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Labour & Employment Law Blog

Layoffs and Bankruptcy in the Canadian Retail Industry

Jennifer Zeilikman

Jennifer Zeilikman

Layoffs and Bankruptcy in the Canadian Retail Industry

In March 2023, it was announced that Nordstrom Inc., an American-based luxury retailer, is closing 13 department stores and laying off 2,500 employees in Canada. Nordstrom had filed for creditor protection. And in February 2023, Bed Bath & Beyond, an American-based home goods retailer, also announced that it was going to close 65 locations and lay off 1,500 workers in Canada. Bed, Bath & Beyond had also filed for creditor protection.

So, what happens to reasonable notice or severance if bankruptcy is declared by the company?

It is not good news for employees. Generally speaking, bankruptcy laws allow a company’s assets to be liquidated and then these proceeds are paid out in an orderly fashion to the company’s creditors. The Bankruptcy and Insolvency Act is the legislation in Ontario that sets out how companies are to act and what steps they are to take when the company is deemed to be bankrupt.

Under the Act, creditors are divided into two types – the secured creditor and the unsecured creditor. Secured creditors are paid first out of the funds generated from the company’s liquidation of assets. An example of a secured creditor would be a bank. Then, if there are any funds left over, unsecured creditors will be paid.

Employees are generally unsecured creditors. As such, employees are normally paid last after funds are paid to secured creditors. So, employees with a claim for wrongful dismissal following their layoff and termination may have a very difficult time getting any money from a bankrupt company to pay for these damages subject to some minimal wage programs.

It may also be possible to sue a director of a bankrupt company directly under certain conditions. However, the process to do so is rather complex. Given the complexity of the process, it is best to approach an employment lawyer directly in order so that the lawyer may assist any employee who may have questions about bringing a claim against a director of a bankrupt company.

Regardless of the above, it is very import to approach an employment lawyer to determine your rights and what next steps the employee should take. Indeed, some such steps may even involve a referral to a bankruptcy lawyer. It may be that the company is in a grey area and not a total bankrupt. This can happen when the company may be insolvent in the imminent future and as a cost saving measure has attempted to “lay off” staff. In this case, the employee should be owed termination pay and severance.

The above article is for general information purposes only, does not constitute legal advice or create a solicitor-client relationship. Because each case is unique and factually driven, if you have concerns with regard to the foregoing issues, please make an appointment with one of our lawyers or a qualified legal practitioner elsewhere. We represent clients in the Greater Toronto Area including Toronto, North York, Markham, Vaughan, Thornhill, Newmarket, Aurora, Brampton, Mississauga, Barrie, Ajax, Whitby, Pickering and Oshawa.

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Legal Receptionist

Zeilikman Law is an employment law firm located in Vaughan, