Metroland eliminates 605 jobs, enters bankruptcy and stops print editions

In a significant restructuring move, Metroland Media Group is laying off 605 employees and ending the print edition of its community newspapers, as it seeks creditor protection under the Bankruptcy and Insolvency Act.

Metroland is owned by NordStar Capital, which also owns the Toronto Star newspaper. The Toronto Star is not part of the restructuring.

More details: The terminations represent 60% of Metroland’s total workforce.

• One third of the 605 employees losing their jobs work at the company’s flyer distribution operations. 501 of those workers are non-unionized, while the remaining 104 are unionized employees.
• One third of the people being put out of work are part-time employees.
• An FAQ prepared by Metroland says they will not provide severance pay because “the Company does not have sufficient funds” and that “Affected Employees will have the opportunity to file a claim in the course of the restructuring process for the amounts that they are owed.”
• Metroland is exiting the flyer delivery business.
• These decisions are driven by unsustainable financial losses attributed to changing consumer and advertiser preferences.
• The media industry has been grappling with challenges, primarily due to digital tech giants dominating advertising revenue in Canada.

Impact of COVID-19: The decline of the print and flyer distribution business was significantly accelerated by the COVID-19 pandemic.

• Both readers and advertisers reduced their usage of flyers as a marketing vehicle during the pandemic.

Transition to Digital Only: Metroland’s community publications will transition to a digital-only model.

• The move reflects the company’s adaptation to the changing media landscape and consumer behaviours.
• The company’s six daily newspapers, including the Hamilton Spectator, Peterborough Examiner, St. Catharines Standard, Niagara Falls Review, Welland Tribune, and the Waterloo Region Record, will continue to be available in both print and online formats.

Challenges in the Media Industry: Media outlets have faced ongoing challenges as digital giants like Google and Meta have dominated the advertising landscape.

• The passage of the Online News Act in Ottawa earlier this year aims to compel digital giants to pay media outlets for content they use on their platforms.
• In response, Meta and Google announced their intention to block content from Canadian news publishers on their services before the law takes effect.
• Talks between NordStar and Postmedia earlier this year regarding a potential merger fell through.

Severance pay for Metroland Media Group employees

Metroland is seeking creditor protection under the Bankruptcy and Insolvency Act. If it is approved, Metroland will likely not have to provide full severance pay to those non-unionized employees who lose their job or are laid off.

A full severance package can be as much as 24 months’ pay, depending on numerous factors.

Bankruptcy laws in Canada allow companies to favour secured creditors (i.e. banks) over unsecured creditors (employees). This means that any money that a bankrupt company has left or generates through the liquidation of assets will go to secured creditors first, and employees must wait for whatever is left at the “back of the line.” As a result, non-unionized workers at Metroland will likely receive little to no severance pay.

What happens if Metroland doesn’t file for bankruptcy?

If Metroland ultimately does not file for bankruptcy, former employees will have the ability to pursue a full severance package.

LEARN MORE
• Nordstrom closing all Canadian stores, no ‘realistic path to profitability’
• Instant Brands goes bankrupt in Canada
• David’s Bidal declares bankruptcy: what that means

Who’s the boss?

Metroland employees who lose their job through this bankruptcy might have a claim to full severance pay if the following factors are met:

• The employee can establish that they were doing some work for parent company Nordstar, even though they were paid by Metroland.
• Metroland and Nordstar had common control over the employee in the course of their duties.

Sears Act

Samfiru proposed the Sears Act in 2017 in an effort to secure more appropriate severance packages and financial support for non-unionized employees when their employer declares bankruptcy.

This would be achieved through legislation that would amend Canada’s bankruptcy laws to identify employees as secured creditors, entitling them to more generous severance pay when their employer goes out of business.

Severance when bankruptcy isn’t declared

Non-unionized employees in Canada are entitled to full severance pay when they lose their job due to downsizing or corporate restructuring, so long as the company doesn’t declare bankruptcy.

This applies to individuals working full-time, part-time, or hourly in Ontario, Alberta, and B.C.

To figure out how much compensation you could be entitled to, use our firm’s free Pocket Employment Lawyer.

LEARN MORE
• Severance packages in mass layoffs
• Rights to severance for provincially regulated employees
• Severance pay in a recession 

WATCH: Employment lawyer Lior Samfiru explains everything you need to know about severance pay on an episode of the Employment Law Show.

Received a severance offer? Speak with an employment lawyer

Before you accept any severance offer, have an experienced employment lawyer at Samfiru Tumarkin LLP review it and your employment contract.

We can tell you if what you have been provided is fair and how to get proper compensation if it falls short of what you are actually owed.

If you aren’t given the full amount, which happens often, you have been wrongfully dismissed and are entitled to compensation.

Non-unionized employees in Canada have up to two years from the date of their dismissal to pursue a claim for full severance pay.