Study On The Priority Protection Of The Bankruptcy Labor Creditor’s Rights

"All social sciences fail to achieve absolute truth. Therefore, all social sciences should embrace reflection. As a kind of studying method, reflection can and must be used in the Science of Law and Company Law. Therefore, as for the accustomed propositions in the realm of jurisprudence, we should try our best to figure out how they are proposed and developed. Only through reflection, can researchers be able to communicate with their inner worlds and finally can we build scientific system." Inspired by the above idea, the following study was made.The 113 rd article of China’s Enterprise Bankruptcy Law has regulated the distribution order of bankruptcy property, which puts the labor creditor’s rights in the first place.The regulation demonstrates our country’s protection on the labor creditor’s rights of the bankrupt enterprises’ employees and concern for laborer’s interest. It also shows our country’s priority protection on relevant groups by interfering in private law area through using legal means.However, With the principle of equality of creditor’s rights in mind, people are confused that whether the regulation runs counter to the principle. To figure out this problem means that we should have a good understanding of the equality of the creditor’s rights. Creditor’s rights can be classified in different classes.And "Creditor’s rights of the same class should be treated equally and vice versa. How to divide creditor’s rights into different classes involves the balance of interests and the value judgments of the creditor’s rights. Another more controversial issue is that how to deal with the relationship between the bankruptcy labor creditor’s rights and the real right of security and which should be given priority. Bankruptcy Law aims to adjust market order and optimize resource allocation. Whether the law should give priority to the creditor’s right of security on property that bears on the safe and stable market order or the labor creditor’s rights that is crucial to building a stable and harmonious society also involves the value judgment and the current role of Bankruptcy Law. The answer to this issue determines whether making the bankruptcy labor creditor’s rights a priority can be justified and whether China’s current protection system on the bankruptcy labor creditor’s rights is reasonable and how to improve the system.The analysis of the property of bankruptcy labor creditor’s right lays the foundation for this paper. The property of bankruptcy labor creditor’s right directly determines how to protect the right. Josef Hubert Bernhard Windscheid, a German scholar, had put forward the idea of claim right, which is a kind of relief right for the infringed primary right.As both the primary right and the claim right are of continuity and have same purpose, the two are closely relevant in property. The claim right of labor’s remuneration comes from labor’s remuneration right.The two has the same purpose of protecting the labor gains,and therefore they are also closely relevant in property. In the bankruptcy procedure, the claim right of labor’s remuneration will translate into the bankruptcy labor creditor’s right, which has dual properties of both the private right and human rights. Its property of private right enables laborers to participate in the bankruptcy procedures and the distribution process of insolvent properties, while its property of human rights determines that the labor creditor’s right should be given priority in the distribution process of insolvent properties.Why the labor creditor’s right should be given priority? How about the relationship between it and the equality of creditor’s rights? The answer to these issues is the theoretical foundation for justifying the priority protection of bankruptcy labor creditor’s right. The equality of creditor’s rights, the basic principle in the field of creditor’s rights, usually refers to the formal equality, opportunity equality of of the creditor’s rights and the equal status of the creditors. But it is not a comprehensive appreciation. Academia have different interpretation on the connotation of equality and they analyzed it from different perspectives. The equality includes both formal equality and substantive equality pursuing the fair result. Equality of creditor’s rights, a mode of equality, presents different kinds of paradigms. Specifically, when the debtor’s property is sufficient to discharge all the debts, the creditor has equal opportunities to enjoy the creditor’ rights, the debtor enjoys the freedom of fulfilling the right, realizing creditor’s rights apply to formal equality; when the debtor’s property is insufficient to discharge all the debts, according to whether debt discharge enter the judicial enforcement procedure, the formal equality and substantive equality of the claim are respectively suitable. Bankruptcy procedure is excellent in realizing the substantive equality of creditor’s rights, because it has the following reasons, the legitimacy of the existence of prior creditor’s rights, Lockean Theory of Labor Property Rights, and labor products’ security role in labor consideration, which implement the rules of “creditor’s rights have different levels, and equal rights are treated equally”.The above research confirms that the priority protection of the bankruptcy labor creditor’s right does not violate the principle of the equality of the creditor’s right, but it only eliminates the basic theoretical obstacles of the priority protection of the bankruptcy labor creditor’s right and there is no justification for why should we give priority protection to the bankruptcy labor creditor’s rights. The priority protection of the bankruptcy labor creditor’s rights is studied from the perspective of legislation in the second half of this paper. First of all, this paper studies the bankruptcy labor creditor’s rights from the view of favorable allocation of legal rights, and discusses the legitimacy and feasibility of the favorable allocation of the bankruptcy labor creditor’s rights. The general equality of personality brings people’s substantial inequality. It provides people with full freedom, while it enlarge gaps among people. With the development of modern society and the progress of human civilization, the gaps among people have been recognized and concerned, and the pursuit of substantive justice has become an important issue for us. As