Learn about AGS

Scope of application

Guaranteed claims

The sums must be due in performance of the employment contract. In particular, AGS guarantees:

Remuneration and ancillary benefits (bonuses, gratuities, etc.)
Compensation resulting from the termination of employment contracts (notice period, compensation for paid
Incentive and profit-sharing schemes
Ancillary support measures (job recognition costs, driving licence costs, removal and installation costs, etc.) resulting from employment protection plans (plans de sauvegarde de l’emploi – PSE)
Claims relating to the redundancy support agreement (contrat de sécurisation professionnelle – CSP) (employer’s contribution and cooling-off period)

Article L.3253-6 and seq. of the French Labour Code

Deux personnes en réunion, l’une portant des lunettes, échangeant autour d’une table.

The principle of subsidiarity

AGS can only be asked to intervene according to the principle of subsidiary.

The judicial representative must first ensure that no other scheme (legal, contractual, insurance-based, etc.) enables the company to cover the debts owed to employees (e.g. paid leave guarantee fund, temporary workers’ fund, part-time employment financed by the State and Unédic, etc.).

Secondly, recourse to the guarantee is subject to verification that there are no or insufficient funds available in the company to cover the amount of unpaid wage claims.

The conditions for applying the subsidiarity criterion are reinforced in the case of safeguard proceedings.

Limits of the guarantee

The AGS guarantee is limited by law, which sets a general ceiling for all claims advanced combined (all forms of remuneration, redundancy payments, compensation in lieu of notice and paid leave, incentive and profit-sharing schemes, damages, etc.), determined based on the employee’s length of service on the day and in the year of the opening judgment.

A comparative study of European wage guarantee funds confirms that the French guarantee scheme offers the most protection for employees in companies in difficulty.

France: one of the most protective wage guarantee schemes in Europe

European comparison of wage guarantee funds
COUNTRIES	Ceiling	Processing time	Nature of guaranteed claims
France	€96,120	1 to 5 days	Remuneration of all kind, redundancy pay, compensation in lieu of notice and paid leave, incentive and profit-sharing schemes, damages, measures to accompany employment protection plans
Spain	€33,882	3 months	Wages, redundancy pay, damages for unfair dismissal
Belgium	€30,500	8 to 10 months	Wages and paid leave, transitional indemnity, closure indemnity and business complement
Germany	€21,150	3 months	Wages
Italy	€3,599	2 months	Wages, redundancy pay (excluding compensation in lieu of notice and paid leave)

The ceilings set for the guarantee in 2025 are as follows

Less than 6 months*

Celling 4 : €62,800

From 6 months to 2 years*

Celling 5: €78,500

More than 2 years*

Celling 6: € 94,200

Legal references

Article L.3253-20 in the French Labour Code
Article L.3253-5 in the French Labour Code
Article L.3253-17 in the French Labour Code

* length of service of the employee on the day and in the year of the opening judgment

The role of the judicial representative

The role of the judicial representative is above all to defend the interests of the proceedings, in addition to verifying employee liabilities and drawing up the statement(s) of employee claims, subject to the application of the principle of subsidiarity, under the authority of the insolvency judge appointed when the opening judgment is handed down. If the insolvency proceedings are closed and the judicial representative’s mandate is terminated, the clerk of the commercial court is usually responsible for drawing up the statements of employee claims.

Articles L.3253-15 and L.3253-19 of the French Labour Code - Articles L.625-1 and R.625-1 of the French Commercial Code

Statue de la Justice en bronze tenant une balance, yeux bandés, sur fond neutre

Key points to remember

01

The principle of the guarantee

AGS guarantees sums due under the employment contract.

Implementation of the guarantee is independent of the company’s prospects for recovery and its assets.

However, the scope of the guarantee differs depending on the type and stage of the insolvency proceedings.

02

A guarantee adapted to insolvency proceedings

In the case of safeguard proceedings, the AGS guarantee is limited to severance pay for employees made redundant for economic reasons during the observation period or in the month following the adoption of a safeguard plan. The AGS guarantee also covers accompanying measures resulting from an employment protection plan determined by a majority collective agreement or a unilateral document validated or approved by the DREETS-DDETS.

In the event of judicial reorganisation or liquidation, it guarantees wages, bonuses and severance pay owed to the employee on the date of the opening judgment. It also covers severance pay for employees whose employment contracts are terminated after the opening of the insolvency proceedings, within the guarantee periods, at the initiative of the insolvency authorities.

In the event of reorganisation followed by liquidation, AGS will also guarantee the sums due during the observation period and during the 15 or 21 days following the judicial liquidation, up to a maximum amount corresponding to one and a half months’ work.

As part of employment protection plans, AGS can guarantee the accompanying measures in accordance with Article L. 3253-8-4 of the French Labour Code.

03

Coverage of Employment Protection Plans (EPP)

In accordance with the principle of subsidiarity, the AGS guarantee can only be used if there are no funds available within the company and no other legal, contractual or insurance arrangements to cover employee claims.

Coordination of the AGS Guarantee with Insolvency Proceedings Overview

portrait d'une femme en costume blanc sur fond graphique violet

Overview

The AGS guarantee applies differently depending on whether the company is in safeguard, receivership, or judicial liquidation proceedings. The diagrams below illustrate, step by step, when the guarantee intervenes and within what limits.

infographie-articulation-garantie-desktop-step1

infographie-articulation-garantee-dmobile-step1-schema1

In safeguard proceedings

Safeguard followed by a safeguard plan

Note: AGS does not guarantee employee claims arising prior to the opening judgment. Conversion to judicial reorganisation or liquidation does not have the same effects as an opening judgment.

infographie-articulation-guarantee-desktop-step2

infographie-articulation-guarantee-mobile-step1-schema2

Safeguard converted into judicial reorganisation followed by a continuation plan

infographie-articulation-guarantee-desktop-step3

infographie-articulation-guarantee-mobile-step1-schema3

Safeguard converted into judicial reorganisation followed by judicial liquidation

infographie-articulation-guarantee-desktop-step4

infographie-articulation-guarantee-mobile-step1-schema4

In judicial reorganisation proceedings

Judicial reorganisation followed by a continuation plan

Note: AGS does not guarantee wages due to employees during the observation period if the judicial reorganisation proceedings are followed by a continuation plan.Payment will only be made in the event of conversion to judicial liquidation, up to a maximum amount corresponding to one and a half months’ work in terms of amount and duration.

infographie-articulation-garantee-desktop-step5

infographie-articulation-garantee-mobile-step1-schema5

Judicial reorganisation followed by judicial liquidation

infographie-articulation-garantee-desktop-step6

infographie-articulation-garantee-mobile-step1-schema6

In judicial liquidation proceedings

Automatic judicial liquidation

The right reflexes: In order for the guarantee to apply, the redundancy must take place within 15 days of the decision to open the proceedings (or 21 days in the case of an employment protection plan). If the guarantee periods mentioned in L.3253-8-5 of the French Labour Code are not respected, AGS will not guarantee the employee’s wage claims.