Bankruptcies and employment law: Employment lawyer Chantel Goldsmith with Law Times

Interview Summary

The past few months have seen increased filed bankruptcies by major companies nationwide. Many individuals have questioned under these circumstances if they are owed anything as they are now unemployed. Can employees pursue any entitlements if their former employer has filed for bankruptcy?

Chantel Goldsmith, a Toronto employment lawyer and Partner at Samfiru Tumarkin LLP joined the Law Times with Aidan McNab to discuss the rise in insolvencies and the impact on employee rights.

Interview Notes

• A huge issue for employees: Goldsmith explained that insolvencies ensure employees are paid last, if at all as they are considered unsecured creditors. “They have to fall in line with all the rest of them. If there’s something left for them at the end of the day, there is. But if not, then they’re not entitled to anything further.”
• Wage Earner’s Protection program: While employees who have been impacted by a filed bankruptcy could access the Wage Earner’s Protection Program, Goldsmith stated it is not a long-term solution. “It is good for short-term employees because they can recover unpaid wages, vacation pay, and severance. But for long-term employees, the amount they can access under the program is “just a fraction” of what they would be entitled to under common law.”
• SEARS bankruptcy: During the SEARS bankruptcy in 2017, Samfiru Tumarkin advocated legislation to classify employees as secure creditors, but the bill did not become law. “We were trying to champion that because we’re seeing this happen a lot where companies are going under, and I think we’re going to see it more and more in the next few years,” said Goldsmith.
• Restructuring under the CCAA: Goldsmith went on to explain that employees attempting to pursue legal action for a reduction in salary or benefits could face additional disadvantages. “In a restructuring, while the employee may then be able to argue that they are being constructively dismissed, it will be difficult to proceed against the company if they are already under creditor protection.”

Related Resources

For further insights and discussions related to wrongful dismissals, explore the following resources:

• Wrongful dismissal in Ontario