Protection of Workers' Claims (Employer's Insolvency) Convention, 1992 (No. 173) - Latvia (Ratification: 2002)

Replies received to the issues raised in a direct request which do not give rise to further comments (CEACR) - adopted 2019, published 109th ILC session (2021)

The Committee notes the information provided by the Government, which answers the points raised in its previous direct request and has no further matters to raise in this regard.

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

Article 13 of the Convention. Limits to guaranteed wage claims. The Committee notes the Government’s indication that due to the worsening economic situation in the country and the anticipated increase of insolvent enterprises, it was found necessary to amend the Law on the Protection of Employees in Case of Insolvency of the Employer and to put a ceiling to the amount payable by the Guarantee Fund for claims submitted from July 2009 to December 2011. The Government also indicates that the maximum amount which may be covered by the Fund is now linked to the minimum monthly wage specified by the Government. The Committee requests the Government to provide together with its next report up-to-date information, including statistics if available, on the impact the economic crisis has had on the operation of the wage guarantee institution, particularly as regards its financial sustainability in view of the increasing number of bankruptcies and insolvencies, and any additional measures taken in this respect such as the possible readjustment of the level of employers’ contribution.

Part IV of the report form. Application in practice. The Committee notes the statistical information provided by the Government concerning the expenditure of the Guarantee Fund and the number of employees whose claims were satisfied in the period 2008–11. The Committee would appreciate it if the Government would continue to supply information on the practical application of the Convention.

Direct Request (CEACR) - adopted 2007, published 97th ILC session (2008)

The Committee notes the information provided by the Government, in particular the adoption of new Cabinet Regulations No. 830 of 5 October 2004 on the procedure, submission, consideration and satisfaction of claims of employees against insolvent employers; Cabinet Regulations No. 328 of 10 May 2005 on State Agency “Insolvency Administration” Regulations; Cabinet Regulations No. 465 of 6 June 2006 on procedure of submission, consideration and satisfaction of the claims of employees against insolvent employers in case of cross-border insolvency; Cabinet Regulations No. 721 of 29 August 2006 on the amount of the state entrepreneurial risk fee and the share of the fee to be transferred to the employees’ claims Guarantee Fund in 2007.

Article 10 of the Convention. Prevention of abuse. The Committee notes that in reply to its previous request on this point, the Government refers to new draft legislation providing for a specific procedure to protect the public interest and prevent fraudulent misappropriation of the resources of the Guarantee Fund. Under the draft legislation, the insolvency administration will be entitled to suspend allocation of resources until any suspicious case is resolved according to the criminal legal procedure. The Committee requests the Government to transmit a copy of the new legislation as soon as it is adopted.

Article 13. Limits of the wage guarantee. The Committee notes that as from 1 January 2005, there is no longer any monetary limit with relation to the maximum amount of guaranteed payment, following the adoption of the Act of 18 December 2003 amending the Act on protection of employees in case of the employer’s insolvency, although the time limits (reference periods) continue to apply on claims in respect of unpaid wages, annual leave and other types of paid absence.

Part IV of the report form. The Committee notes the statistical information provided by the Government concerning the number of applications received by the Guarantee Fund in 2005–06 and the average amount paid per employee. It also notes the information on the resources of the Guarantee Fund and the utilization of funds in the same period. The Committee would appreciate if the Government would continue to supply detailed information on the operation, financing and management of the Guarantee Fund.

Direct Request (CEACR) - adopted 2005, published 95th ILC session (2006)

The Committee notes with interest the Government’s first report on the application of the Convention.

Articles 9 and 11(1) of the Convention. The Committee notes the Government’s reference to the Cabinet of Ministers Regulation No. 425 of 17 September 2002 on the by-laws of the state agency Insolvency Administration and the Cabinet of Ministers Regulation No. 556 of 23 December 2002 on the procedure for the submission, examination and satisfaction of employee claims. As the above regulations are not available at the Office nor have they been appended to the Government’s report, the Committee would appreciate receiving a copy of these texts.

Article 10. The Committee requests the Government to indicate any measures seeking to protect the wage guarantee institution (Employee Claims Guarantee Fund) from abusive practices and to specify any relevant legal provisions.

Article 13. The Committee notes that under the transitional provisions of the law of 20 December 2001 on the protection of employees in case of insolvency of the employer, the aggregate amount of employee claims to be satisfied from the resources of the Employee Claims Guarantee Fund could not exceed LVL 400 (approximately US$750) per employee. The Committee also notes that, according to the Government’s report, the maximum amount of guaranteed payment is currently set at LVL 1,000 (approximately US$1,870) per employee. The Committee would be grateful to the Government for transmitting a copy of the legal instrument fixing the new amount and for supplying additional information on the manner and frequency in which this amount is reviewed and adjusted.

Part IV of the report form. The Committee notes the statistical information provided by the Government in its report concerning the number of wage claims settled and the amounts paid by the Employee Claims Guarantee Fund in 2003. The Committee would appreciate if the Government could continue to supply detailed information on the operation, financing and management of the Fund, particularly as regards the employers’ contribution rate, the number of applications received and claims settled per year, the proportion of the paid amounts which are successfully recovered by the Fund, the evolution of the rate of the Fund’s expenditure as compared to its annual income, etc.