Court to decide on worker compensation as benefits end and $30m brand sale moves toward approval
More than 8,300 Hudson’s Bay Co. employees will have been terminated without severance pay by the time liquidation sales end this Sunday, The Globe and Mail reports.
The court-supervised wind-up marks one of the largest mass job losses in Canadian retail in years and raises significant implications for benefit and pension continuity.
The retailer is scheduled to return to court on Tuesday, June 3, to seek an order enabling terminated workers to receive payments through the federal Wage Earner Protection Program.
The program offers a maximum payout of $8,844.22 per employee, according to law firm Ursel Phillips Fellows Hopkinson LLP, which was appointed as representative counsel for affected staff.
Court filings from Monday confirmed that long-term disability benefits for about 189 current and former employees will end June 15.
These benefits were paid directly by the company under an “administrative services only” (ASO) plan.
Another 100 to 200 individuals, covered under an insured plan, will continue receiving benefits.
In addition to those losing disability support, roughly 2,200 retirees had their health and dental coverage and life insurance policies terminated on April 30.
Michael Culhane, Hudson’s Bay chief operating officer and chief financial officer, stated in a court affidavit that discussions are ongoing with lenders and employee counsel to explore a “hardship fund or structure” to provide financial support to employees affected by the benefit losses.
Lawyer Susan Ursel also noted the parties are examining “other avenues of alleviation.”
Margaret Henry, a Unifor representative and long-time employee at the e-commerce distribution centre, described the federal compensation as “nothing compared to what we are owed.”
Henry said nearly 200 colleagues had been laid off since May 1 and added, “They did it, they worked hard. They deserve their severance, at least.”
The company filed for protection under the Companies’ Creditors Arrangement Act (CCAA) on March 7.
Unifor, representing about 600 employees across the distribution centre and stores in Mississauga and Kitchener, held rallies in Toronto and Windsor on Tuesday calling on Hudson’s Bay to honour existing severance agreements.
Henry said of the process: “As far as we are concerned, the legislation is not for us. It is for the owners, and the creditors. Not for us.”
Store closures have proceeded gradually based on location schedules, with all 96 outlets set to shut by June 1.
Starting next week, 1,107 remaining staff will assist in closing procedures, including the removal of fixtures. Another 900 workers will lose their jobs by June 15, while the final team stays on to complete the wind-up.
Alongside the layoffs and benefit terminations, Hudson’s Bay has also finalized a $30m agreement with Canadian Tire Corp. to sell its intellectual property.
Court documents filed Monday revealed that the deal, reached May 15, covers trademarks including the Hudson’s Bay name, HBC and The Bay logos, and defunct brands such as Home Outfitters.
Slogans like “The Official Store of Christmas” and “More than you came for” are included, along with private labels such as Distinctly Home, Hudson North, Black Brown 1826, and Nordic Fleece.
The sale also includes domain names and social media account identifiers. It does not include the Zellers brand, relaunched in 2023.
Canadian Tire will also acquire rights to a collection of historic designs for Hudson’s Bay point blankets and the trademark for the 1670 Royal Charter, though the charter itself remains part of a separate auction still in development.
According to the affidavit, Hudson’s Bay received 17 bids for assets, including 13 for intellectual property. The board and its adviser Reflect Advisers LLC evaluated offers based on price, liability assumptions, financing commitments, and likelihood of closing.
Culhane stated the Canadian Tire bid will allow the legacy trademarks to continue under another major Canadian retailer.
Pending court approval, the deal is expected to close by mid-July.
