Senator Art Eggleton will table a bill in the Senate that would amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act to protect employees on long-term disability (LTD) by granting them preferred status during bankruptcy proceedings.
“LTD employees who are disabled, who cannot work, who can’t find new employment shouldn’t be shunted aside.” said Senator Eggleton. “This bill will help protect them by changing practices that are unfair and unjust.”
“By bringing LTD claimants to preferred status, employees will continue to get their benefit coverage, be able to pay their medical bills and continue to live out of poverty,” said Liberal Seniors and Pensions Critic Judy Sgro.
At the moment, approximately one million employees in Canada have disability benefits that are self-insured by their employers. If their company goes bankrupt, LTD employees – who are unsecured creditors – will be left holding an empty bag. These employees will turn increasingly to social assistance, make greater use of social services, while the company walks away from its responsibilities.
If nothing is done soon, many Canadians on long-term disability will lose their benefits if their company goes into bankruptcy. Over 400 employees at Nortel alone face this grim reality.
“We would like to work with all parties to get this bill passed as soon as possible,” concluded Senator Eggleton.
