Cred­i­tor pro­tec­tion means staff can­not file claim for sev­er­ance

The Hamilton Spectator - - BUSINESS - ED CAN­NING Ed Can­ning prac­tises labour and em­ploy­ment law with Ross & McBride LLP, in Hamil­ton, rep­re­sent­ing both em­ploy­ers and em­ploy­ees. You can email him at ecan­ning@rossm­cbride.com.

Q: I worked for a large em­ployer for 36 years. Two weeks ago I was told that my em­ploy­ment was over. I was given my out­stand­ing wages and va­ca­tion pay and noth­ing more. The com­pany is in cred­i­tor pro­tec­tion right now. Is there any­thing I can do to get a sev­er­ance pack­age?

A: There is very lit­tle you can do. The­o­ret­i­cally, your rights are be­ing sac­ri­ficed for the greater good. I am sure that is lit­tle con­so­la­tion for you and your fam­ily. Af­ter all those years, you are owed 34 weeks pay pur­suant to the Em­ploy­ment Stan­dards Act — even if you get a bet­ter­pay­ing job to­mor­row. Ad­di­tion­ally, you could get up to two years lost wages, which would in­clude that 34-week min­i­mum. Those would be your nor­mal en­ti­tle­ments if you could take this to court.

The prob­lem is, you are not al­lowed to take the mat­ter to court as any claim you had a lawyer is­sue would be im­me­di­ately thrown out — with cost con­se­quences against you. Un­til fur­ther no­tice, you and all the other ter­mi­nated em­ploy­ees are pro­hib­ited from bring­ing a claim through the nor­mal pro­cesses.

The rights of cred­i­tors and em­ploy­ees are be­ing com­pro­mised in var­i­ous ways by the cred­i­tor pro­tec­tion process in the hope that some vi­able en­tity will con­tinue on as a busi­ness. The thinking is that this is the greater good in the long run.

We’ll see. It is pos­si­ble that in the fu­ture you may be able to make a claim de­pend­ing on what the judge in charge de­cides.

Q: I em­ploy about 20 peo­ple in my small com­pany. Things are go­ing fairly well and as a re­sult, I have re­cently learned that five em­ploy­ees did not take all of their paid va­ca­tion for the past few years.

Per­haps I should have, but I did not know this was hap­pen­ing. I re­al­ize I have to pay out what they ac­cu­mu­lated, but how do I con­trol this in the fu­ture?

A: Im­me­di­ately adopt a pol­icy which states, “All em­ploy­ees must take two weeks off per year. Em­ploy­ees en­ti­tled to more than two weeks va­ca­tion per year may de­fer the ex­cess weeks for a max­i­mum of six months past the end of the year in which the va­ca­tion was to have been taken. If the ex­cess weeks have not been taken by the end of six months, they are no longer avail­able and va­ca­tion pay will not be paid for any weeks over the twoweek min­i­mum to which the em­ployee is en­ti­tled.”

You don’t have to pro­vide a six­month ex­ten­sion. Two weeks is the min­i­mum re­quired by the Em­ploy­ment Stan­dards Act.

Re­gard­less of whether an em­ployee has ac­cu­mu­lated enough va­ca­tion pay to cover the two weeks, it is up to you to re­quire them to take the two weeks off. But any­thing over the two-week min­i­mum re­quired by the Act could be spec­i­fied, at your dis­cre­tion, in any poli­cies you want to de­velop.

What you see above is a “use it or lose it” pol­icy. It is quite com­mon, es­pe­cially for smaller em­ploy­ers. Al­low­ing va­ca­tion pay to ac­cu­mu­late in­def­i­nitely can be hard on your cash flow, es­pe­cially if it is sud­denly cashed in by a ter­mi­nated or re­sign­ing em­ployee.

Q: For the third time in two years, one of the driv­ers in my em­ploy has been in a fender ben­der that was his fault. This is sig­nif­i­cantly af­fect­ing my in­sur­ance and de­ductibles. Can I deduct the in­creased costs from his pay­cheque?

A: No. Not even if he con­sents in writ­ing. Don’t even sug­gest it. Ac­ci­dents at work are con­sid­ered faulty work­man­ship and the Em­ploy­ment Stan­dards Act pro­hibits de­duct­ing for mis­takes of this kind in the course of em­ploy­ment.

If he wants to write you a cheque in the hope that it might save him from a ter­mi­na­tion, that is up to him. You may need to sit down and weigh the cost of keep­ing him on ver­sus the cost of ter­mi­nat­ing the re­la­tion­ship.

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