Recent reforms introduced by the federal government such as the Wage Earner Protection Program (WEPP) will provide limited protection to workers when their employer declares bankruptcy but there remain unanswered questions around the reforms, says Heather Hettiarachchi, an associate practising labour and employment law in the Vancouver office of Borden Ladner Gervais LLP.

Whether a purchaser in bankruptcy who is deemed a successor employer pursuant to provincial legislation should be liable for the unmet pecuniary obligations of the debtor toward its unionized employees is a central question raised by the reforms but not yet determined, says Hettiarachchi.

'Although a practical approach would be for provincial labour boards to circumscribe successorship obligations in the context of bankruptcy proceedings and hold that a purchaser in bankruptcy who is found to be a successor is not liable for the accrued pecuniary obligations of the debtor towards it unionized employees, whether labour boards would be willing to do so in the absence of judicial or legislative direction remains to be seen.'