People browse liquidation items at the Hudson's Bay flagship store in the Eaton Centre, in Toronto, on May 27.Cole Burston/The Globe and Mail
By the time Hudson’s Bay Co. winds up the last of its liquidation sales this coming Sunday, the vast majority of its employees – more than 8,300 people – will have been terminated by the company without severance pay.
The retailer’s wind-up has led to a massive wave of job losses across the country, the largest hit to Canadian retail-sector workers in years.
Canada’s oldest retailer will return to court next Tuesday, June 3, to seek an order that will instead trigger employees’ entitlement to benefits under the federal government’s Wage Earner Protection Program, which is designed to pay severance to workers whose companies are bankrupt or in receivership.
Court documents filed on Monday also confirmed that many current and former Hudson’s Bay employees who receive long-term disability benefits will lose that support as of June 15.
Hudson’s Bay filed for protection from its creditors under the Companies’ Creditors Arrangement Act (CCAA) on March 7.
The maximum eligible amount under the Wage Earner Protection Program is $8,844.22 per employee, according to law firm Ursel Phillips Fellows Hopkinson LLP, which was recently appointed by the court as representative counsel for the HBC employees.
In a statement, lawyer Susan Ursel wrote that the move would be “good news” for current and former employees.
But Margaret Henry, an employee at the Bay’s e-commerce distribution centre, said the federal support is “nothing compared to what we are owed.”
Ms. Henry is one of the last staff left at the distribution centre, where she has worked since 2012, and has seen nearly 200 of her colleagues depart due to layoffs since May 1.
“They worked until the end,” Ms. Henry said, adding that it has been a busy time as workers transferred unsold merchandise to stores for liquidation sales, and prepared for the distribution centre to close. “They did it, they worked hard. They deserve their severance, at least.”
Roughly 189 people will also soon lose their disability benefits, a group whose payments were covered under an “administrative services only” (ASO) arrangement, which were paid out of the company’s own cash. Last month, The Globe reported on the existence of the ASO plan, and the employees’ concerns that their benefits could disappear.
Another 100 to 200 current and former employees receive benefits under an insured plan. Their benefits will continue to be paid.
Hudson’s Bay has already cut off other benefits: on April 30, roughly 2,200 retirees lost their health and dental benefits, as well as life insurance policies.
The company and its senior lenders, along with the lawyers for the employees, “continue to explore the possibility of implementing a hardship fund or structure to provide monetary assistance to current and former employees who are experiencing financial difficulty after the loss of their benefits,” Hudson’s Bay chief operating officer and chief financial officer Michael Culhane wrote in an affidavit filed with the court on Monday.
Ms. Ursel wrote in her statement that the parties are also exploring “other avenues of alleviation for affected employees and will advise as developments allow.”
Hudson’s Bay has been letting store employees go as their locations’ closing dates – which vary – have approached. All of the company’s 96 stores across Canada will be closed by June 1.
Starting next week, the remaining 1,107 staff will assist with the wind-up of the business, including clearing out furniture and fixtures from the stores, according to court documents.
Another approximately 900 employees will lose their jobs on June 15, with the rest remaining to assist with winding up the company’s operations.
Unifor, the union that represents nearly 600 employees who worked at the e-commerce distribution centre as well as stores in Mississauga and Kitchener, Ont., has called on the Bay to honour its severance agreements. The union held solidarity rallies on Tuesday in Toronto and Windsor, Ont.
Ms. Henry, the distribution centre worker who is also a Unifor representative, said she has been disappointed in the lack of protections for employees during the CCAA process.
“As far as we are concerned, the legislation is not for us. It is for the owners, and the creditors,” she said. “Not for us.”