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The Sears Canada Layoff Fiasco

In a separate post on Goodman Elbassiouni LLP’s blog this month, we talked about employment law in Canada and the human rights policies that will typically ensure that workers are protected to some degree or another when they are laid off. As workers compensation lawyers who specialize in cases filed through the WSIB, we see a lot of big companies trying to take advantage of their workers. As a result, we’ve grown very passionate about making sure that hardworking Canadians receive what they are entitled when they are injured or terminated. An extremely interesting situation that has arisen recently is the announcement from Sears Canada that they are terminating 2,900 members of its staff, which comes out to 17% of its entire work force. Because Sears seems to be a sinking ship heading towards bankruptcy, they are trying their best to sidestep regulations that would oblige them to pay out benefits – especially outstanding pension benefits – to its many, many outgoing employees.

While we recognize that Sears is in a difficult position, our loyalty certainly lies with the laid off workers, who may not get the severance packages that they so obviously deserve. This whole fiasco is tied up with the fact that Sears has filed for creditor protection as it attempts to revitalize its flagging fortunes. As this whole mess gets sorted out, salary and severance continuances will be off limits to terminated workers, with Sears under court protection.

Allegedly, Sears’ pension fund is sitting at an abysmal $267m deficit, and the company would need to add $3.7m to it every month in order to make it up. Not only is it irresponsible to deprive loyal employees or their rightful pension, it also goes against the traditional expectations of security that comes along with having a long and dedicated career with a large company like Sears.

It has also been reported by the CBC that Sears has budgeted $7.6m to pay out to 43 executive managers across the country in bonuses. Naturally this has enraged workers who are not getting what they feel is their fair treatment. Here at Goodman Elbassiouni LLP in Toronto and the GTA, we understand the complexity of the situation, but it’s difficult not to side with the laid off workers in this scenario. Depending on how the creditor protection policy shakes out, there could be many ex-employees filing for compensation – and they might just have a good case.

More than anything, this whole situation is a sign of the times. In our changing economy, what has been traditionally reliable retail business is being undercut by online retailers like Amazon, who offer affordable prices and do not have to pay the costs associated with a brick and mortar space. Throughout the twentieth century, people could rely on a steady wage and solid pension if they dedicated themselves to a long career working for a large name retailer. With so many businesses switching to the Ecommerce universe, times are tough for brick and mortar businesses. The paradigm is shifting, and this shift is also opening up new frontiers in the legal realm that we find fascinating – but that’s a subject for a later post.

In the meantime, if you need a slip and fall lawyer you know you can count on, give us a call. Our experts are always happy to help!


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