How to claim wage adjustments in the event of a company’s bankruptcy or insolvency

Companies that become insolvent or go bankrupt have an obligation to do their pay equity work. Workers retain their right to pay equity in these situations. If the pay equity work results in wage adjustments, they must be paid to the workers concerned.

Steps to claim wage adjustments related to pay equity work

1. With the CNESST

If the company becomes insolvent and pay equity work has not been done, you can file a complaint concerning pay equity work with the CNESST for failure to do pay equity work or non-payment of sums owed, if the sums are known. When the company officially goes bankrupt, the CNESST can no longer handle pay equity complaints. The only possible exception would be the sale of an insolvent or bankrupt company to an employer who continues to carry on the same activities. If the sale is not court ordered, the new employer will, as a general rule, become liable for the company’s pay equity obligations.

2. With the company’s insolvency trustee

We recommend that you contact the licensed insolvency trustee in charge of your employer’s file. Depending on your situation, you may need to complete a proof of claim to be considered a priority creditor. The proof of claim will be used to recover any amounts owed in connection with pay equity.

If your employer was late in their pay equity work when they filed for insolvency or bankruptcy, your name may not appear on the list of creditors. You might not receive the proof of claim form. In this case, contact the trustee in charge of the file. To find out if your employer is late in their pay equity work, contact us.

Multiple claims for the same person

If you have more than one claim to make against the bankrupt company under more than one act or your employment contract, you must file separate proofs of claim with the insolvency trustee.

For example, if you have to claim sick leave and travel expenses under your employment contract, an indemnity related to notice of termination of employment under the Loi sur les normes du travail as well as sums under the Loi sur l’équité salariale, you will have to file 3 different proofs of claim 

• one for the terms and conditions related to your employment contract
• one for the indemnity related to notice of termination of employment
• one for the sums owed with respect to pay equity

How do I file a proof of claim for amounts related to pay equity work?

When insolvency or bankruptcy proceedings are filed,

• if your employer owed you pay equity adjustments, you must:
  • indicate the value of the pay equity adjustments due to you
  • collect the supporting documents that can be used to calculate the debt that your employer owes you in terms of pay equity (for example, posting of the results of pay equity work, number of hours worked or pay slip)
• if your employer was late in their pay equity work and you do not know if they owe you wage adjustments, you must:
  • contact the licensed insolvency trustee in charge of the file to remind the employer of their obligation to do their pay equity work
  • collect the supporting documents you must provide to the trustee to enable them to assess your claim once the pay equity work has been done (date of the obligation to achieve pay equity before the bankruptcy, failure of the employer to do pay equity work, pay slips, etc.)
  • produce a “contingent or unliquidated” claim. In situations where the amount owed is not known at the time of the insolvency or bankruptcy, the licensed insolvency trustee assesses and determines whether the claim can be proven on the basis of the supporting documents submitted, which would then allow you to vote at the creditors’ meeting.