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As Canada faces the biggest private-sector closure in recent history, the terms of severance are still to be determined for 17,600 Target workers who will soon be out of a job.
When Target Canada announced that it would be closing its 133 Canadian stores and letting go 17,600 workers, the company said it was seeking the Court’s approval to create a $70 million Employee Trust fund to ensure that almost all employees “receive a minimum of 16 weeks of compensation, including wages and benefits coverage for employees who are not required for the full wind-down period.”
“The plan is that everyone who is an employee of Target as of the filing date, January 15, will get a minimum of 16 weeks notice,” explained Susan Philpott, a partner at labour law firm Koskie-Minsky.
When Target filed for protection from creditors under the Companies’ Creditors Arrangement Act (CCAA), Koskie Minsky LLP was appointed by the Court to represent all employees in the CCAA Proceedings during the company’s wind-down.
As Philpott explained, 16 weeks of notice could mean different things for different workers. Some Target workers will continue to work and get paid their regular wages. Others may be let go early, at which point their wages will be drawn from the Employee Trust established by Target.
If a worker is entitled to more than 16 weeks under statutes in their province or under a specific employment agreement, then they will get a higher amount depending on their circumstances.
Employees at the distribution centres used by Target are run by Eleven Points Logistics, so workers there are not Target employees and will not be covered by this fund.
According to the CBC, Target Canada’s former CEO Gregg Steinhafel received almost the same amount as will be in the trust last year, when he left the company shortly after a major security breach, in which the personal information of over 70 million customers was leaked.
The CBC also reports that Target managers will receive bonuses of up to $30,000 for overseeing store closures, while most Target employees will continue to work during the wind down and receive nothing at the end.
“There’s a long process and there will be employment based issues throughout,” said Philpott. “We’ve probably had 300-400 inquiries from people about what they are going to get, and how they are going to be calculated, and how long they will be kept on and what happens if they are sick. There’s a variety of questions and we are engaged to help employees through those questions.”
After the closure
Unifor, one of Canada’s biggest private sector unions, has also voiced its concern over what will happen to former Target workers.
“Many Target workers who have just lost their jobs won’t even qualify for unemployment insurance,” said Unifor National President Jerry Dias in a press release on the day the closure was announced.
The Employment Insurance system is designed to support workers who had been working full-time permanent positions. Retail workers who often work part-time and irregular hours will likely not meet the high qualifying thresholds, which can be as high as 910 hours over 52 weeks, depending on a worker’s experience and location.
Unifor is urging Federal Minister of Employment Jason Kenney to provide emergency access to Employment Insurance benefits for Target workers who won’t otherwise qualify.
“Workers have paid into EI, but when they need it most, they are shocked to find they don’t qualify,” said Dias, “Minister Kenney has authority to modify the EI rules for pilot projects and emergency situations, and I urge him to take immediate action for the Target workers.”
Unifor says that the emergency access should be followed by legislative changes that allow all workers in Canada to qualify for EI Benefits after a uniform 360 hours of work in the preceding 52 weeks.
This would allow precarious and part-time workers, such as those being laid off by the closure of other American retail stores like Jacob and Mexx. Target is only one of many retailers to close Canadian stores in the past year.
Ella Bedard is rabble.ca’s labour intern. She has written about labour issues for Dominion.ca and the Halifax Media Co-op and is the co-producer of the radio documentary The Amelie: Canadian Refugee Policy and the Story of the 1987 Boat People.