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Bill C-423

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SUMMARY

The purpose of this enactment is to give unpaid wages and other compensation including payments due for benefits in a bankruptcy a first priority in distribution that ranks before all other claims including the claims of secured creditors. This reflects the principle that employees have a right to the wages, salaries, benefits and other emoluments that they have earned by work, on an hour by hour basis, notwithstanding the fact that they may not be normally payable on that basis or have not actually been paid at the time of the bankruptcy, and that the employer or the employer's creditors should not have a right to take any part of those amounts in settlement of other claims.

Security taken or granted before the enactment comes into force is not affected.

The enactment also increases the amounts of $5,000 in wages and salaries and $2,000 in commissions, being the amounts that presently rank after secured creditors and certain other claims and charges, and establishes the first priority at $10,000 and $4,000 respectively.