Information Note on the Court’s case-law 214

January 2018

Acar and Others v. Turkey (dec.) - 26878/07 and 32446/07

Decision 12.12.2017 [Section II]

Article 1 of Protocol No. 1

Article 1 para. 1 of Protocol No. 1

Deprivation of property

Peaceful enjoyment of possessions

Lower ranking of certain employee claims under insolvency laws: inadmissible

Article 14

Discrimination

Lower ranking of certain employee claims un der insolvency laws: inadmissible

Facts – Under section 206 of the Enforcement and Bankruptcy Act (Law no. 2004), on an insolvency the work-related claims of employees accrued within the year prior to the opening of the insolvency proceedings were consider ed priority claims and ranked ahead of work related claims not accrued within that period. In the Convention proceedings, the applicants complained in particular about the non-priority ranking of their work related claims falling outside the one-year refer ence period.

Law

Article 1 of Protocol No. 1: To the extent the applicants’ complaints could be taken to concern the applicable legislative framework as such and its effect on their rights under Article 1 of Protocol No. 1, the ranking of creditors was a common feature of Contracting States’ domestic systems, being designed to strike a balance between competing creditors and broader public interests in the face of a bankrupt debtor who does not have sufficient assets to satisfy the claims of all its creditors. The complexit y of insolvency proceedings calls naturally for regulation by the State in order to ensure equal and fair treatment of creditors that are in analogous or similar situations and, since they are in principle better placed than the international judge to appr eciate what is “in the public interest”, the national authorities enjoy a wide margin of appreciation in this field.

As to proportionality, in many Contracting States priority was accorded to workers’ claims for debts up to a certain amount or covering a s pecific period in the distribution of the debtor employer’s assets. The provisions of Turkey’s insolvency legislation that gave a first-ranking priority to workers’ claims over ordinary claims, but after secured creditors and the expenses of the administra tion, corresponded to the level of protection required by ILO Convention no. 95 on Protection of Wages 1949 as well as ILO Convention no. 173 on Protection of Workers’ Claims (Employer’s Insolvency) 1992. Furthermore, the reference period of one year for such claims to be accor ded priority could not be regarded as unreasonably short, especially in comparison to the minimum three-month period provided for in ILO Convention no. 173. For the period falling outside the one year reference period, the presumption that creditors could make use of regular enforcement proceedings could be regarded as justification for not granting such claims priority.

Conclusion : inadmissible (manifestly ill-founded).

Article 14 of the Convention in conjunction with Article 1 of Protocol No. 1: The Court had doubts over whether the situation complained of by the applicants was analogous or relevantly similar to that of other workers whose claims accrued within the one-year period prior to insolvency because, unlike such other workers, the applicants had h ad a window of opportunity to enforce their claims individually by starting regular enforcement proceedings against the debtor before it was declared insolvent. However, even assuming that the situation was analogous or relevantly similar, the difference i n treatment was, for the reasons explained in relation to the complaint under Article 1 of Protocol No. 1, objectively and reasonably justified.

Conclusion : inadmissible (manifestly ill-founded).

© Council of Europe/European Court of Human Rights This sum mary by the Registry does not bind the Court.

Click here for the Case-Law Information Notes