No C 105/14 Official Journal of the European Communities 26. 4. 79 
B. OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE 
The Economic and Social Committee prepared its opinion on the above matter at its 163 rd 
plenary session held in Brussels on 29 and 30 November 1978. 
The full text of the opinion is as follows: 
THE ECONOMIC AND SOCIAL COMMITTEE, 
Having regard to the Treaty establishing the European 
Economic Community, and in particular Article 75 
thereof, 
Having regard to the request made by the Council of the 
European Communities on 2 October 1978 for an 
opinion (x), 
Having regard to Council Directive 65/269/EEC of 13 
May 1965 concerning the standardization of certain 
rules relating to authorizations for the carriage of goods 
by road between Member States (2), as amended by 
Directive 73/169/EEC (3), 
Having regard to the decision taken by its Bureau on 
19 October 1978 instructing the Section for Transport 
and Communications to draw up an opinion on the 
matter, 
Having regard to the opinion issued by the Section for 
Transport and Communications at its 122nd meeting 
held on 15 November 1978, 
Having regard to the oral report submitted by the 
rapporteur, Mr Renaud (Article 29 of the Rules of 
Procedure), Having regard to the discussions at its 163 rd plenary 
session held on 29 and 30 November 1978 (meeting of 
29 November), 
Whereas the United Nations Economic Commission for 
Europe (ECE) has adopted and recommended for 
application by its Member States resolution No 119 
(revised) on the standardization of the forms used for 
authorizations for international goods transport by road; 
Whereas the application of this resolution is intended 
to standardize models of international transport 
authorizations in a large number of European countries 
and thereby facilitate the international carriage of goods 
by road; 
Whereas resolution No 119 (revised) and the model 
transport authorization which it introduces are 
compatible with the Community provisions concerned; 
Whereas in these circumstances the revised resolution 
should be accepted 
H OJNoC237, 7. 10. 1978, p. 3. 
(2) OJ No 88, 24. 5. 1965, p. 1469/65. 
(3) OJ NoL 181,4.7. 1973, p. 20. HAS ADOPTED THE FOLLOWING OPINION 
unanimously: 
The Committee endorses the Commission's proposal. 
Done at Brussels, 29 November 1978. 
The Chairman 
of the Economic and Social Committee 
Fabrizia BADUEL GLORIOSO 
Opinion on the proposal for a Council Directive on the approximation of the laws of the 
Member States concerning the protection of employees in the event of the insolvency of their 
employer 
(Doc. COM(78) 141 final) 
The text referred to the Committee has been published in Official Journal of the European 
Communities No C 135 of 9 June 1978, page 2. 
A. LEGAL BASIS FOR THE OPINION 
On 26 April 1978 the Council referred the abovementioned proposal to the Economic and 
Social Committee in accordance with Article 100 of the Treaty establishing the European 
Economic Community. 
26. 4. 79 Official Journal of the European Communities No C 105/15 
B. OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE 
The Economic and Social Committee prepared its opinion on the above matter at its 163rd 
plenary session held in Brussels on 29 and 30 November 1978. 
The full text of the opinion is as follows: 
THE ECONOMIC AND SOCIAL COMMITTEE, 
Having regard to the Treaty establishing the European 
Economic Community, and in particular Article 100 
thereof, 
Having regard to the request made by the Council of the 
European Communities on 26 April 1978 for an opinion, 
Having regard to the decision taken by its Bureau on 25 
April 1978 instructing the Section for Social Questions to 
draw up an opinion and a report on the matter, 
Having regard to the opinion issued by the Section for 
Social Questions at its meeting held on 16 November 
1978, 
Having regard to the report submitted by the rapporteur, 
Mr Muhr, 
Having regard to the discussions at its 163rd plenary 
session held on 29 and 30 November 1978 (meeting of 
29 November), 
HAS ADOPTED THE FOLLOWING OPINION 
by 83 votes to two with nine abstentions: 
1. General comments 
1.1. The Committee approves the aim of the proposed 
Directive, namely that workers should be better 
protected in the event of the insolvency of their 
employers, whatever the circumstances involved. 
In the Committee's view, Member States' current 
bankruptcy laws do not, in themselves, sufficiently 
protect workers' claims. Apart from the fact that the 
granting of priority to workers claims under bankruptcy 
law cannot help workers if insufficient assets are 
available to meet these claims, any further considerable 
strengthening of this privileged position may affect the 
creditworthiness of the firms concerned. It is normal 
practice for banks and other finance bodies to require 
securities of one form or another from firms receiving 
loans. If firms give so much priority to meeting workers' 
claim that there is little leeway left for providing such securities, this has the effect of reducing the finance 
bodies' readiness to make money available, which in turn 
puts the firms concerned in an even more precarious 
position. 
1.2. Insolvencies of employers have a particularly 
severe effect on workers, who lose not only their jobs but 
also frequently lose their entitlement to payment of 
outstanding wages. 
1.3. The fact that liquidation is generally a very 
lengthy affair represents yet another problem for 
workers who urgently need their wages in order to meet 
their day-to-day expenses and those of their families. 
