Improving Canadian bankruptcy law amid the Bay creditor protection: Lior Samfiru with Law360

Interview Summary

As Hudson’s Bay announced it was liquidating all but six stores across the country, many former employees are concerned about their entitlements. Typically, employees are still owed severance pay when a business shuts its doors. This is not the case for companies who have filed for creditor protection.

Lior Samfiru, an Ontario employment lawyer and Co-founding Partner at Samfiru Tumarkin LLP joined Law360 Canada to discuss employees’ rights when a company files for bankruptcy.

Interview Notes

• Employees failed by current legislation: Samfiru commiserated with former HBC employees who won’t receive any severance. “It’s a devastating blow, especially for the thousands of long-service employees who’ve dedicated years — even decades — to the company,” said Samfiru. “They’re being left out in the cold, while a handful of executives walk away with bonuses for overseeing the wind-down. It sends a terrible message.”
• The Sears Act: After Sears filed for bankruptcy in 2017, Samfiru pushed for employees to be given protected status. “The proposal calls first for employees to be given priority status in a bankruptcy proceeding, making them secured creditors like banks and other lenders so they’re not last in line for compensation,” Samfiru explained.
• Need for reform to Canadian laws: The Sears Act unfortunately did not pass, but Samfiru continues to urge for change. “Here in Canada, employees go from having clear legal rights to hoping for scraps. It’s an outdated system that routinely lets major employers off the hook, while loyal employees are left behind.”

Related Resources

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

• Employee rights when companies file for bankruptcy
• Severance pay entitlements