Bankruptcy Law and Labor Procedure Law: interferences and proposals for (counter) reform

Abstract

Insolvency legislation has always affected labor interests, mainly because the former surrounds the company and the latter protect the workers. The balance between maintaining the company and respecting employment and Social Security rights has not always been identical, with insolvency legislation evolving more in favor of the viability of the company than the permanence of jobs. The contractual modifications, suspensions or dismissals of the bankrupt company generate a whole system of labor and Social Security credits. Context that is overstated when the insolvent company is transferred by sale of the production unit to another company that intends to subrogate the assets, but not the liabilities of the insolvent company. The exoneration of labor credits and, above all, those derived from Social Security debts cause permanent regulatory and judicial conflicts, not always resolved. This analysis exposes the most illustrative procedural aspects of this perennial controversy, partly relativized with the prominence achieved by the pre-bankruptcy rules and the preservation of labor and public credits, and provides brief lines of future action, promoting procedural simplification, with guarantees and efficiency.