Hudson’s Bay Co., facing closures of most of its 96 stores by June’s end, plans to grant up to $3 million in retention bonuses to 121 managers and executives. However, the over 9,300 workers, many facing job losses, will not receive severance. This decision has drawn criticism from labor activists and employees.
Canadian Labour Congress president Bea Bruske expressed dismay at the situation, calling it “incredibly egregious” and urging fair distribution of the $3 million among all workers. Kevin Grell, a Toronto-based Bay online distribution site employee, shared his distress upon learning about the bonuses, expressing concerns about potential job loss.
The company, which recently sought creditor protection to restructure, initiated liquidation sales at all but six of its Bay and Saks-branded stores. Court documents reveal that Hudson’s Bay will allocate the bonuses to 94 store managers and 27 non-store staff, with senior leadership staff set to receive the largest shares.
Legal expert Adrian Ishak explained that offering retention bonuses during bankruptcy or restructuring is a standard practice to retain key personnel essential for the company’s reorganization efforts.
Despite inquiries, Hudson’s Bay did not comment on the retention bonuses or severance. The retailer clarified that laid-off workers would not receive severance but might access financial support through government programs like the Wage Earner Protection Program.
Andrew Hatnay, a lawyer representing Hudson’s Bay employees, highlighted the distress among workers due to the absence of severance payments, emphasizing its significance as a safety net during challenging economic times.
In the past, Sears Canada faced similar criticism for not providing severance to workers while granting substantial bonuses to executives. This situation led to legislative changes enhancing protections for workers with defined benefit pension plans in case of employer insolvency.
Bruske emphasized the need to prioritize workers’ rights, especially concerning severance pay, urging voters to consider worker protections in upcoming elections. Conversely, Ishak cautioned that altering payment priorities in bankruptcy cases could deter lenders, hindering companies’ growth prospects.