one of people’s technologies, the law conforms to the needs of human development, with the method of favorable allocation of legal tights to adjust the real inequality among people, reduce the gaps among people and realize the real justice of the society. Generally speaking, there are three features of the law fields which the favorable allocation of legal rights can be used in: First, the subject of this law field has the features of typing and layering, namely the main body layer is clear and there is no conversion between subjects; Second, there is a conflict of interest between the subjects; Third, there is a contrasted dynamics between the subjects. The bankruptcy law is a procedural legal system to summarize the settlements of debts, it relates to the interests of the debtor, the creditor as well as the public, with the balance of interests as the legal adjustment method. Therefore, the bankruptcy law is in full compliance with the law field of the favorable allocation of legal rights. The survival value, the order value and the justice value of the labor creditor’s rights and the weak position of the labor determine the legitimacy of the bankruptcy law to the labor creditor’s rights’ favorable allocation. The judicial procedure and the seal procedure of bankruptcy procedures determine the feasibility of the labor creditor’s rights’ favorable allocation. In fact, China’s current Enterprise Bankruptcy Law has adopted the favorable allocation of legal rights to the labor creditor’s rights, which are mainly reflected in two aspects: substance and procedure. In the substantial aspect, it refers to the favorable allocation of the assignment based on the rank(The labor creditor’s right is preferential to the ordinary creditor’s rights and before the bankruptcy law enacted, the labor creditor’s rights is preferential to secured creditor’s rights) and the individual liquidation for the labor creditor’s rights is valid before the bankruptcy. In the procedural aspect, it refers to the labor creditor’s rights without need to file creditor’s rights and votes on the draft of the reorganization plan by the labor creditor’s rights as an independent creditor’s rights group.Secondly, analysis for the priority order of bankruptcy labor creditor’s rights and the real right of security1 justified the priority protection of the bankruptcy labor creditor’s rights and the degree of the protection, and from the perspective of equity, the relationship between the two was coordinated, thus achieving the coexistence of legal systems and avoiding the vacancy of the system’s function. According to the traditional theory of civil law, the real right of security is endowed with priority of effects in guaranteeing the realization of the bankruptcy labor creditor’s right. However, in the whole civil law system, priority effects of the real right of security is not absolute, it will be confined by the justice of the law and the protection of human rights. In the bankruptcy procedure, if the debtor still insist on priority effects of real right of security when all of his properties are unable to liquidate the debt, thus it is inevitable that the basic human rights like survival rights of related workers can not be guaranteed, and the worker’s “dignity” cannot be maintained, thereby social stability problems aroused. Therefore, when conducting Legislative Coordination of the labor creditor’s rights and the real right of security, it is necessary to take into consideration that the amount and deadline of qualified labor creditor’s rights priority or restrict the real right of security according to the ratio compensation for specific property priority areas, thus to achieve the balance of interests between the two sides.Finally, it’s about the improvement of the institution of our nation from the perspective of the virtual mechanism in priority protection of labor creditor’s rights. Studies from this part are practical localization researches, which based on the theoretical study beforehand and the study of China’s national conditions, thus the study is in a nature of reality. The nation is a political community and a collection of people, therefore government bears the responsibility for the welfare of the people. Labor is the basic requirement of people, and the labor relationship is concerned with the social public interest, so the government should maintain the public interests and public power should be interfered in labor relations. The State ought to regulate the labor relations through legal means, protect the interests of the workers, and ensure favorable allocation of the bankruptcy labor creditor’s right. With the development of today’s society, people has increasingly improved the degree of socialization, the socialization of interests and social responsibility attribute to the gradually buildup of a social sharing mode of interests and loss sharing, labor relations should be adjusted in a broader social background, makes its way into the social factors, thus workers can share the benefits of social development, the society shall share workers’ labor creditor’s rights. Therefore, we should establish the social security system that offer priority protection on the bankruptcy labor creditor’s rights. However, when our nation didn’t establish the social security system of the bankruptcy labor creditor’s rights, favorable allocation of legal rights by the bankruptcy law was an important way to solve it. Bankruptcy Law is a basic law for countries to regulate market order, the social thought should integrate into it, and then established the social-oriented principle of the bankruptcy law; further, exert the functions of Bankruptcy Law in protecting protect labor creditor’s rights for the nation through prior protection of the bankruptcy of the labor creditor’s rights. In consideration of China’s national conditions and the actual needs, the protection of labor rights in the bankruptcy law still need to be improved; the labor creditor’s qualification as the program subject and the creditor’s rights declaration rights should be specific; the liability of directors, supervisors, and senior managers to labor creditor’s rights should be established; the specific rules that the labor creditor’s rights is preferential to other exemption rights should be set and the authority that the bankruptcy administrators prioritize to deal with the bankruptcy labor creditor’s rights in accordance with legal procedures shall be regulated.