Employer possibly going under owing workers money

[a_shy_guy]

Recently, I have figured out that the company I work for might be going under, or at the very least, difficult times. Myself, along with a few people I work with have identified the problem being the lack of proper management. A few of us have had our pay cheques bounce due to an NSF from the company account, company credit cards declined while making fuel purchases(we always got reimbursed), company phones being cut off once or twice, and now the owner is making up excuses on why our pay cheques arent coming in on time(we dont get direct deposit).

Myself, along with 5 other employees working for this company(we represent the majority) have collectively agreed to hand in our 2 weeks notice rather then wait for things to unfold if changes dont happen. The big issue we are running into are the 'banked hours' that we all have. We all have somewhere around 200+ hours stored away for 'time in lieu'.

Since cheques bouncing means the company is spending more then its taking in, and the payroll account is running dry, would we be out of all of our banked hours in the event the company declares bankruptcy? Is there any law that protects employees if events like this unfold?






If it matters, all of our hours are kept on file, but we keep a copy of our time sheets as well. We get payed our typical 88 hours per pay period, rest gets stored away. There is no way they can deny us of the hours that we worked.

 

[FunSugarDaddy]

Well I'm not a lawyer but it seems to me like you're very close to trying to get blood out of a stone. What I believe you have to do is focus on who the directors of the company are and talk to a lawyer about whether or not they would be personally responsble in this situation. It would also be interesting to know whether they, if they were also employees, were getting paid in full during this period.

 

[Pronstar]

Sadly I was in a very similar situation several years ago. I knew the company was suffering some financial woes but every effort was being made to turn things around so I just kept on showing up and doing my job like a good little employee. Unfortunately one day I opened my cheque to find it was for about 20% of what I was owed for my 2 week pay period. I worked nights so I called my boss the next day to find out what had happened and was told that was all they could give me right now things were too tight financially. I had to tell him, if you cant pay me what you owe me, I cant afford to come in. I gave him an accounting of the full amount of missing hours, hours banked, and vacation pay and advised him to cut me a cheque in full for the amount immediately. About 3 weeks later I received a cheque in the mail for approx. $500 ( they owed me almost $4500 at this point ) and was unable to reach anyone at the office by phone. I did some more digging and discovered that employees are considered the last people to get any missing money when a company files for bankruptcy. Once the doors are shut, the companies assets are claimed and sold and all other creditors are payed before any employee ever sees a dime.

Sadly my advice is to quietly get your things in order and walk away now before you get in any deeper. I would hate to see anyone else go through what I did.

 

[FunSugarDaddy]

Al,

I believe you like to pretend you're a lawyer (just kidding) is there any basis in which the Director's could be held accountable in this situation?

I know they can be held personally responsible for certain things, such as payroll remittance's withheld.

 

[wilde]

Some good advice to follow for sure. To the OP, you may want to try to determine whether your employer has enough assets to cover all the secured debts. Try and get some idea from the accounting staff, if possible. If not, your efforts to become a listed creditor may be all for naught and to add insult to injury you are now stuck with a lawyer's bill. Has company assets been seized or leased equipment been repossessed? These are signs that your employer's troubles are beyond merely a cash flow problem. From my experiences, there's usually very little left if anything to pay the employees whether you are a listed creditor or otherwise. Good luck though...

 

[luvsdaty]

Start stealing stuff dude,(start now while all the good stuff is still there) Writings on the wall i'm sorry to say,we're living in tough times.About all you can do is lube up , take a deep breath & try to relax(it doesn't hurt as much that way)
Sorry to hear you guys are getting hosed, unfortunately too many owners like to play the part(Humvee, trophy wife,4 vacations a year,canucks club seats) & they really can't afford it.Unfortunately it's usually the employee's that take it in the pooper :-(
I hope you find work soon dude:thumb:

 

[a_shy_guy]

All of us have quit our jobs and secured new jobs(gotta love the trades industry). We still aren't sure whats going to happen yet since pay day is supposed to be next Friday. If nobodys cheque bounces, then we are fine, its when they do is when we will be seeking legal advice.

 

[luvsdaty]

All of us have quit our jobs and secured new jobs(gotta love the trades industry). We still aren't sure whats going to happen yet since pay day is supposed to be next Friday. If nobodys cheque bounces, then we are fine, its when they do is when we will be seeking legal advice.

