Document Type

Article

Disciplines

International Law

Abstract

National Reports reveal that the law concerned with insolvency and the protection of workers' rights is currently at a dynamic stage. In most developed western nations, the experience of recent years shows that major reform of insolvency law has recently been achieved (for example, in France, Hungary, and United Kingdom), is currently under way (Federal Republic of Germany), or exists as an item on the political agenda for consideration in the near future (U.S.A).

As a preliminary question, why should this be the common experience of so many countries? The answer may be that the last two decades have witnessed social and economic changes that have affected the functioning of commercial operations in individual countries. The consequences of the oil crisis of 1973 produced the first period of disruption, and the second period of depression took place in the early 1980s. These periods of economic depression contributed to a convergence of concerns within the legal systems of different countries. One such concern is the phenomenon of insolvency and the consequences this brings to the enterprise affected, those who work in it, and those in the wider community whose interests may be profoundly affected by the enterprise's failure. Insolvency can be seen as a risk for all who engage in economic activity. It constitutes a grave concern for those in employment - either because it threatens the continuation of jobs for those in work, or it places in danger the maintenance of previously set terms and conditions of employment: In addition, like any ordinary commercial creditor, the worker may have financial claims against the insolvent employer arising out of past service which cannot be satisfied because of the latter's lack of resources.

The economic depression of the early 1980s brought realization on the part of governments and other actors within society of the need for suitable responses from the state to deal with insolvency and its consequences. The national reports record the significant increase in the number of insolvencies occurring during this period. Thus, the new regimes already introduced or about to be introduced for the regulation of insolvency may be generally characterized as a reaction to a contemporary problem of great magnitude. The concern of international bodies such as the European Commission and the International Labor Office with particular aspects of insolvency as it affects workers' rights' underlies the importance which the protection of workers' interests holds within this larger question. While it would be fair, however, to say that the surveys of traditional legal approaches to insolvency and to workers' rights are generally critical of what they discover, it would be quite wrong to suggest that there is any widespread agreement between countries about the direction reform should take. Although the need for additional protections for workers' rights does emerge as a strong feature in the discussion, there is little agreement about how this is best achieved or the extent to which the protection of such rights should take precedence over other commercial and administrative considerations.

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