Long Delayed Bankruptcy Protection Bill Passed

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, received Royal Assent on December 14. This was accomplished after an intensive three-year campaign by the Canadian Labour Congress (CLC) 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", said Ken Georgetti, CLC President. "It took three years of hard work to convince parliamentarians to put individual working Canadians ahead of banks and other financial institutions."

The 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.