Book III — Conditions of Employment
Article 110Worker preference in case of bankruptcy.
ELI5— what this means for you
If your employer goes bankrupt, your unpaid wages and benefits are paid FIRST — before government claims and before other creditors. Workers have first preference in bankruptcy proceedings.
Key point
Company going bankrupt? Your unpaid wages get paid before everyone else — including the government.
Official text — PD 442
Worker preference in case of bankruptcy.
In the event of bankruptcy or liquidation of an employers business, his workers shall enjoy first preference as regards their wages and other monetary claims, any provisions of law to the contrary notwithstanding. Such unpaid wages and monetary claims shall be paid in full before claims of the government and other creditors may be paid. (As amended by Section 1, Republic Act No. 6715, March 21, 1989)
Source: lawphil.net (PD 442 as amended)
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Legal disclaimer: BatasKo provides general legal information, not legal advice. For advice on your specific employment situation, consult a licensed Filipino lawyer or the Public Attorney's Office (PAO) at pao.gov.ph.