The United Food and Commercial Workers, Local 1006A (“UFCW“) is assisting its Ontario members who had their employment terminated in the bankruptcy of Neptune Security Services Inc. (“Neptune“) in May 2023 without being paid severance or termination pay. We are working to help our members recover amounts owed by Neptune and obtain government payments under the Wager Earner Protection Program.
Neptune was in the business of providing security and related services at various locations across Ontario and had UFCW members as its employees. In May 2023, Neptune became insolvent.
Neptune’s bankruptcy process is complicated. On May 5, 2023, Neptune filed a “Notice of Intention to Make a Proposal” (the “Proposal“) under the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3. Harris & Partners Inc.’s trustee firm was named the Proposal Trustee. A few days later, on May 18, 2023, Neptune abandoned its Proposal and filed an assignment in bankruptcy. Harris & Partners Inc. became the Trustee in the Bankruptcy of Neptune.
Under the law, Neptune’s bankruptcy terminated all employees’ employment, including the UFCW members. However, bankruptcy does not halt the collective agreement.
Also, on May 18, 2023, the Toronto-Dominion Bank, a lender to Neptune, brought a receivership application against Neptune. The trustee firm of msi Spergel Inc. (“Spergel“) became the Receiver of Neptune by order of Justice Penny of the Ontario Superior Court of Justice. This order replaced Harris & Partners Inc. by Spergel, who took over as the Trustee in Bankruptcy of Neptune.
Spergel is not continuing any business operations of Neptune. Spergel is in the process of obtaining Neptune’s books and records. Based on the publicly filed documents, Neptune will not have sufficient assets to pay the claims of its creditors meaningfully, and any amount it can produce will be minimal. We continue monitoring Neptune’s bankruptcy proceedings for possible recoveries for UFCW members.
The Bankruptcy of 13994929 Canada Inc. (“1399”)
Neptune was part of a group of related companies, one of which was 13994929 Canada Inc. (“1399“). Our information is that 1399 provided payroll services for the employees of Neptune.
On May 29, 2023, 1399 filed for bankruptcy, and Harris & Partners Inc. became its Trustee in Bankruptcy. Based on the publicly filed documents, it appears that 1399 has insufficient assets to pay its creditors fully.
However, we are working with our lawyers to assemble and review the employee data and records, prepare our members’ severance and other claims, and facilitate the filing of WEPP applications with the federal government so that UFCW members can receive a WEPP payment, described below.
The Wage Earner Protection Program
The Wage Earner Protection Program (“WEPP“) is a federal program that provides a payment to employees terminated in the bankruptcy or receivership of their employer. In 2023, individuals are eligible to receive a WEPP payment of up to $8,278.83. To become eligible for WEPP, the Trustee in bankruptcy must verify and accept the claims of employees for unpaid wages and severance pay. The Trustee will notify the federal government that the employees’ claims are valid. Employees can then submit a WEPP application to the federal government. Once approved, the federal government will send a payment to the employee.
UFCW is currently calculating and preparing the Union members’ claims. We are also working with Harris & Partners Inc. to review the employee data and the company records and to facilitate WEPP payments. We will provide further updates on the next steps for applying for WEPP shortly. For your reference, WEPP applications can be completed online by clicking here.
Harris & Partners Inc. has obtained an extension from the federal government for filing WEPP applications while the employee claims are being prepared; currently, to the end of October, we anticipate a further extension after that due to the difficulty of preparing accurate information.
UFCW Members Inquiries
If you have questions about the Neptune bankruptcy, the claims we are preparing for UFCW members or the WEPP process, please get in touch with Mark Gernon at [email protected].