How Can commercial Bankruptcy Help my Employees?

As an entrepreneur, you care about your employees’ well-being. Naturally, you’re aware that if your company goes bankrupt, you’ll deprive them of their jobs. However, there are several laws in place to protect employees who have lost their jobs following a commercial bankruptcy.

1. The Act respecting Labour Standards

The Act respecting Labour Standards regulates employment in Quebec. It protects employees in several ways, particularly following termination of employment. For more information, visit the CNESST website.

2. The Wage Earner Protection Program Act (WEPPA)

The Wage Earner Protection Program (WEPP), which is administered by the federal government, pays eligible wages owing to workers whose employer has filed for bankruptcy, for example.

Naturally, employees must meet certain conditions to be eligible for the WEPP.

In order to benefit from payments under this program, your employees must register on the Wage Earner Protection Program website and submit the duly completed and signed documents provided by the licensed insolvency trustee.

As an employer, it can therefore make sense to file for commercial bankruptcy so that your employees can receive the associated compensation rather than losing a significant amount of money. For employees to be eligible for compensation for employment termination, the company must file for bankruptcy within six months of unpaid wages becoming due or the layoff of employees (following the end of the business’ operations, for example). After this time, the employees may not be eligible for benefits.

In light of the current economic climate, this may be particularly relevant.

3. Emploi Québec’s Programme d’aide à la réorientation professionnelle

Commercial bankruptcy can be a challenging time for both entrepreneurs and their employees, but it can also present an opportunity for a fresh start. Emploi Québec offers a wide range of resources for employees who have lost their job and are jobseeking or interested in a career transition program. Indeed, a career change can lead to a higher salary, a more challenging role, a better work schedule and enhanced employee benefits.

For further information, visit the Guichet-Emplois website.

4. Business recovery following a bankruptcy

Following a bankruptcy, all of the company’s assets may be redeemed by a third party who wishes to relaunch the company’s activities. As a result, some of your former employees could find a new job.

Trustees are your greatest allies!

In all cases, bear in mind that our licensed insolvency trustees are the ideal partners to support you during a commercial bankruptcy process. Licensed insolvency trustees are the only professionals authorized to manage a bankruptcy process and liquidate a company’s assets. After reviewing your situation, they will propose solutions other than bankruptcy, such as a recovery plan, a voluntary liquidation or a proposal.

In a nutshell, if your business is having financial problems, contact one of our licensed insolvency trustees today. They will help you find solutions so you can look forward to a less stressful future.