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Ex-MEC staff says company withholding severance pay due a month ago

Last Updated Oct 9, 2020 at 7:55 am PDT

FILE - MEC's head office on Great Northern Way in Vancouver. (Hana Mae Nassar, NEWS 1130 Photo)
Summary

MEC's new owners will keep more 'active' staff than expected

21 of 22 MEC stores will remain open after sale of assets

It remains unclear how many furloughed MEC staff have been fired

VANCOUVER (NEWS 1130) — The first round of post-sale layoffs came hard and fast for Mountain Equipment Co-op staff, who received emails Thursday afternoon notifying them they were fired and would not receive severance pay.

The company says it is keeping 85 per cent of staff who are actively employed and will keep 21 of the existing 22 stores open, meaning at least 100 people lost their jobs Thursday.

However, it remains unclear how many furloughed staff were also fired, as one employee accuses MEC of withholding severance pay illegally.

Greg Crosby worked at the Vancouver store for 12 years and says he was one of more than 1,300 staff temporarily laid off in March and April, because of COVID-19 shutdowns.

He says MEC skirted its obligations to pay him severance more than a month ago, before the sale of assets had even been announced and before MEC sought credit protection.

“My feeling is they’re holding off on all that to avoid paying me,” says Crosby. “I’m pretty disappointed and upset about the whole thing.”

Thanks to recent changes to the federal Employment Standards Regulation, temporary layoffs due to the COVID-19 pandemic were allowed to be extended to a period of 24 weeks as long as the layoff began before June 1 and ended before Aug. 30.

Employers could have applied to have layoffs extended, but failing to do so by Aug. 30 means they must have either terminated the employee or rehired them.

Crosby says he emailed and phoned the human resources department multiple times to clarify his employment status and never heard back.

“I talked to Employment Standards and they said ‘If you haven’t heard back by August 30 and you haven’t agreed to extend your layoff then you’re terminated already and you’re entitled to your severance pay,’” explains Crosby.

He wonders if MEC simply extended his layoff without even telling him.

“There was a form employers were supposed to coordinate with employees if they wanted to extend the layoff beyond the deadline, so it looks like they went ahead and extended my layoff without my agreement, which is counter to what the updates legislation says.”

He says he continued to email and leave voicemails with MEC’s human resources hotline but didn’t hear back until he received an email notifying he was fired, Thursday afternoon.

CCAA proceeding undermines severance for many

While non-unionized employees are entitled to severance pay in many circumstances, MEC applied for protection under the Companies’ Creditors Arrangements Act on Sept. 14, the same day the sale of assets was announced.

The CCAA process determines who gets paid after a sale, and staff are generally considered similar to other unsecured creditors, such as the dozens of vendors, landlords and contractors MEC owes millions to. Whether they are paid out at the end of the process is far from a sure thing.

Crosby, however, also sought advice from Sanfiru Tumarkin LLP, which specializes in employment law.

“They told me under B.C. common law, based on my age and length of time with the company that I’m entitled to 12 months of severance,” says Crosby.

According to Lawson Lundell LLP, Crosby, unlike many MEC staff, may have been entitled to a severance payout if MEC did not apply for an extension to his layoff.

“Without a variance, if an employee on a temporary layoff is not recalled prior to the 24 week cutoff, the employment of the employee will be deemed terminated. Unless a statutory exception applies, the employee will then be entitled statutory pay in lieu of notice of termination pursuant to the Employment Standards Act (which may include both individual and group notice, depending on the circumstances) …” says the group’s Labour and Employment blog.

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A number of other long-term staff from the Vancouver area have reached out to MEC, saying after eight, 10, 15 and 25 years of service they were let go Thursday without any compensation.

Incoming MEC CEO, Eric Claus, provided an emailed statement but has not responded to requests about how firing decisions were made, which roles were eliminated or how many jobs in total were terminated.

“As we have dug further into the details and had discussions with landlords, vendors and other stakeholders, we see even greater opportunity for the stores than we did before. Our plans now involve operating all but one of MEC’s current 22 stores – four more than we had initially planned. We also plan to retain more staff than initially planned, and now expect to have more than 85% of MEC’s active workforce continuing with us as we go forward.

As we said when this purchase was announced, we see great potential to make MEC better than ever, and our decisions on an increased store and employee count reflect that potential,” reads the statement.

-With files from Renee Bernard