This Commission working document concerns the implementation of Article 8 and related provisions of Council Directive 80/987/EEC of 20 October 1980 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer, concerning supplementary company or inter-company pension schemes outside the national statutory social security schemes.

To recall, Directive 80/987/EEC provides for protecting employees’ rights in the event of the insolvency of their employer, in particular in order to guarantee payment of their outstanding claims (wages, pensions and other benefits). It was extended and adapted by Directive 2002/74/EC to cover insolvency proceedings other than liquidation also and to give legal certainty in the event of insolvency of transnational undertakings. Article 8 of Directive 80/987/EEC, which was not affected by the 2002 revision, concerns old-age benefits, including survivors’ benefits, under supplementary company or inter-company pension schemes outside the national statutory social security schemes. As the number and importance of occupational pension schemes increase across the EU Member States, the associated economic risks are expected to become more visible and will raise problems from the perspective of protecting workers’ and pensioners’ rights. Employers’ insolvency is one of those risks, and the Commission departments concerned have received a significant number of complaints and petitions, which not only suggest the growing practical importance of situations covered by Article 8 of Directive 80/987/EEC, but also reveal considerable differences of opinion on the specific obligations that it imposes on Member States.

The last general reports on transposition of Directive 80/987/EEC date back to 1995 for the EU-12 and to 1996 for Austria, Finland and Sweden . No report exists on the Member States that have joined the EU since 2004. This report examines the current legal situation and measures implementing Article 8 of Directive 80/987/EEC in 25 Member States. A separate report on Bulgaria and Romania will be submitted in 2009.

This report provides an overview of implementation of Article 8 of Directive 80/987/EEC in the Member States . The following aspects are examined: what are the national measures transposing Article 8 in the Member State, what types of supplementary pension system exist in the Member State and, if there is the possibility of establishing a pension or guarantee fund, are the following criteria met: the pension fund should be separated from the employer’s capital, it should create sufficient assets, it should ensure careful investments and will it be subject to independent supervision. Finally, this section will also examine whether there is sufficient protection against under-funding from the point of view of Directive 80/987/EEC and whether or not contributions not paid by an insolvent employer are protected in the Member State.

The report concludes that mo st Member States have in place specific measures aimed at meeting the requirements of Article 8 of Directive 80/987/EEC. Although this working paper is descriptive and is not intended to assess the conformity of the measures in place with the obligations imposed by Article 8 of the Directive, it is clear that, in certain cases, issues can be raised as regards the extent to which some of these measures are sufficient to protect the interests of employees and retired persons in the event of insolvency of the employer. Further investigation is therefore needed in order to address the following issues:

how to protect employees and retired persons against the risk of under-funding of the pension schemes, and to what extent; how to guarantee any unpaid contributions to the pension schemes; how to deal with cases where the supplementary pensions scheme is managed by the employer himself.

The Commission departments concerned intend to pursue this investigation by means of bilateral contacts with Member States, combined with a specific study to be conducted in cooperation with the main stakeholders. The Social Protection Committee, in particular, will be involved in such a study.

SEC(2008)0475
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PURPOSE : to amend Council Directive 80/987/EEC on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer.

LEGISLATIVE ACT : Directive 2002/74/EC of the European Parliament and of the Council amending Council Directive 80/987/EEC on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer.

CONTENT : the Council adopted this Directive which amends Directive 80/987/EEC.

It is important to move to protect workers in the context of the transnationality of undertakings,

especially during the present phase of restructuring and reorganisation of undertakings. Directive 80/987/EEC aims to provide a minimum degree of protection for employees in the event of the insolvency of their employer. To this end it obliges the Member States to establish a body which guarantees payment of the outstanding pay claims of the employees concerned.

Changes in insolvency law in the Member States and the development of the internal market mean that certain provisions of that Directive must be adapted. This Directive aims, in actual fact, adapt and improve the existing Directive and takes account of the established case law of the Court of Justice, of changes in working life and of the development of insolvency legislation in the Member States.

In order to ensure equitable protection for the employees concerned, the definition of the state of insolvency should be adapted to new legislative trends in the Member States and should also include within this concept insolvency proceedings other than liquidation. In this context, Member States should, in order to determine the liability of the guarantee institution, be able to lay down that where an insolvency situation results in several insolvency proceedings, the situation be treated as a single insolvency procedure.

In order to ensure legal certainty for employees in the event of insolvency of undertakings pursuing their activities in a number of Member States, a provision is included in the text which expressly states which institution is responsible for meeting pay claims, the institution responsible being that in the Member State in whose territory the workers concerned work or habitually work.

When an undertaking with activities in the territories of at least 2 Member States is in a state of insolvency, the institution responsible for meeting employees' outstanding claims shall be that in

the Member State in whose territory they work or habitually work. The extent of employees' rights shall be determined by the law governing the competent guarantee institution.

The Directive also stipulates that Member States may not exclude from the scope of this Directive part-time employees, workers with a fixed-term contract or workers with a temporary employment relationship. In addition, they may not set a minimum duration for the contract of employment or the employment relationship in order for workers to qualify for claims under this Directive.

Member States shall specify the length of the period for which outstanding claims are to be met by the guarantee institution. However, this may not be shorter than a period covering the remuneration of the last three months of the employment relationship prior to and/or after the date determined by the Member States. Member States may include this minimum period of three months in a reference period with a duration of not less than six months.

Member States having a reference period of not less than 18 months may limit the period for which outstanding claims are met by the guarantee institution to eight weeks. In this case, those periods which are most favorable to the employee are used for the calculation of the minimum period.

Furthermore, Member States may set ceilings on the payments made by the guarantee institution. These ceilings must not fall below a level which is socially compatible with the social objective of this Directive. Member States shall inform the Commission of the methods used to set the ceiling.

In order to make it easier to identify insolvency proceedings in particular in situations with a cross-border dimension, provision should be made for the Member States to notify the Commission and the other Member States about the types of insolvency proceedings which give rise to intervention by the guarantee institution.

Implementation of this Directive shall not under any circumstances be sufficient grounds for a regression in relation to the current situation in the Member States and in relation to the general level of protection of workers in the area covered by it.

By 8 October 2010 at the latest, the Commission shall submit to the European Parliament and the Council a report on the implementation and application of this Directive in the Member States.

ENTRY INTO FORCE : 08/10/2002.

TRANSPOSITION : 08/10/2005.

Directive 2002/74
OJ L 270 08.10.2002, p. 0010-0013

COM(2002)0265
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T5-0219/2002
OJ C 180 31.07.2003, p. 0024-0122 E

T5-0219/2002

Debate in Parliament

A5-0143/2002

A5-0143/2002

SEC(2002)0200
EUR-Lex

14854/1/2001
OJ C 119 22.05.2002, p. 0001 E

14854/1/2001

T5-0627/2001
OJ C 153 27.06.2002, p. 0031-0243 E

T5-0627/2001

Debate in Parliament

A5-0348/2001

A5-0348/2001

CES0718/2001
OJ C 221 07.08.2001, p. 0110

EUR-Lex
OJ C 154 29.05.2001, p. 0109 E
COM(2000)0832

EUR-Lex
COM(2000)0832