Published by Senator Art Eggleton on 03 May 2010
Recently, I tabled a bill in the Senate that would amend the bankruptcy process to better protect employees on long-term disability (LTD) by granting them preferred status during bankruptcy proceedings.
Approximately one million employees in Canada have LTD benefits that are self-insured by their employers, and many of these plans are underfunded. If their company goes bankrupt, LTD employees are currently ranked as unsecured creditors and could be left holding an empty bag of benefits.
If they are disabled, and cannot work they should not be shunted aside. Their needs are not over when their company goes under. They still have to pay for their medication. They still need rehabilitation. They still need treatment. All the things that long-term disability plans provide.
By bringing LTD claimants to preferred status, employees will be more likely to get their benefit coverage up to age 65, be able to pay their medical bills and continue to live outside of poverty. And it will reaffirm the premise that people who paid their dues and played by the rules will receive what was promised them.
Nowhere is this problem more starkly illustrated than in the case of the bankruptcy of Nortel. As the company does through bankruptcy, over 400 Nortel employees on long-term disability will lose their benefits forcing many onto social assistance.
Josee Marin, a former lab technologist at Nortel, and single mother, suffers from Crohn's disease, an inflammatory bowel condition, and scleroderma, a chronic autoimmune disorder. She has been on long-term disability since 2002 and doesn’t want to become a burden to taxpayers, or on her family. She just wants to be able to live the remaining years of her life in dignity. Or as she so starkly stated “I want to die in the comfort of my home not in my car or on the street.”
To help Josee and the 400 other Nortel workers this bill needs to be passed quickly. I hope that all parties will come together and do what is right and just.
By doing so some of our most vulnerable citizens will be protected and we will bring a greater degree of fairness to the bankruptcy process now and in the future.