John Rafferty

MP, Thunder Bay—Rainy River

From the House - Week of October 28 - November 4, 2011 - C-338 A Bill to Protect Severance and Termination Pay

October 28th, 2011 - 8:04pm

I think elected officials must look out for the interests for their constituents at all times, and that you don’t finish working until the job is done.  I’d like to think that these two beliefs have come together in a bill that I tabled this past week, Bill C-338 An Act to Amend the Bankruptcy Insolvency Act (termination and severance pay).

Throughout my time meeting constituents, campaigning, and working in Ottawa over the last few years several important issues have come to my attention, but few where more heart-wrenching than the plight of the former employees of Buchanan Forest Products.  Hundreds of workers, some of them working for the same company for decades, lost everything when that company went bankrupt - their jobs, their pensions in some cases, and even their severance and termination pay.  At the same time, the workers at the two AbitibiBowater mills in our riding were losing some of their pensions in that company’s most recent restructuring.  In my first term I committed to helping workers get access to all money and benefits that they had earned after years of hard work, and as I begin my second term begins I am proud to renew that commitment in this session.

In 2009 I decided to tackle the issue by tabling Bill C-501 to ensure that the loss of pensions, and severance and termination pay that was experienced by the former Buchanan and AbitibiBowater workers could not occur again.  Bill C-501 was a hefty bill that would have amended three different acts, and elevated pensions, severance, and termination pay to ‘secured’ or ‘super-priority’ creditor status.  C-501 would have guaranteed that all employees would receive all that is owed to them from the estate of the bankrupt company because they were put at the front of the line and ahead of all other debts owed to other creditors (ie: banks).

In the end, C-501 passed through two votes in the House of Commons, but was nullified because of the election of May 2, 2011.  During the legislative process for C-501 I learned a great deal about how things work in Ottawa.  Even some of the most diehard Conservatives and Liberals agreed with the objectives of the bill and wanted to ensure that workers received what they were owed during the bankruptcy process.  I also learned that the more complicated a bill is the easier it is to defeat.

Fast forward to after the election. When discussing the legislative process for the tabling a new bill in this parliament with a few of my New Democrat colleagues I made some important decisions.  The first decision was to treat pensions and severance and termination pay as two different issues.  I approached my caucus colleague and New Democrat Critic for Seniors and Pensions Wayne Marston (Hamilton East – Stoney Creek) about tabling a standalone pension bill which would free me up to table a one-clause bill to protect severance and termination pay.  He agreed and tabled C-331 An Act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (pension plans) and I tabled C-338 An Act to Amend the Bankruptcy Insolvency Act (termination and severance pay).  Both bills are more moderate, simple, and clearer than C-501. This should make it more difficult to oppose which I hope gives them a fighting chance to pass, in some form in this majority parliament.

For my part, I am happy to focus on C-338 which could secure a much greater portion of money for workers who are owed severance and termination pay as it would grant ‘preferred’ creditor status to all employees with outstanding claims on the estate of their former employer.  The old C-501 would have guaranteed severance and termination pay, but C-338 is somewhat different in that it will provide for a bigger payout in most cases because severance and termination pay would be prioritized as ‘preferred’ debt after what is owed to governments and banks, but ahead of other types of claims.  I believe that employees should be at the front of the line of creditors during bankruptcy, but in the end I decided to go with ‘preferred’ creditor because I believe that the Conservatives will find it to be more tolerable and supportable from their standpoint.

In the end I am very happy to have tabled C-338 this week and to again be able get to down to work to ensure that no other workers are forced to experience the injustice that fell upon the former Buchanan workers.  As always, I will keep you informed about the bill as it progresses through the legislative cycle.

 

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