LITHUANIA LAW ON GAUARNTEE FUND
ficial translation REPUBLIC
LITHUANIA LAW ON THE GUARANTEE FUND 12 September 2000 No. VIII-1926 (as amended by 27 February 2001 No. IX-191) Vilnius CHAPTER ONE GENERAL PROVISIONS Article 1. Purpose
the Law 1. This Law establishes the purpose, legal basis
activities, management, and financial sources
the Guarantee Fund. 2. The provisions
this Law shall be applicable to all enterprises, public agencies, banks and credit unions (hereinafter - enterprises) which are registered in accordance with the procedure established by the laws
the Republic
Lithuania. Article 2. General Provisions
the Founding and Management
the Guarantee Fund 1. The founder
the Guarantee Fund is the Government
the Republic
Lithuania. 2. The administrator
the Guarantee Fund shall be the institution authorised by the Government
the Republic
Lithuania. The activities
the administrator
the Guarantee Fund shall be regulated by the Regulations
the Guarantee Fund that shall be subject to the approval
the Government
the Republic
Lithuania.
the Republic
Lithuania, the Law
the Republic
Lithuania on Enterprise Bankruptcy, this Law and other laws
the Republic
Lithuania, Resolutions
the Government
the Republic
Lithuania, Regulations
the Guarantee Fund and other legal acts
the Republic
Lithuania. Article 3. Purpose
the Guarantee Fund The resources
the Guarantee Fund shall be allocated for the payment
sums in the amount fixed by this Law to the workers
enterprises in the process
going bankrupt or bankrupt enterprises whose employment relationship with the said enterprises was discontinued and to workers who continue employment relationship with the enterprise which is in the process
going bankrupt, if the enterprise has not paid their outstanding claims as well as for covering the Guarantee Fund administration expenses according to the procedure laid down in the Regulations
the Guarantee Fund. CHAPTER TWO RESOURCES
THE GUARANTEE FUND, USE AND COTROL THEREOF Article 4. Resources
the Guarantee Fund 1. The resources
the Guarantee Fund shall be comprised
: 1) contributions by enterprises specified in Article 1
this Law, amounting to 0.2 percent
the wages computed for workers (sum on the basis
which compulsory state social insurance contributions are calculated); 2) resources
the Privatisation Fund and state budget resources allocated under a separate programme; 3) funds received from the enterprises which are in the process
going bankrupt or bankrupt enterprises in satisfaction
creditor claims
the Guarantee Fund; 4) voluntary contributions by natural and legal persons, and enterprises without the rights
a legal person. 2. Resources
the Guarantee Fund shall be accumulated and kept in the State Treasury account opened with the Bank
Lithuania.
enterprises to the Guarantee Fund shall be paid in accordance with the following procedure: 1) the enterprises shall calculate the amount due and pay the contributions as
the day from which calculation
the worker’s wage commences. 2) contributions shall be paid once a month by the fifteenth day
the next month. 5. The resources
the Guarantee Fund shall be used only for the purpose provided for in Article 3
this Law. Article 5. Use
the Guarantee Fund Resources 1. The workers specified in Article 3
this Law shall be paid the following sums due to them prior to the day
application to the Guarantee Fund: 1) the amount
the worker’s outstanding claims for wages, however, limited to a sum fixed by the Government on the recommendation
the Council
the Guarantee Fund. The sum prescribed by the Government shall not be below the amount
three minimum monthly wages; 2) monetary compensation for the unused annual holiday, but only for a period not longer than the minimum annual holiday established by the Law on Holidays and for not longer than one year
work; 3) severance pay in the amount fixed in Article 40
the Law on Employment Contract in case
termination
employment relationship with the worker; 4) compensation for damage caused by accidents at work or occupational disease, payable in the amount established by the Provisional Law
the Republic
Lithuania on Damage Compensation in Accident at Work or Occupational Disease Cases, where the obligation is not transferred to the state according to the procedure laid down in the law referred to above; 5) payment
outstanding claims relating to pay for idle time. The amount
pay shall not be more than the amount fixed by the Government on the recommendation
the Guarantee Fund. 2. The amounts payable from the Guarantee Fund under paragraph 1
this Article shall be calculated on the basis
claims
workers
enterprises in the process
going bankrupt or bankrupt enterprises, arising out
their employment relationships prior to the opening
the enterprise bankruptcy proceedings and for a period not longer than two months after the opening
