Former Sears employees fume at possible sale
NDP calls for pension protection at stories including Ancaster
TORONTO — Dozens of former Sears Canada employees packed a Toronto courtroom Thursday to hear the retailer ask for approval to kick-start the process of putting itself up for sale while it is under creditor protection.
“I’m in total shock this happened,” said Zobedida Maharaj, outside the Ontario Superior Court, before a judge gave Sears the green light to immediately proceed with reaching out to potential buyers while it’s under creditor protection.
Maharaj, 53, said she worked at Sears Canada for 28 years before she was laid off at the end of March when her store was closed.
The senior manager of operations and merchandise said she was initially told she would get eight weeks of severance and benefits, but was cut off June 22 when the company secured temporary court protection from creditors.
“It’s like getting slapped in the face.”
NDP pensions critic Paul Miller criticized Premier Kathleen Wynne and her Liberal government for not doing enough to protect pensions amid the Sears closures.
The NDP is pushing for legal changes that would force major employers like Sears and U.S. Steel that go bankrupt to first pay pensions to current and former employees, the Hamilton East-Stoney Creek MPP said in a news release.
“Big corporations should not be allowed to abandon their pension obligations to Ontario workers.”
Miller said the NDP put forward a motion asking Wynne to press the federal government to change the law to force companies to pay out pensioners first upon liquidation of assets.
The provincial Liberals agreed but didn’t take action, he said.
“Once again the Wynne Liberals are putting the interests of corporations ahead of the interests of Ontario workers. That’s not leadership,” said Miller.
Wynne’s office didn’t respond to a request for comment Thursday.
The Sears in Ancaster is one of the 59 stores expected to close in the court-supervised restructuring.
Store sales manager Joy Zecca declined to comment on the compromise reached by lenders and lawyers in Superior Court Thursday.
But Zecca noted 25 employees at the location holding full- and parttime jobs will lose their jobs.
“Unfortunately, people have lost their jobs, but hopefully there’s going to be a comeback.”
Zecca expressed frustration at critics who are “bashing” the department store chain.
“If you sit back and really take a look at the situation, what else is there to do, they’re trying to stay alive and stay afloat.
“I want Sears to survive,” Zecca also said.
Lawyers for Sears Canada, its lenders, retirees and former employees were before Judge Glenn Hainey to discuss, among other issues, whether the department store owner should be permitted to proceed with a sale.
Sears Canada wants to close dozens of stores in the coming weeks as it negotiates with potential buyers who might acquire some or all of the company’s remaining assets, pending court approvals.
Earlier in the day, Sears Canada struck a deal over benefit and pension payments to retired employees. The retailer had initially asked the court for permission to immediately halt payments for pension, health and dental benefits for former employees, retirees and surviving spouses due to a severe cash crunch, but later agreed to continue payments to retirees until Sept. 30.
In separate documents filed by Sears Canada’s lawyers prior to Thursday’s hearing, Sears Canada’s chief financial officer says it’s “crucial” to begin liquidation sales of inventory no later than July 21 and completing them by Oct. 12. Hainey is expected to hear that motion Tuesday.
The Sears outlet in the Cambridge Centre mall is among the stores that will close. It has 10 fulltime and 63 part-time employees.
Many former employees, who were asked to leave the courtroom after officials deemed the crowd size was causing a fire hazard, said the company’s compromise on temporarily paying retiree benefits and pension compensation has them cautiously hopeful.
Pina Rupa, 58, of Vaughan, said outside the courthouse she was angry Sears Canada paid her no severance after she worked there for nearly 40 years.
“I was such a loyal employee,” said Rupa, who was laid off from the company’s head office.
Peter Myers, a brother of actor Mike Myers and star of a recent Sears TV ad, also lost his job and was present at the hearing.
Employment lawyer Susan Ursel, whose firm represents more than 17,000 non-unionized former and current employees, said it is filing motions to ask the court to reinstate benefit, severance and pension payments to the workers who were laid off. It is also asking to set up a temporary hardship fund for those who are in dire need of cash and health benefits.
In addition to the job cuts at its head office, Sears plans to lay off more employees as it shutters 59 locations across the country.
Sears Canada had announced in June that in addition to the store closures, it was cutting approximately 2,900 jobs as part of a restructuring under the Companies’ Creditors Arrangement Act.
Wynne said her government is paying close attention to the situation, but there isn’t a role it can play at this point.