Encounter bankruptcy, China's bankruptcy system on the staff placement related policies and issues of thinking.

my country's bankruptcy system has always put the protection of the interests of employees as the top priority. In the 2009 "Opinions of the Supreme People's Court on the Correct Trial of Enterprise Bankruptcy Cases to Provide Judicial Guarantees for Maintaining the Order of the Market Economy", it is clear that "in bankruptcy procedures, we must pay attention to protection People's livelihood, and earnestly safeguard the legitimate rights and interests of employees". Article 6 of the Enterprise Bankruptcy Law states that "the people's court shall protect the legitimate rights and interests of enterprise employees in accordance with the law when hearing bankruptcy cases. However, in practice, the author found that there are still some problems in the placement of employees in bankrupt enterprises, which cannot be solved by relying on existing policies, regulations and systems, and thus thought about it.

1. the relevant policies of the existing bankruptcy system in China.

1. the People's Republic of China Enterprise Bankruptcy Law (effective as of June 1, 2007)

Article 48 stipulates: "Creditors shall declare their claims to the administrator within the time limit for the declaration of claims determined by the people's court. The wages and medical, disability subsidies, and pension expenses owed by the debtor to the employees, the basic old-age insurance and basic medical insurance expenses that should be included in the employee's personal account, and the compensation that should be paid to the employees as stipulated by laws and administrative regulations, do not need to be declared, and the administrator shall make a list after investigation and make it public. If the employee has any objection to the list, he may request the administrator to correct it; if the administrator refuses to correct it, the employee may bring a lawsuit to the people's court."

Article 113 stipulates: "After the bankruptcy property has given priority to paying off the bankruptcy expenses and common benefit debts, it shall be paid off in the following order: (1) the wages and medical, disability subsidies, and pension expenses owed by the bankrupt to the employees, The basic pension insurance and basic medical insurance expenses that should be transferred to the employee's personal account, and the compensation that should be paid to the employee according to laws and administrative regulations; (II) the social insurance premiums owed by the bankrupt and the taxes owed by the bankrupt other than those provided for in the preceding paragraph; (III) ordinary bankruptcy claims. If the bankruptcy property is insufficient to satisfy the liquidation requirements in the same order, it shall be distributed in proportion. The salaries of directors, supervisors and senior managers of an insolvent enterprise are calculated on the basis of the average salary of the employees of the enterprise."

Article 132 stipulates: "after the implementation of this law, the wages, medical treatment, disability subsidies and pension expenses owed by the bankrupt before the promulgation of this law, the basic old-age insurance and basic medical insurance expenses that should be transferred to the employee's personal account, as well as the compensation that should be paid to the employee according to laws and administrative regulations, shall be paid off in accordance with the provisions of Article 113 of this law, specific property under article 109 of this Law has priority over the compensation of the right holder who has a security right in that specific property."

2. Provisions of the Supreme People's Court on Several Issues concerning the Application of Law to Enterprise Bankruptcy Cases that have not been concluded at the time of the implementation of the the People's Republic of China Enterprise Bankruptcy Law (to be implemented as of June 1, 2007)

Article 14 stipulates: "After the implementation of the enterprise bankruptcy law, if the employees of the bankrupt claim their rights in accordance with the provisions of Article 132 of the enterprise bankruptcy law, the people's court shall support it."

Article 15 stipulates: "The wages owed by the bankrupt to directors, supervisors and senior management shall be adjusted in accordance with the provisions of the third paragraph of Article 113 of the Enterprise Bankruptcy Law."

3. (II) of the Provisions of the Supreme People's Court on Several Issues concerning the Application of the the People's Republic of China Enterprise Bankruptcy Law (to be implemented as of September 16, 2013)

Article 24 stipulates: "When the debtor has the circumstances specified in the first paragraph of Article 2 of the Enterprise Bankruptcy Law, the following income obtained by the debtor's directors, supervisors and senior management personnel using their powers shall be recognized by the people's court as the enterprise bankruptcy law. Article 36 provides abnormal income: (1) performance bonus; wage income obtained when the (II) is generally in arrears with the wages of employees; (III) other abnormal income. If the directors, supervisors and senior managers of the debtor refuse to return the above-mentioned debtor's property to the administrator, and the administrator claims that the above-mentioned personnel should be returned, the people's court shall support it.

4. Provisions of the Supreme People's Court on Several Issues Concerning the Trial of Enterprise Bankruptcy Cases (effective as of September 1, 2002)

Article 57 stipulates: "The labor remuneration owed by the debtor to informal workers (including short-term workers) shall be paid off in the order stipulated in the second paragraph of Article 37 of the Enterprise Bankruptcy Law, paragraph (I).