Even if in the course of the insolvency proceedings it 
turns out that assets are still available to enable workers' 
claims to be met in full or in part, it is often a matter of 
years before the payments are made. The decline in the 
value of the money in the intervening period is another 
factor which has to be accepted. 
1.4. Insolvencies are an inherent feature of the free 
market economy. In such a system insolvencies are 
generally the result of a process of elimination, and the 
possibility of their occurrence therefore has to be 
accepted. 
1.5. The risk of bankruptcy is only partly dependent 
upon the prevailing economic situation. It is also linked 
to a certain extent to the increasing capital intensity of 
the economy and inadequate financing arrangements. 
Technological progress is another factor which plays a 
role in this respect. Firms which do not, or cannot, keep 
up with this progress become less competitive and 
inevitably run a greater risk of bankruptcy. 
1.6. The world-wide problem of structural change is 
another of the causes of insolvencies. Moreover, 
industrial development in countries of the Third World 
inevitably helps shift production to these countries. This 
can have repercussions on the firms manufacturing these 
products in the Community if they have not adapted, or 
cannot adapt, themselves to meet the changed situation. 
1.7. The Committee thus considers that the financial 
protection for workers proposed in the draft Directive is 
in the interests, not only of workers, but also of 
employers and the economy as a whole. If workers are 
No C 105/16 Official Journal of the European Communities 26. 4. 79 
not given adequate protection even temporary difficulties 
in meeting payments may lead to uncertainty and unrest 
amongst the work force. In such cases highly skilled 
workers in particular are frequently the first to leave a 
firm as they can always find jobs in other firms. Once 
these workers have left, employers are likely to have even 
greater problems on their hands. Firms which otherwise 
would have remained perfectly viable find that their 
continued existence is jeopardized once their executive 
staff and skilled workers have left. 
1.8. In view of the above considerations, the 
Committee agrees that additional arrangements should 
be made, over and above the provisions of bankruptcy 
laws, to guarantee the outstanding claims of the workers 
involved. Such arrangements already exist in some of the 
Member States. 
2. Specific comments 
2.1. Article 1 
2.1.1. The Committee considers the existence of an 
employment relationship to be a sine qua non for the 
Directive's application. It does not fail to recognize that 
judging whether such a relationship exists may present 
certain difficulties in borderline cases. The Committee 
assumes, however, that the terms 'employment 
relationship', 'employer' and 'employee' are adequately 
defined in Member States' current legislation. In this 
opinion, 'employment relationship' covers both employ­
ment and training relationships, and 'employees' covers 
both employees and trainees. 
2.2. Article 2 
2.2.1. The Committee points out that when defining 
'insolvency' it is not a question of covering all the cases 
of what is considered to constitute insolvency in the 
Member States. Article 2 defines insolvency merely 'for 
the purposes of this Directive'. If this definition is 
considered to be too narrow, it is possible to discuss 
whether the Directive's application has to be extended to 
cover other cases. In addition, it does not matter if this or 
that insolvency criterion is of no importance in some 
Member States. 
2.2.2. The Committee's basic view is that Article 2 (c) 
must clearly mean a situation where business activities 
have actually ceased. It does not think that Article 2 
should distinguish between 'temporary' and 'permanent' 
closures, because this might lead to difficulties of 
interpretation and to fraud. 2.3. Article 3 
2.3.1. The Commission believes that the words 
'setting up' in the introductory sentence could be taken 
to mean that Member States will be obliged to establish 
new institutions in furtherance of the proposal's 
objective. The Committee thinks that because of cost 
factors, etc., it must also be possible to use existing 
institutions, especially as most Member States already 
have such insitutions on which they can fall back. 
2.3.2. The Committee also thinks that the term 
'institution' is too restrictive. The purpose of the 
proposal is to give employees a guarantee against the loss 
of their claims without bankruptcy proceedings having 
to be instituted. Whether this should be done through an 
'institution' or in another suitable way is immaterial and 
must be left to the Member States to decide. The 
Committee therefore proposes that the introductory 
sentence be amended to read as follows: 
'Member States shall take the necessary measures to 
ensure the satisfaction of unfulfilled claims arising 
before the onset of insolvency . . .' 
So as to make it expressly clear that all employees' claims 
from their period of employment are covered, the 
Committee also proposes that the introductory sentence 
be further amended to read as follows: 
'Member States shall take the necessary measures to 
ensure the satisfaction of unfulfilled claims arising 
before the onset of the employer's insolvency on the 
basis of legal and administrative provisions and 
collective and individual labour agreements and 
relating to: 
(a) remunerations . . .; 
(b) other cash 
2,4. Article 4 
2.4.1. By analogy with the proposed amendment to 
Article 3, the Committee proposes that the introductory 
sentence to Article 4 be amended to read as follows: 
'Member States may limit the obligation to pay 
claims within the framework of the measures 
adopted under Article 3, but in no case to less 
than: . . .' 
