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Canadian Law of Work Forum (CLWF)
Law of Work Archive

Plant Closing, Bankruptcies, and Workers' Claims

by David Doorey July 8, 2008
written by David Doorey July 8, 2008

There is a story in the Star today about another plant closing, this one at Progressive Moulded Products in Vaughan. The workers have set up a picket line and are blocking entry into the plant. Interestingly, these workers are non-union, and since this is an auto-parts company, I assume that the Canadian Auto Workers has tried and failed to organize the workers in the past (this is a guess on my part). However, the CAW is now providing assistance and advice to the workers. The Court has already made an order for the blockade to be removed–remember our earlier discussion involving GM, where we explained that picketers can protest, but in doing so, cannot physically obstruct entry into a premises. The workers appear to be defying the order, which could cause the police to start arresting people.
Besides being angry about losing their jobs, the workers are really pissed about the fact that they will probably lose their notice and severance pay entitlements under the Employment Standards Act. That is because the employer has filed for bankruptcy, and employees’ entitlements rank relatively low down the pecking order of creditors in our bankruptcy system. In most cases, there is little left for the workers once the secured creditors and higher ranking preferred creditors are paid out. A good summary of the rankings system and of the policy issues relating to where workers’ entitlements should fit into it is available in this report.
Unpaid wages have some protection. The Federal government introduced the Wage Earner Protection Program in 2007, a scheme which protects workers’ wages in the case of the bankruptcy of their employer, but only up to 4 weeks’ of maximum insurable earnings under the Employment Insurance Act, which is about $3000, and not including unpaid benefits such as severance or notice pay.
Unions have been lobbying for years for workers’ wages and other entitlements (liek vacation pay, severance pay) to placed at or near the top of the creditor pecking order. For example, see this submission by the USWA-Canada.
Where do you think workers entitlements should rank among creditors?

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David Doorey

Professor Doorey is an Associate Professor of Work Law and Industrial Relations at York University. He is the Director of the School of HRM at York and Director of Osgoode Hall Law School’s executive LLM Program in Labour and Employment Law and on the Advisory Board of the Osgoode Certificate program in Labour Law. He is a Senior Research Associate at Harvard Law School’s Labor and Worklife Program and a member of the International Advisory Committee on Harvard University’s Clean Slate Project, which is re-imaging labor law for the 21st century

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@SCLSclinic and I were so fortunate to represent this client last year. I am thrilled that this decision brings more clarity for family status accommodations rights amidst a pandemic that has tested parents, caregivers, and families like never before. https://twitter.com/CanLawWorkForum/status/1364605259071561730

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TheLawofWorkDavid J. Doorey@TheLawofWork·
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Here's my latest in @jacobinmag.

If Ontario's labor laws applied in Alabama, the Amazon vote would have been held months ago so workers could get back to their jobs. Instead, the NLRA permits Amazon to conduct a months' long onslaught of anti-union propaganda. https://twitter.com/jacobinmag/status/1364613560425275392

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Amazon workers in Alabama are voting on whether to unionize, but the company is bombarding them with anti-union propaganda. In Canada, by contrast, votes are held quickly, making it harder for companies to stack the deck — a model that can work in the US. http://jacobinmag.com/2021/02/amazon-alabama-canada-labor-law-union-vote

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CanLawWorkForumCLWF@CanLawWorkForum·
24 Feb

New from @RSandill (counsel for applicant), discussing important new "family status" discrimination decision from OHRT:

"Kovintharajah v. Paragon Linen & Laundry: When Failure to Accommodate Child Care Needs is “Family Status” Discrimination"

https://lawofwork.ca/13360-2/

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