Bill C-12 gets royal assent

Workers better protected with employer bankruptcy

The wages, pensions or benefits of workers will be protected if their employer declares bankruptcy, thanks to the approval of Bill C-12, a series of amendments to existing insolvency and wage-protection laws.

The changes were necessary to correct deficiencies in the insolvency reform legislation passed two years ago, said the government.

The legislation also includes the creation of the Wage Earner Protection Program, which protects workers when employers become bankrupt or are subject to a receivership. It provides for the payment of unpaid wages and earned vacation pay of up to an amount equalling four weeks’ maximum insurable earnings under the Employment Insurance Act (or about $3,000).

This “victory marks the end of a long and determined campaign by the labour movement to change bankruptcy laws which too often saw employees suffer the loss of wages, benefits and even pension savings because banks and other creditors were given priority,” said a release from the Canada Labour Congress.

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