Article 58 stipulates: "The funds raised by the debtor to the employees of the enterprise shall be paid off in accordance with the order stipulated in Item (I) of Paragraph 2 of Article 37 of the Enterprise Bankruptcy Law. However, the high interest portion that violates the provisions of the law shall not be protected. The employee's investment in the enterprise shall not be a bankruptcy claim."

Article 81 stipulates: "The employee housing of a bankrupt enterprise that has signed a contract, delivered the house price, and has been reformed to an individual, does not belong to the bankruptcy property. If the housing reform has not been carried out, the liquidation group may apply to the relevant department for the housing reform and sell it to the employee. If the housing reform conditions are not met in accordance with the provisions of the State, or the employee does not purchase the housing in the housing reform, the liquidation group shall handle according to the actual situation."

Article 90 states: "During liquidation, the living expenses and medical expenses of employees may be paid on a priority basis from the bankruptcy estate."

5. Opinions of the Supreme People's Court on Several Issues Concerning the Correct Trial of Enterprise Bankruptcy Cases and the Provision of Judicial Guarantee for the Maintenance of Market Economic Order (to be implemented on June 12, 2009)

Article 5: "For sensitive bankruptcy cases such as outstanding wage arrears and employment problems of employees, intensified conflicts among creditors, and debtors abandoning enterprises and evading debts, it is necessary to promptly report to the local party committee and win the support of the government. Under the coordination of the government, strengthen communication and cooperation with relevant departments, take effective measures in a timely manner, actively channel and resolve various contradictions and disputes, avoid looting of enterprise property and collective petitions by employees, and eliminate unstable factors in the bud. Where conditions permit, priority may be given to the resettlement of employees of bankrupt enterprises through the stability maintenance fund set up by the government or by encouraging third-party advances, and advances made by the government or third parties on labor claims may be given priority in the bankruptcy proceedings in accordance with the order in which the employees' claims are paid."

Article 8: "Giving priority to the protection of workers' rights and interests in accordance with the law is an important value orientation of the bankruptcy legal system. In the trial of enterprise bankruptcy cases, the people's courts must effectively safeguard the legitimate rights and interests of employees and strictly protect the interests of employees in accordance with the law. The meeting of creditors shall be held with the participation of the debtor's employees and trade union representatives to protect the employees' right to participate in the bankruptcy proceedings. If the employee disagrees with the salary and other claims confirmed by the manager, the manager shall carefully review and check, and correct the error in time; if the manager fails to correct the error, the people's court shall strictly hear the case in accordance with the law and make a judgment in a timely manner.

Article 9: "When voting on the draft reorganization plan, the wishes of the employees shall be fully respected, and a special voting group shall be set up to vote on the creditor's rights such as the wages owed by the debtor to the employees; if the voting group of the employee creditors fails to pass the draft reorganization plan, the people's court Compulsory approval must be based on the full repayment of the employee's claims that should be paid off first. If the enterprise continues to maintain its original business scope, the people's court shall guide the debtor or administrator to ensure the jobs of the original employees of the enterprise as much as possible when preparing the draft enterprise reorganization plan."

Article 10: "The protection of the legitimate rights and interests of employees requires the joint efforts of all sectors of society. The people's courts shall strengthen communication and coordination with the state social security departments, labor departments, industrial and commercial administration departments, organization and personnel departments, actively put forward judicial proposals, and promote the establishment and improvement of a social security system suitable for Chinese characteristics."

6. Minutes of the National Court Bankruptcy Trial Work Conference (to be implemented by the Supreme People's Court on March 4, 2018)

Article 27 states: "The bankruptcy of an enterprise and the protection of the rights and interests of employees. In the bankruptcy procedure, it is necessary to properly handle labor relations in accordance with the law, promote the improvement of the guarantee mechanism for employees' arrears of wages, and protect employees' right to survival in accordance with the law. The employee claims advanced by a third party shall, in principle, be paid off in accordance with the nature of the employee claims advanced; if advanced by the wage protection fund, it shall be paid off in accordance with the order of the second paragraph of the first paragraph of Article 113 of the Enterprise Bankruptcy Law. The housing fund owed by the debtor shall be paid in accordance with the nature of the wages owed by the debtor."

The Problems of Staff in the Process of 2. Practice

The contradiction between the late payment of (I) social security claims and the reality of the settlement of ordinary claims.

