If the company does not pay my salary what should I do? In modern times many companies facing the current economic crisis are unable to pay wages to their employees, placing the employee in a situation of confusion, since they are providing services without being paid for them. What does one do in a situation of this kind? Do you keep working? Can I strike?

The non-payment of wages or continued delays in their payment entitles the worker to apply for a discharge of the labour contract through the social courts using art. 50.1.b) ET. For a successful cause-based adjudicative “non-payment or late payment on a continuing basis the agreed wage,” the concurrence of the requirement of ‘gravity’ in business failure is necessary and such “gravity” must be determined and assessed.

If the delay or default is serious/continuous this will judged on the following criteria:

– Objective: That the failure or delay in payment is regardless of the guilt of the company

– Temporary non-payment or delay must be continued and persistent over time and quantitative

– Quantitative: the amount of the debt.

There are graver consequences if the non-payment of wages is not a mere sporadic delay sporadic but instead persistent behaviour, meaning the continuous failure to meet wages due. It should be noted that paying the amount of wages overdue before the conclusion of the hearing eliminates the possibility of a successful action for serious non-payment.

If they don’t pay my wages, must I continue working?

For the success of a court action it is a prerequisite that the employment relationship is still alive at the time of action, as judicially speaking the end of the relationship would be considered voluntary redundancy if broken beforehand. So as a rule the worker must remain in office until the final judgment.

If the worker fails to report to work it shall be construed as voluntary withdrawal, with a corresponding loss of the action and unemployment benefits. That is unless the work was generating a distressing situation, either dangerous or humiliating to the worker, in which case the decision to leave work would not cause resignation on their part or any other form of breakdown of the employment relationship.

Before seeking judicial termination of the contract must I have tried to claim my wages out of court?

No, requesting the termination does not require the worker to previously attempt claiming their wages from the employer. The employer is obliged to comply with the Statute of the timely payment of wages.

What if the company is in a serious economic situation, does this prevent me from bringing proceedings?

No, regardless of whether the company is facing a serious economic crisis, if there are delays in payment of wages to an employee with sufficient gravity, this will constitute good cause for the judicial termination of the employment contract.

If this economic crisis prevents the employer from complying with its obligation to the timely payment of wages then the statutory rules enables them to complete a form for the change in working conditions – either a suspension or termination, “ex” arts 41, 47, 51 or 52c ET. However they cannot obtain a remission or postponement in the payment of wage obligations on their own authority or against the will of the worker concerned.

What happens if the company is bankrupt?

The individual enforcement actions filed after the insolvency declaration will be halted pending the outcome of it. Therefore, it will necessary to wait for the measures which are chosen to be adopted from the proceedings. If the bankruptcy proceedings caused the extinction of your contract, this would be cause a lack of action because as previously mentioned, it is inescapable requirement that the employment relationship is alive.

In this case the general rules for a collective dismissal will apply, providing compensation of 20 days per year of service, for up to a maximum of 12 months compensation. It is very important that in situations of economic crisis/bankruptcy that the employee acts quickly in order to achieve the highest possible compensation.

What would I receive if my lawsuit is successful?

The legal scope for compensation is specifically provided in paragraph 2 of Article 50 in conjunction with 56.1 a) of the Workers´ Statute. It states that the compensation provided for unfair dismissal shall be 33 days per year of service, limited to the number specified in that provision.

After the judge has declared the termination of employment, it may then be possible to request unemployment benefits.

If you wish to know more about your employee rights or require more advice for your specific situation, please don’t hesitate to contact our labour department today.