Awesome, trades are good & there is going to be a big shortage of them in the years to come.Just as long as your willing to travel(That's why they call us journeymen)
Good luck to you guys & stick with the trades:thumb:

 

[InTheBum]

You should walk out...

 

[doctorkoma]

There are laws, but they are very week. I had this happen to me . I knew that the owners had moved 5 million out of the country before declaring bancruptcy.
The government got involved and came back with a 50 cents on the dollar settlement, which also said all employees had to agree to the settlement.
Someone advised us to hold out for a better settlement. The company refused and we lost it all. I was out $5000.
Take any reasonable offer above 50 %.
They hold all the cards and the government has zero power. They are just the middleman

 

[the old maxx50]

I had this happen to me once , and is the main reason why I don't like working for a company .

I was lucky .. come back to work for them and I had been out of town on a contract job. Came back got payed for that the job and was given my pink slip , the company was bankrupt . They owned other wages and holiday pay , I was only owed a few hundred ..
The labor relations stepped in and confiscated any portable tools and sold them at auction .. I think every one got payed ..

The company that we were doing a housing project for ,at the time , hired everyone back to finish the job.

 

[wilde]

Excerpt from the Resources for Creditors, Bankruptcy by the Office of the Superintendent of Bankruptcy Canada


"Recovering what you're owed

To help creditors recover some of what they are owed, non-exempt property owned by the bankrupt as of the date of the bankruptcy, or acquired prior to the bankruptcy discharge, may be seized and sold by the trustee. Exempt property includes property protected by applicable provincial and federal laws (such as basic furniture or tools-of-trade), property held by the bankrupt in trust for another and, in some cases, goods and services tax (GST) payments.

In addition, the trustee determines the bankrupt's "surplus" income, i.e., the amount beyond what the bankrupt requires to maintain a reasonable standard of living. The bankrupt must pay this amount to the estate for distribution to the creditors after the costs of administration are deducted.

After the trustee has sold all of the bankrupt's property, he or she must prepare a final statement of receipts and disbursements and a dividend sheet. The dividend sheet contains a list of creditors who will receive dividends and the amount to which they are entitled. You will be paid the dividends to which you are entitled before the bankruptcy file is closed, which is before the discharge of the trustee.

The dividends are distributed in the order set out in section 136 of the Bankruptcy and Insolvency Act (BIA) :

1. Secured claims.
2. Funeral fees.
3. The costs of administration, including the fees and disbursements of the trustee and legal costs.
4. A levy on the dividends of secured, preferred and unsecured creditors to defray the expenses of the supervision by the Office of the Superintendent of Bankruptcy.
5. Claims of "preferred" creditors such as wages, salaries, commissions or compensation of employees of the bankrupt (unless the employee is related to the bankrupt — see below).
6. Under certain circumstances, debts or obligations of support to a spouse or common-law partner or child living separate from a debtor.

These prior claims are subject to certain conditions and this list is not exhaustive.

The law gives priority to the claims of preferred creditors (e.g., numbers 5 and 6 above) over those of other unsecured creditors.

The claims of ordinary creditors, i.e., creditors who are not secured creditors and don't have priority under section 136 of the BIA, are satisfied on a pro-rata basis: after all secured and preferred creditors have been paid in full, ordinary creditors divide the remaining funds among themselves in proportion to how much each is owed.

The claims of relatives of the bankrupt are treated differently. For example, if you are the spouse of a bankrupt who owes you wages, you are considered a "deferred" creditor and will not receive a dividend until all preferred claims and all ordinary claims have been satisfied.

However, if you are the mother, father, child, sister, brother, aunt or uncle of a bankrupt who owes you wages, you will be considered an ordinary creditor. This means you will be paid after preferred creditors but before deferred creditors."





So the order is secured creditors, preferred creditors (employees) and ordinary (unsecured) creditors.

 

[a_shy_guy]

So a little update on this thread.


After having been with my new job for a few weeks, I love it. Less stress, less headaches while at or out of work, and generally a better working environment.


Last week, I received my final paycheck in the mail totaling almost 15k in wages owed. I deposited it and asked for it to be held until cleared. The cheque didnt clear at all, and along with all my other former co-workers either. We all marched into the Employment Standards office of Alberta and filled out the forms. As far as what we can see from driving by the old shop from time to time, he has new people working for him. He might be making some income, or screwing people over 2-3 weeks at a time(usually until they get their first paycheck and it bouncing). As far as Employment Standards is concerned, they told each and every one of us they will be taking legal action against the company in an attempt to get our money.