Employee Insolvency Priorities and Employment Protection in France, Germany, and the United Kingdom

When an employer becomes insolvent, employees’ claims for unpaid wages and contributions may be protected through statutory priorities, social security schemes, or a combination of both. This article compares the interplay of employee statutory priorities, if they exist, and social security schemes in France, Germany, and the United Kingdom. While France protects employees through both a statutory priority and a social security scheme, Germany and the United Kingdom have progressively reduced employment protection over the last forty years. Theories of varieties of capitalism and of legal origins cannot fully describe and explain the development of employment protection strategies in these countries. The evolution of the German and British regimes, in particular, are better explained as a sign of profound cultural shifts regarding the position of labour within firms and vis-à-vis other stakeholders. Finally, I also show that a cumulative application of employee priorities and insurance schemes is not necessarily redundant.