The law does not provide for whether the late fees arising from the failure to pay social security in full and on time before the bankruptcy application is accepted are bankruptcy claims and whether they have priority to be paid. In actual operation, based on the fact that social security creditor's rights and tax creditor's rights belong to the same sequence in bankruptcy procedure, and the mechanism of late payment of social security creditor's rights is the same as that of late payment of tax creditor's rights, according to the Supreme People's Court's Law Interpretation (2012) No. 9 "Reply on Whether the Tax Authorities Should Accept the Claim for Confirmation of Late Payment of Tax Claim", the late fees arising from the failure to pay social security in full and on time before the bankruptcy application is accepted are recognized as ordinary claims. However, the social security department believes that the late fee has been audited and cannot be changed. If it is not paid in full, employees cannot enjoy social security benefits.

In reality, there are cases in which the local government participates in the bankruptcy procedure. In order to avoid the state's public power and ordinary creditors "competing for profits" and to protect ordinary creditors to the greatest extent, the government has made minutes of the meeting to reduce or exempt social security late fees, so that bankrupt enterprises can avoid paying late fees. However, for bankrupt enterprises without government participation, it is difficult for the local social security department to write off or reduce the social security late fees, and the amount of overdue fees reserved cannot be paid in full.

Is it necessary for the basic medical insurance expenses owed by the (II) that should be transferred to the employee's personal account to be listed separately in the employee's claim?

Article 48 of the Enterprise Bankruptcy Law stipulates that the wages owed by the debtor to the employees and the basic old-age insurance and basic medical insurance expenses that should be transferred to the employee's personal account shall be listed and publicized by the administrator after investigation. On December 3, 2005, the State Council issued the "Decision of the State Council on Improving the Basic Pension Insurance System for Enterprise Employees" (Guo Fa [2005] No. 38), Article 6 of which stipulates that from January 1, 2006, unit contributions will no longer be transferred to personal accounts. In the practice of bankruptcy, it should be impossible to meet the employee's creditor's rights such as "the basic old-age insurance owed to the employee's personal account", while "the basic medical insurance expenses owed to the employee's personal account" still exists. Local municipal governments have also stipulated in the employee medical insurance measures that part of the medical insurance expenses paid from the unit shall be transferred to the employee's personal account according to the prescribed proportion of the employee's different age group.

However, in reality, the social security department is worried about auditing and other reasons, and will not make a decision to write off or reduce social insurance, let alone accept that enterprises do not pay the social security fund and transfer the above-mentioned medical expenses to personal accounts, which is difficult to realize the creditor's rights of this part of employees.

(III) staff co-ordination of non-cost issues

The Enterprise Bankruptcy Law does not include the cost of serious illness medical insurance for retired workers in the workers' claims, and lacks relevant judicial interpretations. According to the "Notice on Issues Concerning the Participation of Basic Medical Insurance for Employees in Provincial Institutions and Institutions" (Lu Renshe Fa [2012] No. 52), for state-owned enterprises that have been restructured from institutions and coordinated by the provincial social security, their retired employees Monthly large medical expenses subsidy funds shall be paid together with basic medical insurance premiums at the standard of 10 yuan per person per month. Judging from the current actual situation, if a bankrupt company stops paying or late paying the medical insurance expenses for serious illnesses of retired employees, it will directly cause the medical insurance card for retired employees to be unusable. In addition to serious illness medical insurance, at present, retired employees of provincial state-owned enterprises also enjoy housing subsidies and other out-of-plan subsidies in addition to the overall expenses of the social security fund. In addition, there are survivors subsidies, simplified and decentralized personnel subsidies and other out-of-plan expenses borne by enterprises. The accrual or reservation of the above expenses lacks relevant basis and management channels. If it is not guaranteed, it is easy to cause mass incidents and is not conducive to social stability.

According to the General Office of the Jinan Municipal Committee of the Communist Party of China and the General Office of the Jinan Municipal People's Government, Jinan City Implementation<关于国有企业退休人员社会化管理的指导意见>According to the notice of the "Implementation Plan" (Ji Hall Zi [2020] No. 3), the relevant benefits such as supplementary medical insurance and medical mutual assistance for retirees of state-owned enterprises shall be solved according to the original channels to ensure that the level of treatment will not be reduced. According to the spirit of the document, the non-co-ordination expenses are still solved by the original channels. After the social security, archives and other related management of retired employees are transferred to the community, the problems of the distribution channels of serious illness medical insurance and non-co-ordination expenses still exist in bankruptcy liquidation cases.

Related problems caused by poor medical insurance treatment in (IV)

At present, there are differences between provincial medical insurance and municipal medical insurance in the proportion of hospitalization reimbursement and drug list, and in practice, there are still problems such as the difficulty of hospitalization in municipal medical insurance. After the bankruptcy of enterprises with provincial social security co-ordination, the social security benefits of employees will be changed from the original provincial social security co-ordination to the municipal social security co-ordination. In view of the actual poor medical insurance benefits, the problem of employees of bankrupt enterprises demanding to retain provincial medical insurance benefits is widespread. However, there is a lack of relevant policies or channels to protect the provincial social security benefits of bankrupt workers.

