What should I do when my employer files for bankruptcy?

It’s 8:00 am on Monday morning and you arrive at work ready to start the week, only to find that all staff have been summoned immediately to an emergency meeting in the staff room. Amid whispers of what could possibly be going on, you head into the meeting where you are advised by a Licensed Insolvency Trustee (the “Trustee”) that the company you work for has been placed into bankruptcy and the job you love has been terminated, effective immediately.

A million questions are running through your head, but the most burning questions you have for the Trustee are:

What about the wages and vacation pay I am owed and what about severance pay?

You may be eligible to receive a payment in respect of your unpaid wages from a program called the Wage Earner Protection Program (WEPP), created by the Wage Earner Protection Program Act, which came into force effective July 7, 2008. The WEPP is designed to provide for the payment of outstanding wages, capped at a specified amount, to individuals whose employment has been terminated as a result of the bankruptcy or receivership of their employer. Wages includes salary, commissions, compensation for services rendered and vacation pay incurred any time in the six month period immediately preceding the date of the bankruptcy or receivership, as well as severance and / or termination pay.

How do I make a claim for a WEPP payment?

In order to be considered to receive payment from the WEPP, an application to the program by you is required. The following outlines the process:

The Trustee handling the administration of your employer’s bankruptcy is responsible for registering the bankruptcy of your employer with WEPP.
The Trustee is also responsible for determining, from the company records, the amount of eligible amounts owing to you.
The Trustee will provide you with instructions regarding the requirements and timing for making your application to the WEPP, which is a two-step process as follows:
The Trustee will provide you with a form, called a Proof of Claim, which you must complete and return to the Trustee in order to then be eligible to make your online application to the WEPP; and
Once the Proof of Claim form is received from you, the Trustee will register your information into the WEPP online system, and will confirm that you should now make your application directly to the WEPP.
Remember that it is important to follow the instructions given to you by the Trustee carefully in order to ensure that you receive any payments from the program that you may be entitled to.

Further information regarding the WEPP may be found on the Government of Canada website. Laura Ryback is a Licenced Insolvency Trustee in Winnipeg. To learn more about how MNP Debt can help you, contact any of our local offices at:

Winnipeg (Polo Park) – Resident Office
1661 Portage Avenue, Suite 301,
Winnipeg, MB, R3J 3T7
T: 204.336.6167
F: 204.772.9687

Winnipeg
201 Portage Ave., Suite 2500,
Winnipeg, MB, R3B 3K6
T: 204.336.6167
F: 204.772.9687

Winnipeg (South)
140 Meadowood Drive, Unit 5A,
Winnipeg, MB, R2M 5L8
T: 204.336.6167
F: 204.772.9687