Employee Resources

If your employer has become involved in insolvency proceedings, this section should answer the most common questions.

Bankruptcy

When your employer filed an assignment in bankruptcy or when a bankruptcy order was granted by the Court, your employment was automatically terminated.

The Trustee in Bankruptcy is responsible for preparing your Record of Employment (ROE) and will advise you about the bankruptcy and when and how the ROE will be made available.  The Trustee in Bankruptcy will also prepare your T4 tax slip for the year when the company became bankrupt.  These will be sent out to the address the company has for you in February of the following year to ensure you get it before you need to submit your tax return.

Should your address change at any point prior to receiving your T4, please contact the Trustee to ensure that your address is updated so that you receive your T4 as expected.

A Notice of Bankruptcy and First Meeting of Creditors will be mailed to you within 10 days of the bankruptcy.  Enclosed with the notice is a Proof of Claim form, wherein you prove your claim against the bankrupt company.  This should include any wages, salaries, vacation pay, travelling expenses, other expenses, termination (if entitled) and severance pay (if entitled) owed to you by the company at the date of bankruptcy.

An amount of $3,323 may be a priority claim that is paid by Service Canada if earned during the prior six months and if you weren’t related to the company or in a position of control.  Following this payment, claims of an employee claim are generally ranked as unsecured claims without a right to priority.

Please see our completing proofs of claim section under resources for further information on completing the Proof of Claim form properly and a summary of any priorities you may be entitled to.

Receivership

When a secured lender appoints a Receiver, the Receiver will advise employees what will happen with their employment.  The Receiver may continue to employ you or may terminate the employment.

Wage Earner Protection Program

The Wage Earner Protection Program was designed to assure monies are paid to employees and that the monies are paid sooner in a bankruptcy or receivership.  Employees who have earned wages/vacation pay/termination/severence/expenses during the six months prior to bankruptcy may be entitled to a payment of up to $3,323 less 6.82% from Service Canada.  More information on WEPPA is available here.