Can Employees Petition for Bankruptcy Proceedings When Wages Are Paid Late?

Yes. Employees have the right to file a petition for the opening of bankruptcy proceedings when the employer is late in paying wages, under Article 5 of the Law on Recovery and Bankruptcy No. 142/2025/QH15 (effective from 01/03/2026, replacing the Law on Bankruptcy 2014).

1. Conditions for employees to file a petition for the opening of bankruptcy proceedings

Under Article 5 of the Law on Recovery and Bankruptcy 2025, employees, grassroots trade unions, and immediate superior trade unions (where no grassroots trade union has been established) have the right to file a petition for the opening of bankruptcy proceedings when:

• The 03-month time limit has expired from the date on which the obligation to pay wages and other debts due to employees arose;
• The enterprise or cooperative fails to perform its payment obligations.

Thus, late payment of wages alone is not enough; the 03-month period from the wage payment due date must have expired without the enterprise making payment before the employee’s right to file a petition arises.

2. Distinguishing from a wage claim lawsuit

Employees who are paid late may choose to:

• Initiate a labor dispute lawsuit at the Court to claim wages (without waiting for the 03-month period);
• File a petition for the opening of bankruptcy proceedings when the 03-month condition is met and there are grounds that the enterprise is insolvent.

Bankruptcy proceedings are collective proceedings for handling all of the enterprise’s debt obligations, in which employees’ interests are prioritized for payment in the order prescribed by the Law.

3. Dossier for the petition

A petition for the opening of bankruptcy proceedings must clearly state the employee’s information, the enterprise’s information, the grounds of wage arrears exceeding 03 months, together with the labor contract, payroll records, documents demanding wage payment, and evidence proving the enterprise’s failure to pay. The petition is filed at the competent People’s Court.

Notes on application

The Law on Bankruptcy 2014 ceased to be effective on 01/03/2026. The conditions and procedures now apply under the Law on Recovery and Bankruptcy 2025; employees need to prepare sufficient evidence of the wage arrears and the payment due dates.

Common risks to note

• Filing a petition before the 03-month time limit has expired;
• Lacking evidence proving the labor relationship and the wage arrears;
• Confusing bankruptcy proceedings with an individual labor dispute.

How can ANT Legal help?

ANT Legal assists employees and trade unions in assessing the grounds, preparing dossiers, and protecting their interests in bankruptcy proceedings. For advice, please contact an ANT Legal lawyer.

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