Loblaw laying off 500 workers: Two important severance facts

Loblaws Lays Off 500, Closing 22 Stores

Loblaws is eliminating around 500 jobs in an effort to contain costs.

Loblaw Companies Ltd. confirmed the news Monday, Oct. 16th. Cuts being made in corporate offices include executives, management and employees. The affected positions are connected to Loblaws, Shoppers Drug Mart, No Frills, Joe Fresh and Zehrs.

On Nov. 15, the grocery giant finalized a plan to close 22 unprofitable stores across a range of formats, ahead of what Loblaw believes will be a challenging 2018. The company did not immediately confirm whether the 500 layoffs in October encompassed the job losses from the upcoming store closures.

• Loblaw To Close 22 Stores, Launch Home Delivery

Kevin Groh, spokesperson for Loblaws, explained in a statement that the job losses were not triggered by any one factor, including a $15/hour minimum wage in Ontario and Alberta – provincial policies that are expected to increase the business’ labour expenses by $190 million in 2018.

Memo to Loblaws Staff

A memo sent to staff by Sarah David, president of Loblaw Companies Ltd., said that the decision was made to focus on bringing costs under control.

“These decisions are difficult but necessary. Our business is at an inflection point, with growing pressures – from new costs and new competition – and with many opportunities to grow and evolve. As always, we continue to focus on our future,” the memo read.

According to Groh, Loblaws is directing their attention to digital initiatives and online commerce.

Two Key Severance Facts

This news concerning Loblaws employees highlights two very important facts where employee severance is concerned.

1. You Are Likely Owed More! Around 90% of employees are wrongfully dismissed when they are terminated from their job. In other words, 90% of people who are let go are not offered the severance that they are rightfully owed.

Often times, employers count on the fact that their employees may not know what their full severance entitlements are. Employees are offered inadequate severance, with a (meaningless) deadline that exists only to pressure the employee into signing away their opportunity to have the offer reviewed. Common law severance pay is based on several factors, including age, years of service, and position. Based on those factors, and more, severance entitlements can amount to as much as 24 months’ pay.

• The Truth About Severance Pay Deadlines

2. A Company’s Finances Will Not Impact Amount of Severance. A company’s financial situation will not be considered by the courts when determining a terminated employee’s severance package. Companies that are struggling financially will often argue that due to financial difficulties, they are unable to pay full severance. This is an excuse that will not hold water.

Keep in mind that once you sign a severance offer presented by your employer, you have accepted their terms and cannot seek help from our employment lawyers in employment lawyers in Ontario, Alberta or B.C. to obtain your full entitlements.