insolvency administration. This is particularly true when the so-called “strong” preliminary insolvency administrator takes over the company’s management with consent reservation and continues to utilize the work performance. A recent judgment by the Federal Labor Court on November 30, 2021 (Case No. 6 AZR 94/19) has further elaborated on the key criteria for the insolvency law qualification of these claims.
Facts and Procedural Context
The decision was based on the situation of an employee whose employment relationship was terminated by dismissal before the opening of insolvency proceedings, and who subsequently had a vacation compensation claim. During the opening proceedings, a strong preliminary insolvency administrator with consent reservation held the power of disposal and utilized the work performance. The central question concerned the qualification of the vacation compensation claim within the meaning of the Insolvency Code, specifically its ranking as an insolvency claim (§ 38 InsO) or as a mass liability (§ 55 Para. 2 InsO).
Legal Classification of the Vacation Compensation Claim
Decisive Time for the Claim’s Arising
For the insolvency law evaluation, it depends on when the vacation compensation claim arises. The Federal Labor Court has once again clarified that the vacation compensation becomes due upon the termination of the employment relationship, provided that remaining vacation can no longer be granted. Consequently, the ranking of the claim largely depends on whether the employment relationship ends before or after the opening of insolvency proceedings.
Significance of the Strong Preliminary Insolvency Administrator
In the current case, the strong preliminary insolvency administrator took control of the debtor’s assets during the opening proceedings, but did not yet acquire the mass thereby. Nor were mass liabilities within the meaning of § 55 InsO yet established. Until the proceedings are opened, the debtor’s assets do not become part of the insolvency estate, therefore liabilities are still generally subject to the insolvency quota.
Outcome of the Decision
The Federal Labor Court ruled that the vacation compensation claim, which arises upon the termination of the employment relationship during the period of preliminary insolvency administration, is generally to be qualified as an insolvency claim according to § 38 InsO. Only if the compensation claim arises after the opening of proceedings does a mass liability according to § 55 Para. 1 InsO exist. The mere utilization of work performance by the strong preliminary insolvency administrator during the opening proceedings does not change this ranking.
Consequences for Practice
The decision emphasizes that the application of insolvency law ranking follows strictly according to the time of the claim’s arising. Even a continuation of operations under a strong preliminary insolvency administrator does not automatically lead to the establishment of mass liabilities for matured vacation claims. Thus, the tension between creditor protection and employee interests continues to be shaped by the timeframes of the Insolvency Code.
In specific cases where further legal questions arise concerning employment law claims during insolvency proceedings, a thorough examination and clarification by skilled legal advisors in the field of insolvency law is recommended. Further information and a well-foundedLegal Advice in Insolvency Lawcan be found athttps://www.mtrlegal.com/offices/deutschland/insolvenzrecht/.
