How to react in the event of bankruptcy

You can only submit your claim about unpaid salary/wages once you have been given notice and released from duty, or when you have made a termination for breach. 

You must file a claim no later than 4 months from the day the company was declared bankrupt. However, note that LG's payment cannot exceed DKK 160,000.00 net, which means that if you have receivable pay for work performed for several months, on top of salary during a notice period, you may risk that not all months are covered, even if the 6-month period is complied with.

If you want to be part of a possible business transfer from the bankruptcy estate to a new company or want to be available for the bankruptcy estate, do not terminate the employment for breach. There is nothing to prevent you from making a claim and then awaiting further developments. Furthermore, there is nothing to prevent you from holding off and not making a claim in the first place. It follows from the provisions of the Bankruptcy Act that you do not lose a receivable by having patience, as long as the receivable is not older than 6 months from the deadline, which is the day on which the bankruptcy petition is received by the Probate Court. However, note that LG's payment cannot exceed DKK 160,000.00 net, which means that if you have receivable pay for work performed for several months, on top of salary during a notice period, you may risk that not all months are covered, even if the 6-month period is complied with.

If your have not received your salary, but the company has not yet filed for bankruptcy, a claim is made for non-payment of salary as described above. If the company is not able to pay the liabilities that you claim, the company can file for bankruptcy with the Probate Court. If you contact IDA for advice and let us submit your claim, IDA can also handle the bankruptcy petition.

Through LG, you receive payment for:

• Salary, holiday pay and pension for which you do not receive payment, as well as for your notice period. Failure to make a pension contribution can be significant if you have insurance through your pension scheme, which is paid through and conditional on the monthly pension contribution. In those cases, you should contact your pension company and find out what the periodic non-payment means for your insurance policies.
• Lack of additional payment for public holidays
• The value of allowances and benefits such as bonuses, free car, telephone or piecework profit. LG does not provide coverage for per diem allowances and entertainment expenses, travel allowance and expenses that your employer should have reimbursed etc.

When declaring bankruptcy, the Probate Court appoints a trustee to handle the bankruptcy estate. The trustee has two weeks after the bankruptcy to decide how to handle the bankruptcy estate. Typically, the trustee will notify employees within the deadline that they will be terminated and released. If you have not made a termination for breach and you are not released, the trustee may ask you to perform work for the bankruptcy estate, in which case you are obliged to work, but it will be the trustee who will pay your salary for work performed for the bankruptcy estate.

IDA can help with your claim to LG with specific comments on filling out the form as well as to go through it for you once you have completed it. In that case, you must create a case on mit.ida, and in the notification to LG give the lawyer in IDA a power of attorney to access your information inside the actual notification on borger.dk. You will find links to both at the bottom of the article.

LG pays your receivable holiday allowance according to the rules of the Holiday Act. In your claim, it is therefore important that you state what you have left of unpaid leave. It follows from the Holiday Act that LG is entitled to consider as much holiday as possible as held during the notice period. Main holidays of 15 days (over the summer) must be notified three months before the start of the holiday, while other holidays of up to 10 days must be notified at least one month before the start of the holiday. This means that from the time you are released or have terminated your employment for breach and until the end of your notice period, there must be room for both giving the notice and the holiday being notified. This means that LG considers your holiday to be taken during the notice period, regardless of whether you take time off or start a new job.

LG's case processing times vary, but you should expect at least 35 working days from the time you submit the claim until you receive your outstanding payment. For some, going almost two months without an income can be a problem, even if they receive it at a later point. In those cases, you can apply for a membership loan without interest and fees with IDA. The size of the loan is based on your monthly salary excluding your pension contribution, AM contribution and deduction percentage. The loan is granted per. expired month and against set-off in the payment from LG.