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

The Committee notes the Government’s first report on the application of the Convention and wishes to draw its attention to the following points.

Article 3, paragraph 2, of the Convention. Acceptance of Part III. The Committee notes the Government’s indication that the acceptance of obligations of Part III of the Convention is currently under consideration by the Government and the social partners. The Government explains that since 45 per cent of all wage arrears concern bankrupt enterprises, it has instructed the competent ministries and the social partners to examine the possibility of setting up a guarantee fund for the payment of wages in the event of the employer’s insolvency. The Government adds that the Ministry of Labour is in the process of drawing up new draft legislation on the protection of workers’ financial claims in the event of the insolvency of their employer. The Committee accordingly requests the Government to keep the Office informed of all future developments concerning the extension of acceptance of the Convention to Part III.

Article 6. Protected claims. The Committee notes that section 31(1)(1)(b) of the Law on Restoring the Solvency of the Debtor or Declaring Him Bankrupt (hereinafter Bankruptcy Law) (Act No. 2343-XII of 1992), as last amended in 2009, provides that the following workers’ claims enjoy first-rank privilege in bankruptcy proceedings: (i) claims in respect of wages owed for the three months of work prior to the initiation of bankruptcy proceedings, or in the case of workers made redundant before the initiation of proceedings, the three months prior to the termination of the labour relationship; (ii) financial compensation for all unused days of annual leave and additional leave for workers with children accrued in the two years prior to the initiation of bankruptcy proceedings or to the termination of the employment relationship; (iii) other amounts due in respect of paid absence from work relating to a period of three months prior to the initiation of bankruptcy proceedings or to the termination of the employment relationship; and (iv) severance pay. The Committee notes, however, that section 31(1) of the Law to introduce changes to the Bankruptcy Law (Act No. 784-XIV of 30 June 1999), as last amended in 2001, provides for another order of privileged claims, which does not appear to include workers’ employment-related claims except for severance pay. The Committee would appreciate if the Government would provide clarifications on this point.

Part IV of the report form. Application in practice. The Committee notes the Government’s indications on the improvement of the wage arrears situation as a result of the implementation of the Convention. The Government states that following the ratification of the Convention and the initiation of insolvency proceedings, wage arrears fell by 22 per cent, most bankrupt enterprises being concentrated in industry and agriculture. The Committee would be grateful if the Government would continue providing general information on the practical application of the Convention, including for instance the number of workers covered by the measures giving effect to the Convention, statistics on the number of bankruptcy proceedings and the amounts of wage debts recovered through such proceedings, etc.