bankruptcy proceedings 3. The approved amount
the workers’ creditor claims shall be reduced by the amount paid from the Guarantee Fund. The Guarantee Fund shall have recourse against the said amount. Creditor claims
the Guarantee Fund shall be satisfied in accordance with the procedure established by the Law on Enterprise Bankruptcy. 4. Single payment
the amounts under paragraph 1
this Article shall be made to workers
an enterprise in the process
going bankrupt or bankrupt enterprises. 5. The resources
the Guarantee Fund shall also be used to cover the Guarantee Fund administration expenses according to the procedure laid down in the Regulations
the Guarantee Fund. Article 6. Procedure
Allocation
Guarantee Fund Resources 1. The procedure
allocation
the Guarantee Fund resources shall be laid down in the Regulations
the Guarantee Fund. 2. Documents regarding allocation
resources for the payment
workers’ claims resulting from employment relationships shall be submitted to the administrator
the Guarantee Fund, in accordance with the procedures established in the Regulations
the Guarantee Fund, by the administrator
an enterprise which is in the process
going bankrupt or the chairman
the liquidation commission
a bankrupt enterprise within 2 weeks from the day
approval
creditor claims. 3. Allocation
resources from the Guarantee Fund shall be initiated by the administrator
the Guarantee Fund, when, after a lapse
2 months from the day
approval
creditor claims, the workers (worker)
an enterprise which is in the process
going bankrupt or a bankrupt enterprise or an organisation representing them notifies the Council
the Guarantee Fund in writing that the administrator
the enterprise which is in the process
going bankrupt or the chairman
the liquidation commission
the bankrupt enterprise has failed to apply for the allocation
resources. 4. The workers (worker)
an enterprise which is in the process
going bankrupt or a bankrupt enterprise or the organisation representing them must give the administrator
the enterprise which is in the process
going bankrupt or the chairman
the liquidation commission
the bankrupt enterprise a written 15-day advance notice
their intention to apply the Council
the Guarantee Fund. A copy
the notice shall be enclosed with the statement addressed to the administrator
the Guarantee Fund. 5. The decision regarding allocation
the Guarantee Fund resources on the recommendation
the administrator
the Guarantee Fund shall be taken by the Council
the Guarantee Fund not later than within a month from the day
receipt
documents from the administrator
the Guarantee Fund. 6. After the Council
the Guarantee Fund takes a decision to allocate the resources, the administrator
the Guarantee Fund and the administrator
the enterprise which is in the process
going bankrupt or the chairman
the liquidation commission
the bankrupt enterprise shall conclude an agreement on the transfer
the Guarantee Fund resources to the enterprise. 7. Decisions
the Council
the Guarantee Fund may be appealed against in accordance with procedure established by laws. Article 7. Financial Control
the Guarantee Fund 1. Financial activities
the Guarantee Fund shall be controlled by the St ate Control. 2. Financial statements
the Guarantee Fund shall be subject to annual inspection by an auditor or a firm
auditors. The Council
the Guarantee Fund shall publish its annual financial statements together with the auditor’s report in the information supplement “Informaciniai pranešimai” attached to the publication “Valstybės žinios” (”
ficial Gazette”) within 3 months from the close
the financial year. CHAPTER THREE MANAGEMENT
THE GUARANTEE FUND Article 8. Council
the Guarantee Fund 1. The Guarantee Fund shall be managed by the Council
the Guarantee Fund. The composition
the Council
the Guarantee Fund shall be subject to the approval by the Government
the Republic
Lithuania. 2. The Council
the Guarantee Fund shall be composed
12 members: 4 members shall represent organisations protecting the interests
workers (professional unions and their associations), 4 - the organisations
employers (unions, associations, etc.) and 4 - state administration institutions. Representatives
the organisations protecting the interests
workers and representatives
employers shall be delegated by the organisations which are representing them, whereas the representatives
state administration institutions shall be appointed by the Government. 3. The activities
the Council
the Guarantee Fund shall be directed by the Chairman. He shall be appointed by the Government from the representatives
state administration institutions. Article 9. Competence
the Council
the Guarantee Fund 1. The activities
the Council
the Guarantee Fund shall be established by the Regulations
the Guarantee Fund. 2. The Council
the Guarantee Fund shall: 1) manage the resources
