Wage Earner Protection Program Act (S.C. 2005, c. 47, s. 1)

Short Title

Marginal note:Short title

1 This Act may be cited as the Wage Earner Protection Program Act.

Interpretation

Marginal note:Definitions

• 2 (1) The following definitions apply in this Act.

  Board

  Board means the Canada Industrial Relations Board established by section 9 of the Canada Labour Code. (Conseil)

  eligible wages

  eligible wages means

  • (a) wages other than termination pay and severance pay that were earned during the longer of the following periods:

    • (i) the six-month period ending on the date of the bankruptcy or the first day on which there was a receiver in relation to the former employer,

    • (ii) the period beginning on the day that is six months before one of the following days and ending on the date of the bankruptcy or the first day on which there was a receiver in relation to the former employer:

      • (A) the day on which a proposal is filed by or in respect of the employer under Division I of Part III of the Bankruptcy and Insolvency Act or, if a notice of intention to make a proposal is filed by or in respect of the employer under that Division, the day on which the notice of intention is filed,

      • (B) the day on which the most recent proceedings under the Companies’ Creditors Arrangement Act are commenced, and

    • (iii) the period beginning on the day that is six months before one of the following days and ending on the day on which a court makes a determination under subsection 5(5):

      • (A) the day on which a proposal is filed by or in respect of the employer under Division I of Part III of the Bankruptcy and Insolvency Act or, if a notice of intention to make a proposal is filed by or in respect of the employer under that Division, the day on which the notice of intention is filed,

      • (B) the day on which the most recent proceedings under the Companies’ Creditors Arrangement Act are commenced; and

  • (b) termination pay and severance pay that relate to employment that ended

    • (i) during the period referred to in paragraph (a), or

    • (ii) during the period beginning on the day after the day on which the period referred to in paragraph (a) ends and ending on the day on which the trustee is discharged or the receiver completes their duties, as the case may be. (salaire admissible)

  wages

  wages includes salaries, commissions, compensation for services rendered, vacation pay, termination pay, severance pay and any other amounts prescribed by regulation. (salaire)

• Marginal note:Precision

  (1.1) For the purpose of the definition eligible wages, a proposal does not include a proposal for which a certificate is given under section 65.3 of the Bankruptcy and Insolvency Act and a notice of intention to make a proposal does not include a notice of intention in respect of a proposal for which such a certificate is given.

• Marginal note:Meaning of trustee

  (1.2) In this Act, trustee includes a monitor as defined in subsection 2(1) of the Companies’ Creditors Arrangement Act.

• Marginal note:Employers subject to a receivership

  (2) For the purposes of this Act, an employer is subject to a receivership when any property of the employer is under the possession or control of a receiver.

• Marginal note:Meaning of receiver

  (3) In this Act, receiver means a receiver within the meaning of subsection 243(2) of the Bankruptcy and Insolvency Act.

• Marginal note:Words and expressions

  (4) Unless otherwise provided, words and expressions used in this Act have the same meaning as in the Bankruptcy and Insolvency Act.

• Marginal note:Related persons

  (5) Despite subsection 4(5) of the Bankruptcy and Insolvency Act,

  • (a) for the purposes of paragraph 6(d), an individual is considered to deal at arm’s length with a related person if the Minister is satisfied that, having regard to the circumstances — including the terms and conditions of the individual’s employment with the former employer, their remuneration and the duration, nature and importance of the work performed for the former employer — it is reasonable to conclude that the individual would have entered into a substantially similar contract of employment with the former employer if they had been dealing with each other at arm’s length; and

  • (b) for the purposes of subsection 21(4), individuals who are related to each other are, in the absence of evidence to the contrary, deemed not to deal with each other at arm’s length while so related.

Designation of Minister

Marginal note:Power of Governor in Council

3 The Governor in Council may designate a member of the Queen’s Privy Council for Canada to be the Minister for the purposes of this Act.

Program Established

Marginal note:Establishment

4 The Wage Earner Protection Program is established to provide for payments to individuals in respect of wages owed to them by employers who are insolvent.

