What compensation can an employee receive in the event of bankruptcy of the employer?

The employee is compensated for the following:

• the pay and holiday pay payable to the employee before the employer was declared insolvent;
• the compensation payable to the employee upon termination of the contract of employment before or after the employer was declared insolvent.

Thereby the employee may be paid up to three average gross monthly salaries, but not more than three average gross monthly salaries in Estonia as published by the Statistical Office in the quarter preceding the adoption of the decision to declare bankruptcy or the abatement of the bankruptcy proceedings. The compensation is paid by the Estonian Unemployment Insurance Fund. A compensation application is filed with the Unemployment Insurance Fund by the trustee in bankruptcy, not the employee. Allocation of compensation is decided within 10 days as from the submission of the application by the trustee in bankruptcy and the compensation is paid within 5 days as from its allocation.