Lawyers for former Hudson's Bay employees seek court approval for hardship fund
TORONTO — Legal representatives for ex-Hudson's Bay staff are requesting court approval for two innovative measures to assist employees affected by the department store's demise. The Ontario Superior Court is set to consider a motion filed by Ursel Phillips Fellows Hopkinson LLP, which proposes the establishment of a hardship fund and an agreement to support workers on long-term disability benefits.
The hardship fund aims to provide relief to former Hudson's Bay Company (HBC) workers and retirees who have been struggling to cover essential expenses like rent, mortgages, utilities, car loans, and medical bills since the store's collapse last year. If approved, eligible workers could receive a one-time payment of up to $9,600, with additional support of up to $2,500 for those facing medical or other emergencies.
The fund's financial backing will come from three sources: a Zellers health and welfare trust valued at approximately $9.9 million, an HBC reserve fund worth around $1.6 million, and $250,000 currently held by the department store. It's worth noting that HBC acquired Zellers, a former discount retailer, in 1978 but later sold the rights to the name.
In addition to the hardship fund, the lawyers are seeking court approval for a lump-sum termination payment for former HBC employees whose long-term disability benefits were suspended in June. The law firm negotiated for continued payments and proposes a lump sum that will provide financial security and stability for many recipients until they reach the age of 65.
This agreement, according to lawyer Susan Ursel, will significantly aid vulnerable employees who are unable to find alternative employment due to their disabilities and were facing the immediate loss of their primary income source. When Hudson's Bay, Canada's oldest department store, filed for creditor protection and closed all its locations last year, it employed 9,364 people across 96 stores and four distribution centers or the company's headquarters.
Only eight employees remain with the retailer, which is still undergoing liquidation through court proceedings. Since the HBC's collapse, workers have encountered challenges with income and benefits, termination pay, severance amounts, parental leave top-ups, and various other financial perks. Approximately 188 employees and retirees were covered by long-term disability plans funded by HBC's general revenues and administered by Manulife, according to court records.
