Legal and social consequences of bankruptcy of legal entities

In: Social'naja politika i social'noe partnerstvo (Social Policy and Social Partnership), Heft 4, S. 282-287

Abstract

In this challenging time, when the economic situation is unstable, many companies have to face such a phenomenon as bankruptcy. The procedure is new for our country and, therefore, its implementation is associated with a number of difficulties and issues. Bankruptcy sometimes turns out to be the only civilized way for a legal entity to solve the problem of accumulated debts. This procedure allows reorganizing or liquidating a business in compliance with the interests of the owner and creditors. Bankruptcy as a civil procedure has its own legal and social consequences, fi rst of all, when it comes to the workforce and threats to lay off the organization's staff . As a rule, bankruptcy affects the personnel of an organization or an enterprise and, in this case, it becomes extremely important to respect the labor rights of members of the labor collective at all levels. Dismissal of employees during the liquidation of an enterprise must be carried out strictly in accordance with the articles of the Labor Code of the Russian Federation. The contractual relationship is terminated in stages. Certain categories of workers are of great importance — people with disabilities, pregnant women, underage employees, mothers and fathers involved in raising children without a second parent, etc.