Judge OKs revised Sears Canada bonus plan to keep key staff through liquidation
David Paddon, The Canadian Press
Published Wednesday, October 18, 2017 4:03AM EDT
Last Updated Wednesday, October 18, 2017 4:15PM EDT
TORONTO -- An Ontario judge has approved Sears Canada's request to reduce its retention bonus for about three dozen head office staff who will stay through the retailer's liquidation process, which begins its next phase on Thursday.
The total amount that could be paid under the retention plan for head office executives and staff has been cut by $1.1 million following a number of departures, which has reduced the number of eligible employees to 36 from 43. That is down from a total pot of $7.6 million when the insolvent retailer's restructuring process first began in June.
But some of the retailer's former employees said after Wednesday's hearing that they think too much money and time are being spent to coax executives to stay.
"I'm really upset. Really upset. I'm upset," said Mina Iannino, who struggled to express her "disgust" with the way employees have been treated during the Sears Canada windup.
The employees who are being kept for the liquidation "should just walk out and leave this company high and dry and to lose something," Iannino told reporters.
Jennifer Holder, a laid-off cosmetics sales person, said she "cannot believe that they're still worried about securing bonuses for executives when the employees are looking at going through a Christmas season with no real job."
"Everything they're doing in this process is to secure themselves some form of a bonus, when everyone else is looking at unemployment, (and without) enough money in the hardship fund to take care of employees across Canada."
Under the court-approved employee retention plan for Sears Canada, executives would forfeit their bonus if they leave voluntarily or are fired "for cause" -- a legal term meaning some sort of contract violation or wrongdoing.
Key head office employees can earn their bonuses if they stay with the company until next March or April, depending on the person.
Before granting the company's revised retention bonus plan, Justice Glenn Hainey got assurances that there are no additional funds being approved beyond the $7.6 million that was originally approved for head office bonuses.
About half of the original bonuses for head office executives have been used up since Sears Canada entered court protection in June. That would have left $3.9 million in the bonus plan prior to Wednesday's court approval, but now only $2.8 million will be allocated for the remainder of the windup.
The retailer currently has 74 full department store locations, eight Sears Home Stores and 49 Sears Hometown stores, which all face closure.
Wednesday is the last day Sears Canada will honour extended warranties as the retailer prepares to start liquidation sales Thursday.
Sears Canada said earlier this week that only customers who bought a protection agreement within the past 30 days could get refunds from paying for extended coverage.
It said most merchandise it sells comes with a one-year manufacturer's warranty, which will be available to customers directly from the manufacturers.
The company said it still looking for a buyer for its repair business, but it's not known if a sale will go through or under what terms the repair service would operate.