Former Sears em­ploy­ees fume at pos­si­ble sale

NDP calls for pen­sion pro­tec­tion at sto­ries in­clud­ing An­caster

The Hamilton Spectator - - BUSINESS - LINDA NGUYEN AND DAVID PADDON

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.

FRANK GUNN, THE CANA­DIAN PRESS

Dis­grun­tled Sears em­ploy­ees gather out­side the On­tario Su­pe­rior Court in Toronto Thurs­day after many had to leave due to fire reg­u­la­tions.

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