OTTAWA – Recommended changes to Canada's bankruptcy and insolvency legislation contained in the report released yesterday by the Senate Standing Committee on Banking, Trade and Commerce fail to protect workers says the Canadian Labour Congress.

"It is sad and discouraging how the Senate Committee gives money more importance than people," said Hassan Yussuff, secretary-treasurer of the Canadian Labour Congress. "Profit margins on bank loans should not be given priority over protecting workers' wages, pensions and other benefits."

The Canadian Labour Congress proposed a package of measures to the Committee to ensure the protection of workers' interests in a bankruptcy or insolvency. Specifically, the CLC takes exception to several of the Committee's recommendations:

• Wage protection – A proposed wage protection regime for employee wage and vacation pay claims does not go far enough as many bankruptcies will not have sufficient assets for payout. The $2,000 maximum or one pay period per employee claim is not adequate to cover wage arrears and outstanding vacation and severance amounts. The Canadian Labour Congress proposed super-priority status for workers' wages, vacation and severance payments, and a federally regulated, employer-funded wage protection fund.

• Pension protection – The Committee offered no recommendations to improve protection against under-funding of pensions in insolvencies. The Canadian Labour Congress proposed pension insurance or super-priority creditor status for overdue contributions from insolvent organizations.

• Legislation to permit cancelling or altering collective agreements and other executory contracts – The Committee recommends that bankruptcy and insolvency trustees, with Court approval, be able in certain circumstances, to alter collective agreements and other contracts as part of a restructuring. The Canadian Labour Congress maintains that neither the courts nor the trustee should have the power to vacate or amend a collective bargaining agreement. The CLC's position is that union should remain the bargaining agent during the insolvency process and that no changes are required to the existing legislation.

• Notification to workers – The Committee report did not address the Canadian Labour Congress' recommendation that employers be required to notify their employees' unions that it is in financial trouble, considering filing for bankruptcy or insolvency or that a court proceeding is scheduled. The CLC urged that legislation be amended to provide such notice so that employees can act to cushion the blow financially and the bargaining agent is better able to prepare legal representation.

"The Standing Committee has missed a rare opportunity to show leadership and support workers who are faced with significant risks when their employers declare bankruptcy," said Yussuff.

The Canadian Labour Congress, the national voice of the labour movement, represents 2.5 million Canadian workers. The CLC brings together Canada's national and international unions along with provincial and territorial federations of labour and 137 district labour councils. The CLC's presentation to the Standing Committee can be found at

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