Hudson’s Bay offers bonuses to executives but no severance for employees: Employment lawyer on 640 Toronto

Interview Summary

While layoffs have already begun at Hudson’s Bay due to its recent filing for creditor protection, news has broken that managers and executives within the company have been offered a total of $3 million in retention bonuses. This is despite the refusal to pay severance for the majority of staff. Do former employees have any legal standing to pursue severance entitlements under these circumstances?

Jon Pinkus, an Ontario employment lawyer and Partner at Samfiru Tumarkin LLP joined John Oakley on 640 Toronto to discuss employee rights as a company files for bankruptcy and more.

Interview Notes

• Offering retention bonuses: Pinkus noted that offering retention bonuses is quite common.”You still need the captain of the ship, so to speak, to bring the organization to a close. But optically it looks horrendous when there are so many people receiving no severance whatsoever,” said Pinkus.
• Discrepancies in bankruptcy filings: “This is a national issue and this is a national statute,” Pinkus explained. “Years ago there was an effort to change how these worked through the Sears Act. This was a Bill to make employees secure creditors and hold executors personally liable for unpaid severance.”
• Questionable ethics in company decisions: Pinkus questioned the possibility that these actions were illegal. “This is a question of optics if anything. There is nothing we can hold them accountable for under the current legal framework.”
• Monitoring profits for employee protections: “In the context of a company that is contemplating bankruptcy it hardly comes into the picture,” Pinkus explained. “The priority is to see whether or not they can keep the business alive but they have nothing to worry about. Employees are, by design, going to get short-changed.”
• Employee rights to liquidation or any other assets: Pinkus noted that unfortunately, former HBC employees won’t receive anything until all secure creditors are satisfied. “It is mostly the case that a company goes into this type of proceeding, the employees will get compensation under the wage earner protection program.”
• Similarities to Sears closure: “In many ways, this is the same situation. You had workers with decades of service who were not given any severance, and a handful who were given bonuses to manage the winding down of the company,” Pinkus stated.

Related Resources

For further insights and discussions related to employee rights, explore the following resource:

• Hudson’s Bay liquidates all but 6 stores