My mom's company is declaring bankruptcy, what's next in terms of compensation?

[pcboy]

Hello everyone,

As stated in the tittle, this is the first time it happens to our family and your advice is greatly appreciated. I am not good at writing long paragraph, please see below for the whole story. If you don't want to whole story, please read sentence in bold.

Background Info: My mother work for this dry clean store for 16 years. There's a approximately 6-7 full time staff at this place including the owner.

What: The owner notified all the staff in early December that the business is currently being sold. On December 23, the owner said he will declare bankruptcy, but business will be usual. The only difference is that the pay check will be coming from the appointed bankruptcy trustee until the new owner is officially taken over the business. The current owner assured everyone will be employ by the new owner.

Question: My mother got a letter from the trustee, asking her to file any claims for outstanding wages and any other eligible expense in accordance with the "Wage Earner Protection Program Act (Canada). Is my mother eligible for a servance package? For example, if my mother is let go from the current owner, he would have to pay my mother approximately 1 week per year of service according to the the labour law in Ontario (http://www.labour.gov.on.ca/english/.../severance.php). However, if my mother is let go under the new employer, she would get nothing for servance because it lost all her previous work histories....

Should I put that on the claim sheet from the trustee? Thank you all in advance, this is a very difficult period of our family because we have absolutely no prior history on these situations. It seems like the employer knows all the rules and grey areas, and we are just helpless with a bunch of questions....

[jacksorbetta]

I have experience here. She needs to fill in the trustee forms completely, and submit them right away. There is a program called WEPP that will essentially cover her severance (if the trustee has submitted their side of the info on time). Please take note though that in a corporate BK, it is very unlikely she will receive any kind of compensation. Length of employment should have bearing, but really doesnt. When a company files bankruptcy, it basically gives them license to let everyone go at no cost to them. My best suggestion is for her to find another job right away, rather than waiting for the doors to close. I won't go into a really long explanation here, you can PM me for more info.

Sorry to hear that though, it's awful to face a job loss like that/.