Sydney call centre troubles lead to extended worker protections
Workers whose employer goes bankrupt outside of Canada soon to be added to Wage Earner Protection Program
The federal government is extending financial protection to workers whose employer goes bankrupt in a foreign country as a direct result of problems experienced two years ago by call centre workers in Sydney, N.S.
In 2018, about 600 employees of ServiCom were thrown out of work three weeks before Christmas after the call centre's American owner, JNET Communications, filed for bankruptcy in a U.S. court.
That meant the workers had no way to recover the pay they were owed and would otherwise receive under the federal Wage Earner Protection Program.
The employees faced a bleak holiday season, owed about $1 million in pay and bonuses with little hope of recovery.
By the new year, another U.S. call centre company — MCI Canada — bought ServiCom's assets and restarted the Sydney operation.
Employees said they hunkered down and made it through Christmas with the help of friends and family.
Three months later, the Nova Scotia Department of Labour tried something it had never done before.
The province filed a court action on behalf of the employees. It sought a declaration of bankruptcy in Canada to allow the workers to access the wage protection program.
That was granted and, in June 2019, the workers started getting back pay.
According to a regulatory impact analysis published in the Canada Gazette, Ottawa is changing the regulations as a direct result of the ServiCom decision to protect Canadian workers by including them under the program, even if their employer is based in another country.
The wage protection program allows workers to access up to $2,000 in back pay and gives employees "super-priority" status, which means wages and vacation pay rank ahead of secured creditors in a bankruptcy case.
Going to court to help workers access the program was "complicated and time consuming," the analysis said, and changing the regulations is expected to result in only a small number of additional claims and little extra cost.
The new regulations are expected to take effect this spring.
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