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Hudson’s Bay accused of shorting employees’ severance pay amid coronavirus pandemic

Toronto-area Hudson’s Bay employees get pay cut, are then laid off
WATCH ABOVE: A Toronto lawyer says Canada’s oldest company acted in bad faith when it asked employees to accept a pay cut and then terminated them the next day. HBC denies wrongdoing. Sean O’Shea reports.

A Toronto employment lawyer is alleging that the Hudson’s Bay Company short-changed more than 90 employees on severance benefits, one day after the retailer asked the workers to accept a 25 per cent pay cut as a result of the coronavirus pandemic.

“HBC is seeking to avoid paying fair severance packages that are legally owed to these individuals during these difficult times,” said Lior Samfiru, partner with Toronto-based Samfiru Tumarkin LLP, an employment law firm.

Samfiru says 94 employees working in management and administration roles in the Greater Toronto area are affected. Some who consulted the law firm were given a severance deadline of Friday, April 24, he said.

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According to Samfiru, the temporary pay cuts took effect on April 16. The next day, the employees were suddenly terminated, he said. The severance packages offered to employees were based on their newly reduced salaries, instead of the pre-reduction ones, he claims.

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The difference could add up to months of severance in some cases, said Samfiru, who described the move as “unconscionable.”

“A large organization like that cannot plead ignorance, they should know better,” said Samfiru, who explains that such action would violate common law in Canada.

“I would have expected much better,” of the Hudson’s Bay Company, said Samfiru, especially for an organization with deep roots to Canadian identity.

The company, founded in 1670, is Canada’s oldest retailer and one of the nation’s oldest incorporated companies. It is now owned by NRDC Equity Partners, a private investment firm based in Purchase, NY.

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When contacted by Global News for comment, the Hudson’s Bay Company denied any wrongdoing.

“We believe the allegations shared with the media are false,” according to a brief statement from company spokesperson Tiffany Bourré, deputy vice president of communications and heritage for HBC.

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“We are committed to treating all associates fairly and with respect,” she concluded.

Bourré did not discuss terms of the severance offers to the staff members.

As a result of the COVID-19 pandemic, some companies are asking their employees to accept temporary pay cuts. But unless the employer spells out how long the reduced pay will last, it might be permanent.

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“Make sure you tell your employer, in writing, that you are only agreeing to this given the current pandemic and for a limited time and you’re not agreeing to any future pay cuts,” said Samfiru.

“Unless there was an agreement in place … if you’re taking a pay cut now you cannot assume automatically that once the pandemic is over your pay will go back to normal. That is not an assumption anyone can make.”

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As for the Hudson’s Bay Company issue, Samfiru says he hopes the company will revise its severance package offer to employees so legal action is not necessary.