Severance for Nordstrom Employees Unlikely: Employment Lawyer on CTV News

Interview Summary

Nordstrom has announced it is shutting down its 13 stores in Canada and laying off 2,300 employees. A major business closure leads to many questions surrounding employee rights and entitlements. Do the financial difficulties of a company influence what employees are owed?

Lluc Cerda, an employment lawyer and Senior Associate at Samfiru Tumarkin LLP joined CTV News Channel to discuss what needs to change to in order ensure that Canadians are given proper compensation when a business goes under.

Interview Notes

• Impact of bankruptcy on severance: Due to Nordstrom filing for bankruptcy protection through the Companies’ Creditors Arrangement Act (CCAA), the company’s employees are unlikely to see any compensation. In the event of bankruptcy, companies must first pay their secured creditors.
• Likelihood of Nordstrom employees getting severance: It is unlikely for former Nordstrom employees in Canada will get any severance pay unless perhaps another company restructures or buys Nordstrom’s business.
• Sears bankruptcy and influencing factors: In order to offer employees more protection, particularly those in a retail environment, the government would have to ensure that severance payments are considered secured, much like other creditor payments. Samfiru Tumarkin LLP urges the federal government to enact the Sears Act.