After hearing the news that long time retailer Hudson’s Bay Company declared bankruptcy, my mind immediately went to the employees at HBC. The part timers. The full timers. The seasonal employees. The student employees. The “lifers”. The night shift employees. The early birds who stock the shelves. The office workers. The shipping and receiving crew. The janitorial staff. Everyone who makes the stores work.
I know that life well.
Before I became a personal injury lawyer, I worked retail at Sears Canada while I was in undergrad at York University. I worked in the hardware department and in the paint department. I saw the ins and outs of a large department store. I learned all sorts of things about paint, tools, brushes, stains, lawnmowers, power washers, dehumidifiers…. You name the home appliance/tool, I knew about it.
But, more importantly, I learned a lot about people from all walks of life, and how large publicly traded companies work and treat their workers.
When it comes to people, large department stores cater to EVERYONE. They don’t discriminate. A paying customer is a paying customer! New Canadians. Old stock Canadians. Affluent people with beautiful homes. Non-affluent people who are trying to make ends meet. People out there hustling for a dollar. People without a home trying to build a shelter (remember, I worked in the hardware department so we had people looking to build spaces to live). We had hustlers coming in week after week checking out the prices on high priced power tools. Some trying to steal those power tools and sell them on the black market. Others looking for sales on items which rarely go on sale; and then trying to return those items at regular price in order to make a few bucks. It was a real eye opener into human behaviour.
But it was how Sears treated it’s employees which really got to me. This is coming from a guy who was making $8.13/hr on a 4 hour shift ($32.52 for a shift, less deductions!).
The full time employees at Sears were promised benefits and a pension. If they worked hard, and worked at Sears long enough, they had a safety net which they could rely on in the event of injury, illness or disability. They could also rely on their pension on retirement.
But, Sears Canada declared bankruptcy. What happened to that safety net for disability or pension payments. Would it hold true and would payments keep coming in?
Nope!
It was the workers who got the shaft. Health benefits and disability benefits were cut. The plans were underfunded. Pension benefits were reduced significantly. There goes the retirement plans.
The same thing is happening here to the employees at The Bay. The Bay privately funded it’s long term disability program for its employees. That means that it paid out the benefits due and owing to those who qualified for long term disability benefits. While The Bay may not have administered or adjusted the claims, it did have the responsibility of paying them out.
The benefits and pensions of Bay employees will get completely cut, or reduced to an insignificant number in order to pay off company debt (which the employees didn’t have any control over).
Bill 14 was supposed to change all of that. It was intended to protect workers and their benefits; so that their pensions and benefits wouldn’t get cut in bankruptcy proceedings of a large company. But, Bill 14 never received Royal Ascent, meaning it never made it to law. That means that workers keep on getting screwed over by these bankruptcies. Disabled workers, and those relying on company pensions are the most vulnerable in these bankruptcy proceedings. They are the human toll to the bankruptcy itself.
How can an employee safeguard against their disability or healthcare benefits getting cut? That’s a good question.
For starters, you have to consider that benefits are temporary. They are only there, until they are no longer there. Even a unionized employee can have their benefits cut, or terminated, if the union and management make a deal. Benefits come, and they go. Company benefits aren’t what they used to be. They are only as strong as they company; yet even a strong company can slash or terminate benefits on a whim; particularly in a non-unionized environment.
The lessons learned from the Sears Canada bankruptcy, and from the Hudson’s Bay bankruptcy are that you can’t count on your company to back you up, and support you. The company is going to look out for their needs first and foremost. The needs of the employees, particularly their pensions and benefits are an after thought and get lost in other big ticket items when it comes to payouts. If you can afford it, fund your own private disability benefits and/or health benefits plan. It won’t get pulled out from under you when there is a change in management, ownership, or when the company starts to struggle financially. The insurance will follow you from employer to employer, so long as you continue to fund the plan by paying premiums. The insurance will also be more flexible in terms of what you want covered, or don’t want covered. You can build the insurance plan which best suits your needs, rather than a plan which the company has chosen for all of it’s employees. These plans give you more control, and greater peace of mind. You won’t be a victim to what the company does, or doesn’t do. The problem with these plans isn’t security. Rather, it’s the ability of the employee to continue paying premiums when there are other bills which are deemed to be more pressing to pay. Mortgage payments, car payments, or perhaps a well deserved vacation are all viewed as more worthy line items over paying disability or health insurance premiums. That’s the cold, hard truth. But, when the employee needs his/her disability benefits the most, there is no greater insurance plan than one which s/he has hand selected to suit their needs. Particularly if it’s a generous and claimant friendly policy. Keep in mind that not all disability insurance policies are created equally. Some favour insurers more than claimants. Others are more lenient to claimants. Those which are more lenient to claimants, or which offer wider definitions of disability tend to be more expensive. Generally, you pay for what you get.