June 5, 2003 (37th Parliament, 2nd Session)


Pierre Paquette

Bloc Québécois

Mr. Pierre Paquette (Joliette, BQ)

Mr. Speaker, first, I would like to congratulate the hon. member for Churchill for her initiative. I believe her motion is not only a step toward correcting an unfair situation—and I think she proved that well—for workers, but is full of common sense.
I shall read the motion, because I think it is important that everyone keeps it in mind for the rest of the debate.

That, in the opinion of this House, the government should amend bankruptcy legislation to ensure that wages and pensions owed to employees are the first debts repaid when a bankruptcy occurs.

As the hon. member for Churchill has already said, workers are the first victims in a bankruptcy. As a general rule, when there is a bankruptcy, decisions have been made by the administrators and owners of the companies, and they also pay the price, but on the basis of their own responsibility. The workers, however, usually do not have much control over the way their work is organized, or the way the company is organized, and find themselves paying for all the damage.
As things stand now with the Bankruptcy and Insolvency Act, I recognize some of the same spirit as in the Employment Insurance Act. Under that act, the two-week waiting period somehow implies that the victims of temporary or permanent layoffs have created their own situation. Thus, it has been decided that part of the cost of a layoff should be paid by the victims, the workers.
We find the same spirit in the bankruptcy act, which provides that the workers—the employees—find themselves very far down the list of creditors when the assets are sold.
The hon. member for Churchill mentioned that, but I think it is worth repeating. We know that the first ones in line to be paid are the governments, for such amounts owing as income tax, benefit premiums and other taxes.
The second group would be the secured creditors, in particular, the major banks. At this time, with the record profits that some of them have been making, they are not really to be pitied.
There is a third group of creditors called preferred creditors. This group of creditors includes employees, is only ranked fourth and has a preferred claim that is limited to $2,000.
What historically was to be legislation protecting creditors, particularly small creditors and employees, is now completely changed and devoid of its original intent.
With regard to case law, it is extremely important to see how this legislation, which is unfair, has a domino effect on other legislation, particularly provincial laws, in Quebec, for instance.
I will give an example that took place just two weeks ago. In recent years, case law has taken a direction that has little to do with the historical objective I mentioned earlier of protecting creditors, particularly small creditors and employees.
For employees, especially, three or four years ago there was a decision handed down, known as Barrette v. Crabtree Estate, in which the Supreme Court ruled that it was not possible to consider notice of dismissal as a debt since no services were performed for the corporation. Since then, various courts have given restrictive interpretations, particularly in Quebec.
As I was saying, based on this restrictive interpretation that wages must be in compensation for services rendered, but that everything else—such as benefits—is not considered wages by the Supreme Court, the court ruled that it was not a debt because it does not flow from services performed for the corporation.
So case law in this instance only adds to the problems with the Bankruptcy and Insolvency Act. I think that the motion moved by the member for Churchill is a step in the right direction, even though I think we need to make some clarifications in future debate. A motion is an opinion given by the House to the government.
I hope that this motion is adopted. There needs to be debate on this, particularly the notion of what constitutes wages. As I was saying, three or four years ago, the Supreme Court's ruling contained a very restrictive interpretation of what constitutes wages. Wages are remuneration paid for services performed.
Quebec's Court of Appeal gave similar rulings in 1998 and 1999, which means that now, in the context of case law, the real issue is not wages, but services performed.
This restrictive interpretation is found in a judgment that just came down by Quebec's Court of Appeal on May 5, in a case between the Syndicat des travailleurs et des travailleuses du restaurant Le Deauville, affiliated with the CSN, v. the owner. You will recall that I was the general secretary of the CSN for eight years, so I still feel close to this labour federation.
The Appeal Court decision upholds the restrictive interpretation of wages, based on the Supreme Court decision. Naturally, the union had its case dismissed. I will go into more detail. The parliamentary secretary was completely right, this is not a partisan issue. However, in my view, the case law aspect should be added to the current debate on Motion M-400 put forward by the member for Churchill.
The Appeal Court ruled in favour of the owner, the administrators against the union. I can assure members that the CSN will appeal the decision.
We know—this was mentioned by all the stakeholders—that wage earners are preferred creditors, but only up to $2,000. To get more than $2,000, one has to file suit against the administrators under the Companies Act, which is an area of Quebec jurisdiction.
The wage earners from Le Deauville restaurant decided to go to court to recover amounts of just over $79,000 representing statutory holidays, sick leave, group insurance premiums, union dues and compensation benefits in lieu of notice. We are talking about a very significant amount of money.
The owner of the restaurant had had difficulties. Over the years, he had failed to pay the insurance policy, as provided for in the collective agreements, and which is a wage issue. As a result, the policy was cancelled in August 1998. There had been no paid sick leave since 1997. This was money owed the wage earners that had never been paid to them.
The question the union asked with a view to recovering all this money was what exactly a wage is. We are confronted to two different notions of wage. That is why I think that Motion M-400 by the hon. member for Churchill opens a debate which should extend to this whole issue. Finally, is wage compensation, in legal tender and benefits having a monetary value, for the work or services of a wage earner or is it, as ruled by the Supreme Court, simply compensation for services rendered.
It seems to me that, when wages are negotiated in a collective agreement, wage is not only the hourly wage paid, but all financial benefits. In fact, employers remind us of that on a regular basis.
It seems to me therefore that the concept of wages must be clarified and that it must encompass all financial benefits. What is of interest in the court decision is that the appeal court states that, lacking any additional legislative guidelines, provision of services by the employee represents the cornerstone of directors' personal responsibility for company debts.
The Quebec court of appeal is therefore calling upon lawmakers, which include elected members of Parliament, to clarify a number of concepts that have evolved over time. It seems to me that Motion M-400 ought to comprise the point made by the hon. member for Churchill relating to making workers secured creditors, but that another concept needs to be added: that wages must include all financial benefits derived from work. It is extremely important, therefore, that we work around that concept.
If Parliament wants to work seriously, Motion M-400 must be adopted, because it will force us into some extremely complex debates. I am aware of that, but they are also unavoidable. This must be done if we really have the interests of the Canadian and Quebec population at heart, since, as we all know, most of them work for private companies that are liable to go bankrupt and these workers unfortunately very often end up deprived of their rights.
To that end, therefore, that is to trigger a debate on all these concepts relating to the Bankruptcy and Insolvency Act, we are going to support Motion No. 400 without reservation. Unlike the Alliance members, despite this being a free vote, all members of the Bloc Quebecois are going to vote in support of the motion by the member for Churchill.

Topic:   Private Members' Business
Subtopic:   Bankruptcy Legislation
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