Eligibility for Payments

Marginal note:Conditions of eligibility

• 5 (1) An individual is eligible to receive a payment if

  • (a) the individual’s employment ended for a reason prescribed by regulation;

  • (b) one of the following applies:

    • (i) the former employer is bankrupt,

    • (ii) the former employer is subject to a receivership,

    • (iii) the former employer is the subject of a foreign proceeding that is recognized by a court under subsection 270(1) of the Bankruptcy and Insolvency Act and

      • (A) the court determines under subsection (2) that the foreign proceeding meets the criteria prescribed by regulation, and

      • (B) a trustee is appointed, or

    • (iv) the former employer is the subject of proceedings under Division I of Part III of the Bankruptcy and Insolvency Act or under the Companies’ Creditors Arrangement Act and a court determines under subsection (5) that the criteria prescribed by regulation are met; and

  • (c) the individual is owed eligible wages by the former employer.

  • (d) [Repealed, 2009, c. 2, s. 343]

• Marginal note:Prescribed criteria — foreign proceeding

  (2) On application by any person, a court may, in a proceeding under Part XIII of the Bankruptcy and Insolvency Act, determine that the foreign proceeding meets the criteria prescribed by regulation. If the court determines that the foreign proceeding meets the prescribed criteria, the court may appoint a trustee for the purposes of this Act.

• Marginal note:Employment in Canada

  (3) An individual who is eligible to receive a payment because of subparagraph (1)(b)(iii) is only eligible to receive a payment in respect of eligible wages earned for employment in Canada and termination pay and severance pay that relate to that employment.

• Marginal note:Deemed bankruptcy

  (4) For the purposes of this Act, if all of the conditions set out in subparagraph (1)(b)(iii) are met, the former employer is deemed to be bankrupt and the date of the bankruptcy is deemed to be the day on which all of those conditions are met.

• Marginal note:Prescribed criteria — other proceedings

  (5) On application by any person, a court may, in proceedings under Division I of Part III of the Bankruptcy and Insolvency Act or under the Companies’ Creditors Arrangement Act, determine that the former employer meets the criteria prescribed by regulation.

Marginal note:Exceptions

6 An individual is not eligible to receive a payment in respect of any wages earned during, or that otherwise relate to, a period in which the individual

• (a) was an officer or director of the former employer;

• (b) had a controlling interest within the meaning of the regulations in the business of the former employer;

• (c) occupied a managerial position within the meaning of the regulations with the former employer; or

• (d) was not dealing at arm’s length with

  • (i) an officer or director of the former employer,

  • (ii) a person who had a controlling interest within the meaning of the regulations in the business of the former employer, or

  • (iii) an individual who occupied a managerial position within the meaning of the regulations with the former employer.

Amounts Covered by Program

Marginal note:Amount of payment

• 7 (1) The amount that may be paid under this Act to an individual is the amount of eligible wages owing to the individual up to a maximum of an amount equal to seven times the maximum weekly insurable earnings under the Employment Insurance Act.

• Marginal note:Reduction

  (1.1) Except in the circumstances prescribed by regulation, the amount that may be paid under this Act to an individual is to be reduced by any amounts provided for by regulation.

• Marginal note:Greatest amount

  (2) If more than one situation that is described in paragraph 5(1)(b) applies to the former employer, the amount that may be paid is the greatest of the amounts determined in respect of each of those situations.

Application for Payment

Marginal note:Application

8 To receive a payment, an individual is to apply to the Minister in the manner and during the period provided for in the regulations.

Marginal note:Minister’s determination of eligibility

9 If the Minister determines that the applicant is eligible to receive a payment, the Minister shall make the payment.

Marginal note:Notification

• 10 (1) The Minister is to inform the applicant of their eligibility or ineligibility to receive a payment.

• Marginal note:Notification to trustee or receiver

  (2) The Minister is to inform the trustee or receiver of the applicant’s eligibility or ineligibility to receive a payment.