the Fund; 2) make decisions regarding the allocation
the resources
the Guarantee Fund; 3) submit proposals to the Government regarding the setting
a ceiling to the liability for workers’ outstanding claims as provided for in subparagraphs
the activities
the Guarantee Fund to the Government; 5) submit recommendations on the issues relating to the activities
the Guarantee Fund to the Government; 6) approve the model form
the agreement on the transfer
the Guarantee Fund resources to an enterprise; 7) carry out other tasks and functions set forth in the Regulations
the Guarantee Fund. Article 10. Functions
the Administrator
the Guarantee Fund The main functions
the administrator
the Guarantee Fund shall be as follows: 1) carrying out directions
the Council
the Guarantee Fund and its chairman; 2) accepting applications from the enterprises which are in the process
going bankrupt or bankrupt enterprises requesting allocation
resources for payment
workers’ outstanding claims referred to in Article 3, examining the applications and adjusting them for the meetings
the Council
the Fund; 3) after the Council
the Guarantee Fund adopts a decision to allocate the resources, concluding an agreement on the transfer
resources to the enterprise; 4) representing the Guarantee Fund, according to the competence established by the Regulations
the Guarantee Fund, in state and local government institutions, judicial and other institutions, enterprises and organisations in all matters relating to the Fund activities. The interests
the Guarantee Fund may also be represented by other institutions authorised by the Government
the Republic
Lithuania; 5) drawing up semi-annual and annual reports
the Guarantee Fund; 6) controlling and accumulating information on the use
the Guarantee Fund resources; 7) resolving other issues provided for in the Regulations
the Guarantee Fund. CHAPTER FOUR FINAL PROVISIONS Article 11. Reorganisation and Liquidation
the Guarantee Fund 1. The Guarantee Fund shall be reorganised and liquidated by the Government
the Republic
Lithuania. 2. Upon the liquidation
the Guarantee Fund the procedure for using the unused resources shall be laid down by the founder
the Fund. Article 12. Coming into Force
the Law and its Application 1. This Law shall come into force as
1 October
this Law shall not be applicable to the enterprises in respect
which bankruptcy proceedings have been opened before the date
coming into force
this Law. In cases where the workers
an enterprise which is in the process
going bankrupt or a bankrupt enterprise have already been paid during the bankruptcy proceedings a certain portion
their outstanding claims relating to wages, the liability to make payment to them under subparagraph
this Law shall be reduced by the amount paid. 3. Examination
the applications by the enterprises which are in the process
going bankrupt or bankrupt enterprises for the allocation
resources from the Guarantee Fund to the workers specified in Article 3
this Law shall be started in the Council
the Guarantee Fund not earlier than after 3 months from the day
coming into force
this Law. 4. The outstanding claims
workers
enterprises in which bankruptcy proceedings were opened before the coming into force
this Law shall be paid from the Privatisation Fund resources and financial assistance resources repaid by the enterprises, which had been allocated to them from the Fund for the payment
outstanding claims arising out
the employment relationships
workers
enterprises in the process
going bankrupt or bankrupt enterprises, which have been accumulated in the Guarantee Fund. Payment
outstanding claims
workers
enterprises in which bankruptcy proceedings were opened after the coming into force
this Law shall be made from the contributions by the enterprises, state budget resources allocated under a separate programme and resources recovered by recourse as provided for in this Law, accumulated in the Guarantee Fund.
contributions calculated and payable to the Guarantee Fund from 15 March 2001. Article 13. Implementation
the Law The Government shall: 1) approve the Regulations
the Guarantee Fund; 2) approve the composition
the Council
the Guarantee Fund; 3) approve the procedure
application
subparagraphs
this Law to the enterprises in respect
which bankruptcy proceedings were opened prior to the day
coming into force
this Law; 4) make provisions for the allocations for the initial contribution to the Guarantee Fund in the draft
the state budget for 2001; 5) draft amendments to the Law on the Privatisation
State-owned and Municipal Property, prescribing the use
a portion
privatisation funds for the Guarantee Fund. I promulgate this Law passed by the Seimas
the Republic
Lithuania PRESIDENT
THE REPUBLIC VALDAS ADAMKUS
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