2.4.2. The Committee agrees with the time limits in 
Article 4 being different. It would point out that 
employees' claims are divided into two groups. The 
claims listed under (a) are the day-to-day payments to 
26. 4. 79 Official Journal of the European Communities No C 105/17 
employees such as wages. Indent (b), on the other hand, 
covers one-off payments that are linked to specific events 
such as sickness, Christmas, etc. A three-month limit for 
indent (b) claims would cause employees undue 
hardship. 
2.5. Article 5 
2.5.1. The Committee would point out that in most 
Member States in which measures similar to those 
proposed have already been taken, funds are provided 
solely by the employers. This is justified since employers' 
insolvency is completely outside the employees' control 
and is simply a business risk. It therefore has its doubts 
about the wording 'the institutions must not be financed 
solely by contributions from employees'. 
2.5.2. Moreover, the Member States also have the 
possibility of financing measures out of official funds. 
2.5.3. The Committee considers that the Member 
States should decide how employees' claims should be 
submitted. It therefore suggests that the sentence 'A 
verbal application shall be sufficient' in Article 5 (c) be 
deleted. 
2.5.4. In view of these comments and in line with the 
proposed amendments to Article 3, Article 5 should be 
amended as follows: 
'In implementing Article 3 the Member States shall 
observe the following principles: (a) if an institution is responsible for implementing 
the measures, its assets must be independent of 
the employers' business assets and inaccessible 
to insolvency proceedings; 
(b) employers must contribute towards the 
financing of the institutions; the public 
authorities and, possibly, employees may also 
contribute; 
(c) payment shall be made on the application of the 
employee entitled to claim. Applications shall be 
admissible from the onset of insolvency and 
must be made within a period of six months 
thereafter; 
(d) the guarantee institution's liability towards an 
employee entitled to claim shall not depend on 
whether the employer concerned has fulfilled 
the obligations ensuing from the measures 
incumbent on the Member States under Article 3; 
(e) Member States may only make payment 
dependent on claims being either undisputed or 
substantiated.' 
2.5.5. The Committee also assumes that in 
implementing the measures taken by them, the Member 
States can make institutions responsible for specific 
sectors or areas of the economy and that the requisite 
financing will be undertaken at the level of these sectors. 
2.5.6. In the Committee's view, it should be laid down 
in the proposed Directive that when the institution settles 
workers' claims it shall acquire the right to put in its own 
claim against their employer, and thus have the 
opportunity of recouping its money. 
Done at Brussels, 29 November 1978. 
The Chairman 
of the Economic and Social Committee 
Fabrizia BADUEL GLORIOSO 
ANNEX 
to the opinion of the Economic and Social Committee 
The following amendment was rejected during the debates: 
On page 4, replace points 2.2.1 and 2.2.2 with the following text: 
'The Section points out that in cases where the proceedings referred to in Article 2 (a) are not set in 
train, it is not clear when this period for the submission of the employee's application is to begin. An 
objectively determinable instant for the onset of insolvency thereof has to be laid down for the cases 
listed under (b) and (c). This would be done if Article 2 (b) and (c) in the proposal were replaced by 
the following: 
No C 105/18 Official Journal of the European Communities 26. 4. 79 
(b) it is obvious from the accounts or other reliable evidence that the employer has insufficient assets 
and so such proceedings would be pointless. It would be up to the appropriate court to decide 
whether this was the case as rapidly as possible following a request to do so from an employee.' 
Reason 
The amendment is self-explanatory. 
Voting 
For: 7; against: large majority; abstentions: 31. 
As a result of the adoption of an amendment during the debates, the following passage of the Section's 
opinion was replaced: 
Page 7, point 2.5.4. (b) 
'(b) the institutions may be financed by contributions from employers, employees and the public 
authorities. They may not, however, be financed by employees' contributions alone.' 
Voting 
For: large majority; against: 3; abstentions: 9. 
Opinion on the proposals by the Commission concerning the Community's generalized tariff 
preferences scheme for 1979 
(Doc. COM(78) 470 final) 
The text referred to the Committee has not yet been published in the Official Journal of the 
European Communities. 
A. LEGAL BASIS FOR THE OPINION 
On 13 October 1978 the Council referred the abovementioned proposal to the Economic and 
Social Committee in accordance with Article 198 of the Treaty establishing the European 
Economic Community. 
B. OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE 
The Economic and Social Committee prepared its opinion on the above matter at its 163rd 
plenary session held in Brussels on 29 and 30 November 1978. 
The full text of the opinion is as follows: 
THE ECONOMIC AND SOCIAL COMMITTEE, 
Having regard to the Treaty establishing the European 
Economic Community, and in particular Article 198 
thereof, 
Having regard to the request made by the Council of the 
European Communities on 13 October 1978 for an 
opinion, Having regard to the decision taken by its Bureau on 
18 October 1978 instructing the Section for External 
Relations to draw up an opinion on the matter, 
Having regard to the opinion issued by the Section for 
External Relations at its meeting held on 14 November 
1978, 
Having regard to the report submitted by the rapporteur, 
Mr Cremer,