1. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Working Group for Chapter 19 – Social Policy and Employment Bilateral screening: Chapter 19 PRESENTATION OF MONTENEGRO Brussels, 11-23 March 2013

2. Chapter 19: Social Policy and Employment M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 19: SOCIAL POLICY AND EMPLOYMENT Protection of employees in case of bankruptcy Vesna Calovic Assistant Director Labor Fond E-mail: fondrada@frada.me

3. Chapter 19: Social Policy and Employment M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 19: SOCIAL POLICY AND EMPLOYMENT PROTECTION OF EMPLOYEES IN CASE OF BANKRUPTCY Directive 2008/94/EC LAW ON BANKRUPTCY ("Official Gazette of Montenegro", No. 01/11) Article 54: Settlement order Costs of the bankruptcy procedure shall be primarily settled from the bankruptcy estate, and after its full settlement, bankruptcy estate obligations shall be settled. Bankruptcy creditors, depending on their claims, are classified into ranks. Bankruptcy creditors of the same rank shall be satisfied in proportion to the amount of claim. The creditors of lower rank may only be satisfied after the creditors of higher rank. Article 55: Payout lines are divided into three payout lines: First payout line includes: unpaid gross wages of employees and former employees, in the amount of the minimum wages for the last two years before the opening of the bankruptcy procedure, with interest from the due date until the date of opening of the bankruptcy procedure; claims of employees, before and after the submission of proposal for initiation of bankruptcy procedure in respect of injuries at work with the bankruptcy debtor;

4. Chapter 19: Social Policy and Employment M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 19: SOCIAL POLICY AND EMPLOYMENT LABOUR LAW: Article 97: Entitlement to payment of outstanding claims of the employee with the employer against which the bankruptcy procedure was initiated: If he/she was employed on the day when the bankruptcy procedure was initiated in the period for which the rights determined by this law are realized. If the claims are not fully or partially paid to him/her, in accordance with the special law (Law on Bankruptcy).

5. Chapter 19: Social Policy and Employment M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 19: SOCIAL POLICY AND EMPLOYMENT LABOUR LAW: Article 98: An employee shall be entitled to payment of: salary and wage compensation during absence from work due to temporary inability to work in accordance with the health insurance regulations that the employer has the obligation to pay in accordance with this law; indemnification for unused annual leave due to employer’s fault, for the calendar year in which the bankruptcy procedure was initiated, if he/she was entitled to it prior to initiation of the bankruptcy procedure; severance pay due to retirement in the calendar year in which the bankruptcy procedure was initiated, if he/she became entitled to retirement prior to initiation of the bankruptcy procedure; indemnification based on a court decision passed in the calendar year in which the bankruptcy procedure was initiated, due to an injury at work or a professional disease, if that decision became final prior to initiation of the bankruptcy procedure. An employee shall be entitled to payment of contributions for mandatory social insurance referred to in paragraph 1 item 1 of this Article, in accordance with the regulations on mandatory social insurance. Article 99: Payment amount Salary and wage compensation shall be paid in the amount of the minimum wage, or indemnification for unused annual leave. Severance pay due to retirement shall be paid in the amount of three average salaries in the economy of Montenegro. Indemnification shall be paid in the amount of the indemnification determined by a decision of the relevant court.

6. Chapter 19: Social Policy and Employment M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 19: SOCIAL POLICY AND EMPLOYMENT LABOUR FUND LAW ON LABOUR FUND ("Official Gazette of Montenegro", No. 88/09 and 39/11) The Fund shall have the capacity of a legal person, and the status of a state fund (Article 2 of the Law on Labour Fund). The Decision on the Establishment of the Fund was adopted by the Government of Montenegro on 21st January 2010 The procedure for the exercise of rights shall be initiated at the request of the employee or bankruptcy administrator, The Management Board of the Fund shall decide on the request. Based on the decision of the MB, the Director shall issue a decision against which an appeal may be lodged within eight days from the day of delivery of the decision. The Ministry shall decide on the appeal against the decision of the member, and an administrative dispute may be initiated against this decision. Deadlines for initiating the procedure: within 30 days from the day of delivery of the final decision, which has established the right to claim; Request for realization of claims may be submitted for claims that are determined by a final judgment following the entry into force of the Labour Law ("Official Gazette of Montenegro", number 49/08), within six months from the day of entry into force of this law; Employees, whose employment relationship, until the day of entry into force of the Labour Law ("Official Gazette of Montenegro", number 49/08), has terminated with the employer due to bankruptcy and employees for whose work the need has terminated due to technological, economic and restructural changes, may initiate a procedure for realization of all outstanding claims with the Fund, within one year from the day of entry into force of this law.

7. Thank you for your attention. QUESTIONS