Workers finally have new law
to protect
their wages in bankruptcy cases
Canadian
Labour Congress
OTTAWA – Canadian workers have
finally won new legal protection for their wages and
their pension contributions when their employer goes
bankrupt.
Bill C-12, a series of amendments to existing insolvency
and wage protection laws, was approved by the Senate
last night and received Royal Assent today. This was
accomplished after an intensive three-year campaign
by the Canadian Labour Congress and its affiliated
unions to change bankruptcy laws that unfairly put
workers last in line to get paid.
Working men and women lost an average of $50 million
a year in unpaid wages when companies went bankrupt
while waiting for two years to receive only 15 cents
on the dollar.
“Finally, workers no longer have to fear the
prospect of lost earnings owed to them while dealing
with the blow of the loss of their jobs. It took three
years of hard work to convince parliamentarians to
put individual working Canadians ahead of banks and
other financial institutions” says Ken Georgetti,
President of the Canadian Labour Congress.
Yesterday’s 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 their pension savings because banks and
other creditors were given priority. The Act also
provides for protection of unpaid pension contributions.
The Act also protects workers' collective agreements
from unilateral changes by bankruptcy judges. In far
too many cases in the past, judges have significantly
reduced wages, benefits and other provisions in collective
agreements. With this new legislation, changes can
only be made with the agreement of the union, an important
protection.
“Canadians have been waiting a long time for
these protection measures. It is not just unionized
workers that will benefit but every working woman and
man in Canada – whether they are in a union or
not – that will have this protection as soon
as the government proclaims the Act,” says Georgetti.
The Canadian
Labour Congress, the national voice of
the labour movement, represents 3.2 million Canadian
workers. The CLC brings together Canada’s national
and international unions along with the provincial
and territorial federations of labour and 136 district
labour councils.