CHAPTER II

PROVISIONS CONCERNING GUARANTEE INSTITUTIONS
Article 3
Member States shall take the measures necessary to ensure that guarantee institutions guarantee, subject to Article 4, payment of employees’ outstanding claims resulting from contracts of employment or employment relationships, including, where provided for by national law, severance pay on termination of employment relationships.
The claims taken over by the guarantee institution shall be the outstanding pay claims relating to a period prior to and/or, as applicable, after a given date determined by the Member States.
Article 4
1
Member States shall have the option to limit the liability of the guarantee institutions referred to in Article 3.
2
If Member States exercise the option referred to in paragraph 1, they shall specify the length of the period for which outstanding claims are to be met by the guarantee institution. However, this may not be shorter than a period covering the remuneration of the last three months of the employment relationship prior to and/or after the date referred to in the second paragraph of Article 3.
Member States may include this minimum period of three months in a reference period with a duration of not less than six months.
Member States having a reference period of not less than 18 months may limit the period for which outstanding claims are met by the guarantee institution to eight weeks. In this case, those periods which are most favourable to the employee shall be used for the calculation of the minimum period.
3
Member States may set ceilings on the payments made by the guarantee institution. These ceilings must not fall below a level which is socially compatible with the social objective of this Directive.
If Member States exercise this option, they shall inform the Commission of the methods used to set the ceiling.
Article 5
Member States shall lay down detailed rules for the organisation, financing and operation of the guarantee institutions, complying with the following principles in particular:
1. the assets of the institutions must be independent of the employers’ operating capital and be inaccessible to proceedings for insolvency;
2. employers must contribute to financing, unless it is fully covered by the public authorities;
3. the institutions’ liabilities must not depend on whether or not obligations to contribute to financing have been fulfilled.