Bill C-12 addresses bankruptcy concerns
Employee wages and benefits will be better protected if an employer declares bankruptcy, thanks to the approval of Bill C-12, an act to amend the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrange-ment Act, the Wage Earner Protection Program Act and Statutes of Canada.
The changes were necessary to correct deficiencies in the insolvency reform legislation passed two years ago, said the federal government.
Canadian workers will “get paid what’s owed to them in a timely manner, and that is the protection they deserve,” said Jean-Pierre Black-burn, minister of labour and minister of the economic development agency of Canada for the regions of Quebec.
The legislation protects workers when employers go bankrupt or are subject to a receivership. It provides for the payment of unpaid wages and vacation pay up to an amount equal-ling four weeks’ maximum insurable earnings under the Employment Insurance Act (about $3,000).
In addition, pension contributions collected by a company but not yet remitted to a pension plan would be returned to workers and have priority status over secured creditors.
This “victory marks the end of a long and determined campaign... 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 the Canada Labour Congress.