Suggestions for enhancing the Wage Earner Protection Program.
Employees often lose out when a company declares bankruptcy, ranking well behind other creditors when the company’s remaining assets are shared out.
The Wage Earner Protection Program is designed to help mitigate some of those problems. The CBA’s Labour and Employment Law Section recently commented on questions in a discussion paper issued by Employment and Social Development Canada looking at regulations to support legislative changes to the WEPP Act.
The Section’s recommendations include:
- That eligibility for the WEPP be triggered by restructuring steps under the Bankruptcy and Insolvency Act or the Companies’ Creditor Arrangement Act that result in a material impact on employees’ jobs.
- That the regulations include a safety valve mechanism that the business debtor can apply to suspend the WEPP if continuing with it would cause material hardship to the restructuring efforts, or delaying the WEPP would not cause undue prejudice to the employees.
- That legislation set out the criteria for WEPP eligibility in a business restructuring and allow access to the courts for any disputes about individual eligibility.
- That information for employees about the WEPP be written in plain language and posted on the existing website.
- That legislation require that priorities and rights of recognition be maintained as a condition of obtaining recognition of a foreign proceeding in order to mitigate the risk of subrogated claims asserted by a government entity being treated as subordinated claims in a foreign proceeding.
- That Canadian courts have jurisdiction to make an order that requires compliance with WEPP requirements in a foreign proceeding.
- That government pay the fees and expenses of trustees and receivers where non-payment would put employees’ access to the WEPP in jeopardy.