ENGLISH

- Wages, accident compensations, and other claims arising from labor relations shall be paid in preference to taxes, public charges, or other claims except for claims secured by pledges, mortgages, or the security rights under the 「Act on Security over Movable Property And Claims」 on the whole property of the employer concerned. (Main text of Article 38(1), 「Labor Standards Act」)

- Provided, that this shall not apply to taxes and public charges which take precedence over the said pledges, mortgages, or the security rights under the 「Act on Security over Movable Property and Claims」. (Proviso to Article 38(1), 「Labor Standards Act」)

- Notwithstanding above, any of the following claims shall be paid in preference to any claims secured by pledges, mortgages, or the security rights under the 「Act on Security over Movable Property and Claims」 on the whole property of the employer, taxes, public charges, and other claims. (Article 38(2), 「Labor Standards Act」)

- Retirement benefits, etc. For the final 3 years of service (retirement benefits, defined benefit retirement pension plans, etc. under Article 12(1), 「Act on the Guarantee of Employees’ Retirement Benefits」) shall be paid in preference to claims secured by pledges or mortgages, or to taxes, public charges, and other claims on the whole property of an employer. (Article 12(2), 「Act on the Guarantee of Employees’ Retirement Benefits」)

-Any creditor, who has an executory exemplification, who has effected a provisional seizure subsequent to the registration of a ruling to commence the auction, or who has the right to claim a preferential reimbursement under the 「Civil Act」, the 「Commercial Act」 and other acts, may demand a distribution. (Article 88(1), 「Civil Execution Act」)