The besieged Hudson’s Bay Co., who plans to close most of its 96 stores at the end of June, will pay up to $ 3 million in a total of retention bonds to 121 managers and executives, but will not pay compensation to its more than 9,300 workers, most of which will soon lose their jobs.
The news is not going well with some activists and labor workers.
“That is incredibly atrocious,” said Canadian president of the Labor Congress, Bea Bruske. “They must return and make sure that all their workers obtain some of those $ 3 million.”
Kevin Grell, who works on an online distribution site in Toronto, was dismayed when he learned of the CBC News bonus payments.
“My emotions take care at this time,” said Grell, who worries that he is soon out of a job.
He asked for his reaction to the bonds, said: “If I had to answer that, I can get into trouble.”
After collecting his thoughts, Grell added: “It’s amazing. It’s a kick in the ass.”
Earlier this month, the iconic department store received the protection of the creditor, since it tries to restructure to stay afloat. Liquidation sales began on Monday except six of their locations with the Bay and Saks brand.
According to the documents presented in the Higher Court of Justice of Ontario, Hudson’s Bay will provide up to $ 3 million to 94 store managers and 27 non -store employees. Ten staff of “senior leadership” not in stores will get the largest bonds, sharing up to $ 1,087,750 of the assigned fund.
(The court documents value bonds at $ 2.7 million, but they say that the total does not exceed $ 3 million “).
The bonuses will serve as incentives for the personnel “whose continuous service will be critical for the success of any washing or restructuring” of the company, they say judicial documents.
The employment lawyer Adrian Ishak says that paying retention bonds is a common practice when indebted companies declare themselves bankrupt or restructured.
“In cold and insensitive terms, it makes logical economic sense,” said Ishak, who is with the law firm Piccolo Heath in Toronto.
“You must be able to retain your best people who will design and implement the strategy and plan to reorganize the business.”
Currently, Hudson’s Bay is still trying to find a restructuring solution.
Financial assistance for workers
Hudson’s bay did not answer a question about retention bonds. But spokeswoman Tiffany Bourré confirmed to CBC News that the retailer will not pay the workers offered any compensation.
In cases of bankruptcy and judicial administration, companies with liquidity problems may choose not to pay compensation, which forces fired workers to make claims as non -guaranteed creditors, which will probably result in cents in dollar.
Bourré says that workers’ pensions must be safe and that they can receive any financial support through Canada Wage protection programA federal program that provides financial assistance to workers when companies declare themselves bankrupt or are bankrupt.
Buyers are struggling to collect memories of Hudson’s Bay after the company obtained approval to start settlement sales, except in the six stores next week. The flagship store in the center of Toronto is among the survivors.
But the lawyer Andrew Hatnay, who represents several Hudson’s Bay employees, says that workers will not be able to request assistance until everyone has been fired, which could be within months.
He says that the absence of compensation payments, which serve as a security network, has left anguished workers.
“They are upset,” Hatnay said. “They don’t want to lose their jobs in a difficult economy.”
Grell, 61, has been an employee of the bay for more than eight years. He says that he has already begun to look for another job, but that he has not had luck.
“It’s overwhelming. I have even had nights in which I wake up in the middle of the night,” he said.
In normal circumstances, Ontario requires Employers pay the compensation of dismissed workers that equals at least one week of payment for each year of employment, up to a maximum of 26 weeks. The rules may vary in other provinces.
Grell says that losing compensation will make things difficult for workers.
“That [money] There would be a long way. That would have helped with invoices, rent, food, “he said.” Many people are living in Paycheque to Paycheque. “
CBC News tried to interview other Bay employees, but they refused.
Grell says that many workers are afraid to speak publicly, because they signed a non -dissemination agreement when they were hired.
Hudson Bay did not answer a question about the workers who sign these agreements.
Legislation to protect separation?
Sears Canada also faced criticism when CBC News revealed That company, which requested bankruptcy protection in 2017, did not pay compensation to its 12,000 workers, but did pay large withholding bonds to 43 executives and senior directors.
Many Sears employees It also ended with small pensions.
The resulting violent reaction led Federal legislation in 2023 which improves protections for workers with defined benefit pension plans if your employer becomes insolvent. The legislation enters into force in 2027.
According to debate transcripts of the House of Commons in 2022, some parliamentarians pressed so that the separation protections were included in the legislation, but were not successful.
“It was incredibly disappointing and frustrating,” said Bruske, from the Canadian Labor Congress. “We also need to strengthen things like the compensation pay because when it is out of a market job we have today, in a affordability crisis, in a housing crisis, workers have difficult decisions to make.”
She says that with what is happening in Hudson’s Bay, workers’ rights must be an electoral problem.
“Now is the time that all workers … ask the candidates who come to their door, ‘What are you doing in the protections of the workers? What is your position on things like compensation for compensation?'”
However, Ishak, the lawyer, argues that protecting the compensation of workers in cases of bankruptcy has a price.
Currently in bankruptcy procedures, the guaranteed creditors, such as banks, are the first in line so that they are paid the money that is due to them. He says that if the workers had priority over banks, they could discourage them to finance new companies.
“It will be a great discouragement for these companies to advance loans. And without those loans, companies cannot flourish.”
