Sears Canada to seek court approval to suspend benefits for retirees
Posted July 6, 2017 8:37 am.
This article is more than 5 years old.
TORONTO, ON. (NEWS 1130) – Imagine working hard for a company for 35 years, being laid off and receiving zero severance. That’s the unfortunate situation many former Sears Canada employees are facing after the retail giant filed for bankruptcy.
The company closed 59 stores across the country and laid off almost 3,000 non-union staff members last month.
BC Federation of Labour Irene Lanzinger says the company escaped its responsibility to pay compensation. “Under the federal bankruptcy legislation, they’re way down the list of people who get compensated. It’s unfair that people who’ve been loyal to this company, who worked for Sears for years will now lose their job instantly and not get the money they’re owed.”
One labour law firm is calling for federal rule changes which include making employees’ secured creditors and making officers and directors of a company personally liable for severance entitlements.
Sears Canada says it will go to court next week to seek approval to suspend benefits for its retired employees as well as special payments to its defined benefit pension plan.
The ailing retailer says it will also ask the Ontario Superior Court on July 13th to extend court protection from creditors to October 4th, giving it time to seek out potential investors and buyers and consult with its landlords, employees, suppliers and creditors.
It had indicated in its initial court filings on June 22nd that it planned to suspend life insurance, health and dental benefits to certain employees during the restructuring.
The company expects to complete its sale and investment solicitation process by October 25th.
After years of declining sales, Sears Canada sought creditor protection last month.
