Case information

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Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

Commercial law - Bankruptcy and insolvency - Plan of arrangement - Claims related to severance pay provided for in collective agreement that owed to employees laid off after court order made under s. 11 of the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 (“CCAA”) - Claims related to pay equity agreement between union and employer - Whether claims in question subject to plan of arrangement in light of s. 11.3 CCAA, Syndicat national de l’amiante d’Asbestos inc. v. Mine Jeffrey inc., [2003] R.J.Q. 420 (C.A.), and right to equality - Whether Court of Appeal erred in denying leave to appeal.

In December 2007, the Superior Court made an order under the CCAA in respect of TQS Inc. and the other Respondent companies of its group (“the TQS Group”) and appointed the intervener RSM Richter Inc. as monitor. During the arrangement process, the Respondents decided, on the basis of the order, to terminate the employment of certain employees, some of whom were represented by the Applicant union. The Respondents then prepared a plan of arrangement according to which the employees’ salaries, including holiday pay and benefits acquired since the date of the order, would not be covered by the plan and would therefore be paid to the laid-off employees in the ordinary course of business up to the effective date of their termination of employment. However, severance pay under the collective agreement and claims related to a pay equity agreement would be treated as ordinary claims. The Applicants applied to the Superior Court to modify the plan of arrangement and postpone the date of the creditors’ meeting to approve the plan. They submitted that those employees who were still working for the TQS Group while it was under CCAA protection should continue to benefit from the working conditions provided for in the collective agreement, and that severance pay and amounts owed under the pay equity agreement should be paid in the ordinary course of business (or, in the case of the amounts related to pay equity, should be paid in priority). The Superior Court dismissed the Applicant’s motions, and the plan of arrangement was approved shortly thereafter. The Applicants then objected to the sanction of the plan, but were unsuccessful. The Court of Appeal denied leave to appeal.