The purpose of the insolvency benefit (employer's insolvency benefit) is to compensate the employee for the unreceived salary, holiday pay and benefits that had not been received at the time of cancellation of the employment contract but which were prescribed by the Employment Contracts Act. The Unemployment Insurance Fund pays compensation to employees within the set limits. An employer is deemed to be insolvent if a court has declared bankruptcy or terminated the bankruptcy proceedings by abatement.
The trustee in bankruptcy or an interim trustee shall submit the application for insolvency benefit to the Unemployment Insurance Fund. You can apply for insolvency benefits after your employer has been deemed to be insolvent by court.
To receive the benefit, the employee must contact the trustee in bankruptcy or an interim trustee and also provide their confirmation for the amount of the claim. The employee must also provide the trustee with all documents at his disposal in support of the claim.
The receipt of the benefit is not dependent on the unemployment insurance period – a worker is entitled to the benefit regardless of whether and how long their employer has paid unemployment insurance premiums.