Canada Cooperatives Act

Marginal note:Liability for wages

• 102 (1) Subject to this section and any other applicable law, each director is jointly and severally, or solidarily, liable to the employees of the cooperative for all debts payable to them for services performed while the director held office.

• (2) [Repealed, 2001, c. 14, s. 167]

• Marginal note:Amount of liability

  (3) The amount of the liability under this section may not exceed six months wages in the case of each employee.

• Marginal note:Conditions precedent

  (4) A director is not liable under this section unless

  • (a) the cooperative was sued for the debt within six months after it became due and execution was returned unsatisfied in whole or in part;

  • (b) the cooperative has commenced liquidation or dissolution proceedings or was dissolved and a claim for the debt was proved no later than six months after the earlier of the date of commencement of the proceedings and the date of the dissolution; or

  • (c) the cooperative made an assignment or was made subject to a bankruptcy order under the Bankruptcy and Insolvency Act and a claim for the debt was proved no later than six months after the date of the assignment or bankruptcy order.

• Marginal note:Limitation period

  (5) A director is not liable under this section unless he or she is sued while holding office or no later than two years after ceasing to be a director.

• Marginal note:Amount due after execution

  (6) If execution referred to in paragraph (4)(a) has issued, the amount recoverable from the director is the amount remaining unsatisfied after execution.

• Marginal note:Subrogation of director

  (7) A director who pays a debt owed under this section that is proven in liquidation and dissolution or bankruptcy proceedings is subrogated to any priority that the employee would have been entitled to and, if a judgment has been obtained, the director is

  • (a) in Quebec, subrogated to the employee’s rights as declared in the judgment; and

  • (b) elsewhere in Canada, entitled to an assignment of the judgment.

• Marginal note:Contribution

  (8) A director who pays a debt owed under this section is entitled to contribution from the other directors who were liable for the debt.