What happens to your job if your employer goes bankrupt?
It can be a concern for many employees: what happens to work and wages if the employer goes out of business? The good news is that you are not completely empty-handed. This article discusses what happens if your employer goes bankrupt, what your rights are and what compensation you can expect.
Your contract continues, but there is a notice period
In principle, when an employer goes bankrupt, your employment contract continues. The contract is not automatically terminated. Only when the trustee terminates the contract, the employment ends. The notice period is usually between four and six weeks, depending on the specific circumstances and the agreements in your contract.
Wage continuation and bankruptcy benefits
In most cases, your employer will not be able to continue paying your full wages due to the bankruptcy. Fortunately, the UWV (Uitvoeringsinstituut Werknemersverzekeringen) will intervene and pay your wages for a period of up to thirteen weeks, until the trustee terminates your employment contract.
In addition to salary, you will also receive benefits for the notice period through the UWV. This includes not only salary, but also vacation pay, outstanding vacation days and pension contributions for the last 12 months of your employment. Together, these benefits are called the "bankruptcy benefit." It is important to note that the bankruptcy benefit is only provided by the trustee up to the time of termination.
Entitled to unemployment benefits and not entitled to severance pay
If you become unemployed after your bankrupt employer's notice period has expired, you are entitled to unemployment benefits. This benefit provides temporary financial support, but please note that you are not entitled to the usual transfer compensation or other severance payments that normally apply when you are laid off.
What if the company relaunches?
It sometimes happens that a company relaunches after bankruptcy. In that case, the new owner is usually not required to offer employment contracts to existing employees. If you choose to join the restarted company, you will often retain your employment history and any permanent contract you had with your previous employer.
Conclusion
Although your employer's bankruptcy brings uncertainty, you are not completely without rights. Among other things, you will be paid your wages through the UWV, including vacation pay and outstanding vacation days. Make sure you know what you are entitled to and how to take the proper steps in the event of your employer's bankruptcy.
This blog was written by Mr. Stijn Blom, employment lawyer at Arbeidsadvocaat.nl B.V. Stijn has extensive experience in employment law and assists entrepreneurs daily with a wide range of employment-related matters. From dismissal cases to drafting watertight contracts and policies – with his practical and personal approach, he helps employers and employees move forward. Want to know more?Visit Stijn's page.
Arbeidsadvocaat.nl is happy to think with you if you have any questions about salary continuation. Please feel free to contact us .
April 2025
