Decree-Law no. 59/2015 – D.R. no. 77/2015, Series I of 2015-04-21 Ministry of Solidarity, Employment and Social Security

Approves the new regime for the Remuneration Guarantee Fund (FGS), established in Article 336 of the Labour Code, transposing 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.

Under the new regime, the FGS now also covers employees who work or have habitually worked within national territory, for an employer with activities in the territories of at least two Member States, even if the employer is declared insolvent by a tribunal or competent authority of another Member State of the European Union or of the European Economic Area.

The FGS aims to ensure payment to the employees of part of claims arising from a employment contract or its termination when employers cannot pay them, due the fact that they are in a state of insolvency or in a difficult economic situation. However, based on the previous scheme, Social Security understood that the new business recovery tools (Special Revitalisation Procedure [PER] or Company Recovery System through Out-of- Court Agreements [SIREVE] were not covered by the FGS regime, which left a number of employees without protection.

Decree-Law 59/2015 now adapts the FGS regime to the Revitalise Programme ( Programa Revitalizar), guaranteeing that claims of employees in companies assigned  to revitalisation or recovery plans (PER or SIREVE) also have access to FGS.

According to the new regime, FGS ensures the payment to the employee of claims arising from employment contracts or their breach or termination, provided that:

  1. The employer is declared insolvent;
  2. A temporary judicial administrator is appointed by a judge by court order, in the case of PER;
  3. The  request submitted by IAPMEI is accepted by court order, within the framework of SIREVE.

FGS guarantees the payment of, at the most, six months of  remuneration, with a monthly limit of three times the minimum wage (currently, €505.00).

The rule by which FGS ensures payment of credits outstanding in the six months prior to the commencement of legal proceedings  seeking a declaration of  insolvency or the submission of  the PER application  or  extrajudicial company recovery proceedings (SIREVE) was maintained, and the payment of the credits is now guaranteed up to one year from the day after the day on which contract of employment terminated.

Only applications submitted after it comes into effect are subject to the new FGS regime. However, the regime includes a transitory rule, according to which access to FGS is ensured  for  employees  who  have  submitted  applications  during  PER,  or  between  1 September 2012 and the date of entry into force of Decree-Law 59/2015 – 1 May 2015 – provided they are covered by an insolvency plan, approved by a court judgment, thus extending the scope of FGS, through re-examination of the facts of by the Court’s.