My company closed: what are the workers’ rights?

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My company closed: what are the workers' rights?

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Especially in times of uncertainty and economic crisis, it is normal to feel instabilities at work. And then there are several doubts, such as “My company closed, what are my rights?”, “The company went bankrupt, what now?”

When the company decrees bankruptcy or closes its doors for other reasons it means that it is finalizing the employment contract with its employees. In such cases, they have the right to receive all the amounts that they would be entitled to if the employer dismissed them without just cause. That is, they should receive:

  • balance of wages and benefits that are open / overdue;
  • early warning;
  • 40% fine on the amounts deposited in the FGTS account with the release of the existing balance in this account;
  • overdue and proportional vacations, adding 1/3;
  • provision of unemployment insurance guides;
  • FGTS;
  • 13th salary.

We know that it is common for workers to not know these answers. However, it is very important to seek information to understand what employees are actually entitled to.

With that in mind, we have prepared this content so that you know all the rights you should have if your company closed. Stay with us and know what to do, especially in cases where the employer refuses to shoulder your obligations. Come on?

Are employees entitled if the company closed?

The main question that professionals usually have is whether or not they have the right when the companies that work close their doors. The answer is yes! Every employee has all the rights of a company termination without cause.

With extinction or bankruptcy decree, the initiative to terminate the employment contract is entirely up to the employer. This means that employees must in no way be harmed by the situation.

Thus, if the company closed, it must pay all the severance payments owed to its team. Thus, the employee must receive the following funds:

  • balance of wages and benefits that are open / overdue;
  • early warning;
  • 40% fine on the amounts deposited in the FGTS account with the release of the existing balance in this account;
  • overdue and proportional vacations, adding 1/3;
  • provision of unemployment insurance guides;
  • 13th salary.

What happens if the company goes bankrupt?

Even if the company closes due to bankruptcy, the employee should not be penalized. This is because the risk of economic activity belongs to the employer and cannot be passed on to employees.

Thus, the company must first pay for the labor credits, up to the value of 150 minimum wages, only after that it will be able to settle the remaining debts of its business.

This happens because the court prioritizes the payment of the company’s debts with its workers, considering that the employee is the most dependent part of this fund recovery.

For this reason, all professionals need to keep in mind that they will not be abandoned, since the legislation requires that all their labor rights be fulfilled.

Point out what are the employee’s rights in this situation and what the company has to pay him, as well as guidelines on what to do if the employer refuses to shoulder its legal obligations.

What are the rules on unemployment insurance and the grace period in these cases?

Unemployment insurance is guaranteed to anyone who goes through an unfair dismissal. To better understand what are the conditions for applying for the benefit and to understand who is entitled to receive it, we suggest further reading of this article.

Now, if you have the right and your company has closed, you need to understand if it is within the grace period required to obtain the benefit.

The federal government grants unemployment insurance, so the employer has no influence on the payment of the benefit. Therefore, even if the company has gone bankrupt, what will be decisive for its receipt will be the type of dismissal and the grace period for obtaining values.

In this case, as the company closed, the reason is without cause. Therefore, what will be evaluated is only the grace period. To receive the benefit, the employee must have a minimum working time in the company. Understand better below:

  • first request: the employee must have a period of work of at least 12 months to receive 4 installments or 24 months to receive a total of 5 installments;
  • second request: requires a period of 9 months to receive 3 installments, 12 months to receive 4 installments or 24 months to be entitled to 5 installments;
  • third request: follows a period of 6 months, to receive 3 installments, 12 months to receive 4 installments and 24 months to receive 5 installments of the benefit.

That way, if your company closed, even for bankruptcy reasons, and you are within one of the required grace periods, you can apply for unemployment insurance as normal.

How to claim your rights after the company goes bankrupt?

Even if you know all your rights in case your organization closes, it is crucial to know what steps should be taken in the face of this situation.

First, it is necessary that all your rights are calculated in order to be able to be triggered. For that, you must gather some documents, such as: Work and Social Security Card with the company registration, badges, payslips, among other documents that prove your link with the company.

In addition, it is necessary to make a survey about your vacation, 13th salary, among other important rights of the worker that must be paid.

But what if the company refuses to pay?

Unfortunately, many organizations, particularly in the event of bankruptcy, claim a lack of money for severance pay and refuse to pay. However, as previously stated, labor credits must be paid.

In this way, workers’ rights must be paid off with the “company’s assets”, that is, with what is collected from the sale of all the organization’s assets.

Therefore, if the company refuses to pay, it is necessary for the employee to go to court in order to safeguard his rights and thus avoid possible losses. Thus, a labor lawyer may file a lawsuit in the Labor Court.

In the petition, a statement will be made exposing the entire situation, clarifying what are the damages suffered by the employee when the company closed. In addition, an average of amounts that should have been paid upon termination of the employment contract will be established.

At a first hearing, an agreement may be made between the parties. If this happens, everything can be resolved more easily. However, if there is no understanding, the process may take longer to resolve.

There is no way to set a deadline for the progress and completion of the process. It can only last a few months or extend for years in court. This will depend on appeals, bureaucracies and time of the judges.

It is important to know that if the company closed due to bankruptcy, it is common for it to refuse to pay labor debts. Therefore, it is essential to observe the signs to understand the real situation of the organization to act before the worst happens. Keep an eye out if wages are late, if the company is losing customers, in short, situations that demonstrate that it is going in a bad way.

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