Unifor challenges Hudson's Bay Company over commission cuts during liquidation

'They're being denied income they've rightfully earned and are entitled to'

Unifor challenges Hudson's Bay Company over commission cuts during liquidation

Unifor has filed a grievance alleging that the Hudson’s Bay Company is “unilaterally slashing workers’ commission pay” as it proceeds with its liquidation.

The union says it learned that commission-based pay will be eliminated as of April 20 for members working in cosmetics departments, as well as for those who earn commission on big-ticket items such as appliances. These workers will be shifted to a base salary only, with HBC citing reduced product inventory and sales as rationale for the decision, according to the union.

The move violates collective agreements and reduces workers' income as they prepare for mass termination, said Unifor.

"We're talking about workers who've spent years working for this company, and now they're being denied income they've rightfully earned and are entitled to,” said Lana Payne, Unifor national president.

HBC started its full liquidation in March. That came after the company went through Companies’ Creditors Arrangement Act (CCAA) proceedings following an initial order for creditor protection from the Ontario Superior Court of Justice

Can HBC cut commission pay?

Hudson's Bay spokesperson Tiffany Bourré confirmed that the retailer has cut commission pay, according to a CBC report.

Typically, employers can't significantly reduce workers' salaries on such short notice without their consent, legal experts told CBC.

“However, when a company is under creditor protection, employees must file a claim to try to recoup what they're legally owed. And when the company pays off its debts, workers are stuck at the back of the line, so they often wind up with little or nothing,” said the CBC article.

Unifor had previously called for full transparency from the company as it goes through the liquidation process.

"Workers are being kept in the dark and their pay is being cut without negotiation,” said Unifor Ontario Regional Director Samia Hashi. “This is exactly why we need stronger legislative protections and enforceable penalties for companies that violate workers' rights. Workers should be priority one during corporate insolvency and bankruptcy."

Unifor – along with other groups – had also slammed the company after it made the decision to award the management bonuses as more than 9,300 workers are at risk of losing their job.

“Canada’s unions stand in full solidarity with HBC workers and demand that the company reverse course immediately,” the Canadian Labour Congress (CLC) said.

“No executive should be pocketing bonuses while workers are left without a safety net.”

In March, HBC laid off nearly 200 corporate employees as it began the process of liquidating the majority of its stores.

During the liquidation process, Hudson’s Bay and its Canadian Saks Fifth Avenue and Saks Off 5th stores will remain open to serve customers in stores and, for a limited time, at TheBay.com, HBC previously said.