Unpaid employee, common phenomenon, employment law, rights and remedies, problems
The unpaid employee is a common phenomenon in employment law, and one which poses difficult problems of determining the available rights and remedies. Take Jean, for example, who works full-time in an office for Bill. By virtue of her employment contract, Jean earns a fixed salary at an hourly rate. Moreover, provincial statutes entitle her to vacation pay and holiday pay. Bill falls one month in arrears in paying Jean's wages, because his business is financially unstable. This adds a new dimension to the employment relationship: Jean is not only an employee, but also a creditor of Bill for wages owing. How can Jean collect this debt if Bill is unwilling to pay, or incapable of paying? Suppose that Bill owes other debts, for example, to the city for taxes, to a finance company for a short-term loan, to a manufacturer for an equipment lease, and to a car dealer for a conditional sale agreement. How will Jean's claim for wages fare against these competing creditors?
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Debbie Zatzman, “The Unpaid Employee as Creditor: Case Comment on Homeplan Realty” (1980-1981) 6:1 DLJ 148.