Section 81.4 — Bankruptcy and Insolvency Act: Security for unpaid wages, etc. — receivership

The claim of a clerk, servant, travelling salesperson, labourer or worker who is owed wages, salaries, commissions or compensation by a person who is subject to a receivership for services rendered during the six months before the first day on which there was a receiver in relation to the person is secured, as of that day, to the extent of $2,000 — less any amount paid for those services by a receiver or trustee —

by security on the person’s current assets that are in the possession or under the control of the receiver. For the purposes of subsection (1), commissions payable when goods are shipped, delivered or paid for, if shipped, delivered or paid for during the six-month period referred to in that subsection, are deemed to have been earned in those six months. The claim of a travelling salesperson who is owed money by a person who is subject to a receivership for disbursements properly incurred in and about the person’s business during the six months before the first day on which there was a receiver in relation to the person is secured, as of that day, to the extent of $1,000 — less any amount paid for those disbursements by a receiver or trustee —

by security on the person’s current assets that are in the possession or under the control of the receiver. A security under this section ranks above every other claim, right, charge or security against the person’s current assets — regardless of when that other claim, right, charge or security arose — except rights under sections 81.1 and 81.2. If the receiver takes possession or in any way disposes of current assets covered by the security, the receiver is liable for the claim of the clerk, servant, travelling salesperson, labourer or worker to the extent of the amount realized on the disposition of the current assets and is subrogated in and to all rights of the clerk, servant, travelling salesperson, labourer or worker in respect of the amounts paid to that person by the receiver. No officer or director of the person who is subject to a receivership is entitled to have a claim secured under this section. A person who, in respect of a transaction, was not dealing at arm’s length with a person who is subject to a receivership is not entitled to have a claim arising from that transaction secured by this section unless, in the opinion of the receiver, having regard to the circumstances — including the remuneration for, the terms and conditions of and the duration, nature and importance of the services rendered —

it is reasonable to conclude that they would have entered into a substantially similar transaction if they had been dealing with each other at arm’s length. A claim referred to in this section is proved by delivering to the receiver a proof of claim in the prescribed form. The following definitions apply in this section. compensation includes vacation pay but does not include termination or severance pay. ( rémunération ) person who is subject to a receivership means a person any of whose property is in the possession or under the control of a receiver. ( personne faisant l’objet d’une mise sous séquestre ) receiver means a receiver within the meaning of subsection 243(2) or an interim receiver appointed under subsection 46(1), 47(1) or 47.1(1). ( séquestre )