What led to Metroland Media filing for protection from creditors for bankruptcy in Ontario?

The Canadian newspaper industry is in trouble again as a major newspaper chain has filed for protection from creditors in the context of bankruptcy in Ontario. Metroland Media, a chain of 70 Ontario community newspapers and dailies, owes at least $41.6 million to its owner corporation and is now under the spotlight for allegedly strategically avoiding its creditors. Amongst these creditors are dismissed employees, who will be near the end of the line in collecting their entitlements from a bankrupt company.

As part of the bankruptcy proceedings, Metroland has dismissed over 600 employees with little or no severance pay. Caught in an industry impacted by similar layoffs, these dismissed employees may have significant difficulties in finding new employment.

What factors determine entitlement to severance pay in Ontario?

Unfortunately, employees are considered to be unsecured creditors in the event of bankruptcy. This means that they will only be paid after the secured creditors, such as banks and other major lenders. However, that is not to say that there are no protections for employees that have lost their jobs due to a bankruptcy. For employees who were not paid their proper wages in the months prior to the dismissal, they will be entitled to a capped amount of compensation. As these amounts are capped, employees should be cautious of continuing to work unpaid for a financially struggling company, as they may not be able to recover all of the unpaid wages.

Entitlement to severance pay in Ontario on dismissal from a company facing bankruptcy in Ontario depends in large part on when the employee was fired. If fired before the bankruptcy, they may be able to recover some severance pay. If fired after/because of the bankruptcy, they likely will not receive severance pay or termination pay.

How can Whitten & Lublin assist employees in understanding and circumstances during bankruptcy in Ontario?

To better understand your employment rights in the event of bankruptcy, we encourage employees to seek legal advice. We at Whitten & Lublin are happy to provide insight and advice into your specific circumstances. If you are looking for employment lawyers and would like more information about what Whitten & Lublin can do for you, please contact us online or by phone at (416) 640-2667 today.