(V) the treatment of employees of bankrupt enterprises less than five years from retirement

At present, the Jinan Municipal People's Government's "Notice on Printing and Distributing the Trial Provisions on Several Issues Concerning the Reform of State-owned Property Rights of Municipal Enterprises in Jinan City" (Jizhenfa [2006] No. 5) clearly stipulates that municipal state-owned enterprises are less than five years away from the retirement age. The principle and method of accruing the employee resettlement security fund, and in practice, relevant institutions can be selected for trusteeship. However, at present, the provincial state-owned enterprises lack the relevant accounting and guarantee policies, and the provincial trusteeship institutions are missing, which makes the managers more passive in dealing with related issues.

Problems Faced by (VI) in Implementing the Separation and Transfer of "Three Supplies and One Industry" in Bankruptcy Liquidation Cases

According to Guoban Fa [2016] No. 45 "Notice of the General Office of the State Council Forwarding the State-owned Assets Supervision and Administration Commission of the State Council and the Ministry of Finance on the Guiding Opinions on the Separation and Transfer of" Three Supplies and One Industry "in the Family Areas of State-owned Enterprise Employees, the separation and transfer of water supply, power supply, heat supply (gas supply) and property management (collectively referred to as" three supplies and one industry ") is an important part of state-owned enterprise)," Three supplies and one industry "often involve the vital interests of employees. If it cannot be properly handed over, it is easy to cause employee problems. After entering the bankruptcy liquidation procedure, state-owned enterprises face many difficulties in implementing the separation and transfer of "three supplies and one industry:

1, three for one industry involved in the payment or advance of funds. According to the provisions of the Bankruptcy Law, bankruptcy costs and common interest debts do not include the relevant costs that will be incurred by the transfer, and it is more difficult for the administrator to obtain the support of the creditors' meeting in the process of transferring the three-for-one industry, which involves the expenditure of funds and advances.

2. Due to the restrictions of the transfer of "three supplies and one industry" to the state-owned enterprises and other conditions, especially the property companies and heating companies involved in the transfer process and the original employee communities have overlapping rights and responsibilities or conflicts of interest, thus affecting the heating and heating of the employee communities and easily causing employee group problems. In bankruptcy liquidation cases without government involvement, it is more difficult for the administrator to coordinate the various parties involved.

3. related recommendations

(I), in the bankruptcy liquidation cases of enterprises without the participation of the government, only the court and the administrator can not comprehensively coordinate and deal with all kinds of problems related to the treatment or living security of employees. If such problems can not be properly solved, it is easy to cause employee group incidents, which is not conducive to the stable promotion of bankruptcy work. According to the "Jinan Intermediate People's Court Bankruptcy Case Trial Operation Guidelines (Trial)" (issued on April 6, 2017), the debtor must prepare a detailed employee placement plan before entering the bankruptcy procedure. If the debtor is a state-owned enterprise or a collective enterprise, the plan shall specify the basic information of the employees to be resettled, the obstacles to resettlement and the main solutions, the assessment of stability factors and the main countermeasures; if the debtor is a limited liability company or a joint stock limited company, the employee resettlement plan shall specify the compensation plan that the debtor shall give to the employees in accordance with the law after the debtor terminates the labor relationship with the employees. It is very important to evaluate the stabilizing factors for the proper placement of employees and take corresponding measures before entering the bankruptcy procedure. For state-owned enterprises with many historical problems, it is recommended that government departments designate specialized agencies or personnel to form a docking or communication mechanism with the acceptance court, administrator or liquidation group of bankrupt enterprises within their jurisdiction, after the enterprise enters the bankruptcy liquidation procedure, it can coordinate the medical insurance, social security, SASAC and other relevant departments to properly handle the resettlement of employees and the "three supplies and one industry" and other related issues related to the livelihood security of employees.

The (II) proposes to unify from the policy level the overall expenses of retired employees of bankrupt enterprises, the guarantee of employees' benefits less than five years away from retirement, and the accrual or resettlement of other related employees' resettlement expenses, so as to avoid bankrupt enterprises domiciled in the same area from having different protection standards for employees due to different levels of central enterprises, provincial state-owned enterprises, municipal state-owned enterprises, etc. It is suggested to further reduce the poor treatment of provincial and municipal medical insurance, and unify the treatment of provincial and municipal medical insurance when conditions permit.