Rizzo & Rizzo Shoes Limited, Re
Rizzo & Rizzo Shoes: ESA Claims in Bankruptcy
Summary
This is a merits decision by the Court of Appeal for Ontario regarding the provability of employment standards claims in bankruptcy. The court determined that termination, severance, and vacation pay claims under the Employment Standards Act are not provable in bankruptcy because bankruptcy does not constitute a termination by the employer, and vacation pay is not triggered by the mere cessation of employment. This decision was appealed to the Supreme Court of Canada, which reversed it (Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 SCR 27). The Supreme Court allowed the appeal, declaring that Rizzo's former employees are entitled to make claims for termination pay (including vacation pay) and severance pay as unsecured creditors in the bankruptcy.
Outcome
reversed by the Supreme Court of Canada ([1998] 1 SCR 27)
Key Factors
- bankruptcy and insolvency
- employment standards act
- provable claims
- termination by employer
- ministry of labour authority
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This summary was written by AI from the published decision and its headnote. It is not an official version of the decision; read the full text on CanLII before relying on it. This is legal information, not legal advice. Ontario Severance is an educational tool. If you are facing a serious employment law matter, consult with a qualified employment lawyer in Ontario.