According to the provisions of the Labor Contract Law, the employer may lay off employees during bankruptcy reorganization, but it shall pay economic compensation to the workers. The economic compensation shall be paid according to the standard of one month's salary for each full year of the employee's working years in the unit. For more than six months but less than one year, it shall be counted as one year; If it is less than six months, economic compensation of half a month's salary shall be paid to the workers.
Legal objectivity:
Article 186 of the Company Law of People's Republic of China (PRC) * * * After clearing up the company's assets, preparing the balance sheet and list of assets, the liquidation group shall formulate a liquidation plan and report it to the shareholders' meeting, shareholders' meeting or people's court for confirmation. After paying the liquidation expenses, employees' wages, social insurance expenses and statutory compensation, paying the taxes owed and paying off the company's debts, the company's property shall be distributed according to the proportion of capital contribution of shareholders of a limited liability company and the proportion of shares of shareholders of a joint stock limited company. During the liquidation period, the company shall survive, but shall not carry out business activities unrelated to liquidation. The company's property shall not be distributed to shareholders before it is paid off in accordance with the provisions of the preceding paragraph. Article 2 of Accounting Standards for EnterprisesNo. 12-Debt Restructuring