Protecting Wage Earners During Corporate Bankruptcies
Bill C-55, a comprehensive insolvency reform package to modernize the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act (CCAA) was introduced on June 3 by the federal government.
The bill will also create the legislative framework for the Wage Earner Protection Program which had been previously announced on May 5, 2005.
The goals of the legislative package, according to the federal background document, include encouraging restructuring as an alternative to bankruptcy for viable companies; protecting workers' claims for unpaid wages and vacation pay; and making the bankruptcy system fairer.
The Wage Earner Protection Program would guarantee the payment of up to $3,000 in wages owed to workers whose employers go bankrupt or into receivership. Wages would also have a priority higher than secured creditors.
Reaction from the labour movement to the proposed legislative changes has been positive.
Reaction has also been positive, though more guarded, from industry associations, who are pleased by other aspects of the Bill. For example, the Canadian Association of Insolvency and Restructuring Professionals finds the treatment of student-loan debts in personal bankruptcy proceedings to be too timid. And the Real Property Association of Canada is happy that the booming income trust industry will have access to the same insolvency protection as corporations under the changes.
The bill will also create the legislative framework for the Wage Earner Protection Program which had been previously announced on May 5, 2005.
The goals of the legislative package, according to the federal background document, include encouraging restructuring as an alternative to bankruptcy for viable companies; protecting workers' claims for unpaid wages and vacation pay; and making the bankruptcy system fairer.
The Wage Earner Protection Program would guarantee the payment of up to $3,000 in wages owed to workers whose employers go bankrupt or into receivership. Wages would also have a priority higher than secured creditors.
Reaction from the labour movement to the proposed legislative changes has been positive.
Reaction has also been positive, though more guarded, from industry associations, who are pleased by other aspects of the Bill. For example, the Canadian Association of Insolvency and Restructuring Professionals finds the treatment of student-loan debts in personal bankruptcy proceedings to be too timid. And the Real Property Association of Canada is happy that the booming income trust industry will have access to the same insolvency protection as corporations under the changes.
Labels: government of Canada, legislation
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