Recent legislative changes to the WEPP

NOTE: Help on accessing alternative formats, such as Portable Document Format (PDF) files, can be obtained in the alternate format help section.

What legislative changes have been made to the WEPP?

The Program was expanded to cover employees who lose their jobs when their employer's attempt at restructuring subsequently ends in bankruptcy or receivership. Expanding coverage of the WEPP means more Canadian workers may qualify for WEPP support.

The new amendments to the Program as announced in Budget 2011 modify the period in which wages earned are eligible to be covered by WEPP, and in which employment must have ended for termination and severance pay coverage to apply.

When did these changes take effect?

The above amendments to the WEPP were effective as of December 15, 2011, the date the legislation came into force and are retroactive to bankruptcies and receiverships occuring after June 5, 2011.

What is the new definition of eligible wages?

The following amounts are considered eligible wages under the WEPP:

  • Salaries, commissions, compensation for services rendered, vacation pay, gratuities accounted for by the employer, disbursements of a travelling salesperson properly incurred in and about the business of the former employer, production bonuses and shift premiums that were earned during the eligibility period; and
  • Severance pay and termination pay for employment that ended during the eligibility period.

What is the eligibility period?

The eligibility period is defined as the period in which wages and vacation pay must be earned to be compensated under the WEPP and in which your employment must have ended to be eligible for termination and severance pay.

The eligibility period starts six months before a restructuring event and ends on the date of bankrupcty or receivership. Should your employer not go through restructuring, the eligibility period is the six-month period ending on the date of bankruptcy or receivership.

What is a restructuring event?

For the purposes of WEPP, a restructuring event is a proposal under Division I of Part III of the Bankruptcy and Insolvency Act or proceedings under the Companies' Creditors Arrangement Act.

The trustee or receiver administering the insolvency of your former employer will indicate to you whether these events occurred in your situation.

What are the trustees'/receivers' obligations?

  • Trustees and receivers will continue to provide Service Canada with the Trustee/Receiver Information Forms which set out the amount of eligible wages owing to each individual employee.
  • With regard to the new 2011 legislative amendments that are retroactive to June 5, 2011, trustees and receivers will be required to submit a new or amended Trustee/Receiver Information Form and a Supplementary Trustee/Receiver Information Form for a bankruptcy or receivership which took place during the period between June 5, 2011 and December 15, 2011, the date the legislation came into force.
  • For bankruptcies or receiverships that occur after December 15, 2011, one SupplementaryTrustee/Receiver Information Form will be required for any estate or property where a restructuring event previously took place, and TIFs are filed.

What are the employees' obligations?

  • For the period between June 5, 2011 and December 15, 2011, the date the legislation came into force, employees who have already submitted an application under the WEPP will not need to submit a new application to claim any additional entitlement as that information will be provided by the trustee or receiver. However, employees may need to provide a revised proof of claim to their trustee or receiver to include any changes in the amounts owed.
  • Employees who have not already submitted a WEPP application will need to submit an application to the WEPP for the period between June 5, 2011 and December 15, 2011, the date the legislation came into force if their former employer became bankrupt or subject to receivership during that period and if, as a result of the new amendments, they are now owed eligible wages for which they are entitled to submit an application under the WEPP.

Are trustees/receivers required to provide a new or amended Trustee/Receiver Information Form?

For the period between June 5, 2011 and December 15, 2011, the date the legislation came into force, a SupplementaryTrustee/Receiver Information Form will be required for any estate or property for which a new or amended Trustee/Receiver Information Form is necessary. Only one Supplementary Trustee/Receiver Information Form is required per estate/property.

For bankruptcies or receiverships occuring in the period between June 5, 2011 and December 15, 2011, new or amended Trustee/Receiver Information Forms will be required as per the following:

  • A new Trustee/Receiver Information Form will be required in cases where applicants who were not previously entitled to a WEPP payment become eligible as a result of the amended legislation. 
  • An amended Trustee/Receiver Information Form will be required in cases where the trustee or receiver has already submitted a Trustee/Receiver Information Form for an applicant during the period between June 5, 2011 and December 15, 2011, and one of the following conditions apply:
    •  the individual is now eligible for more compensation under the WEPP than was reported on the original Trustee/Receiver Information Form.
    • A Trustee/Receiver Information Form was filed for an individual who was found to be ineligible for a WEPP payment, but now becomes elilgible as a result of the amended legislation. An amended form is required even if the amounts reported remain unchanged. For example if a person was ineligible because their employment was terminated outside of the six month period ending on the date of bankruptcy or receivership but becomes eligible as a result of the new changes.

For bankruptcies or receiverships that occur after December 15, 2011, one SupplementaryTrustee/Receiver Information Form will be required for any estate or property where a restructuring event previously took place, and TIFs are filed.

New or amended Trustee/Receiver Information Forms are not required in cases where:

  • there are no amounts owing to the employee for wages, vacation, termination or severance pay or other amounts prescribed under the WEPP legislation;
  • the trustee or receiver has already paid the applicant the full WEPP maximum of four weeks insurable earnings under Employment Insurance ($3,531 for 2012) to compensate for wages, vacation pay, termination pay, severance pay or other amounts owing;
  • the applicant has already been paid from WEPP for the full WEPP maximum of four weeks insurable earnings under Employment Insurance ($3,531 for 2012) to compensate for wages, vacation pay, termination pay, severance pay or other amounts prescribed under the WEPP legislation.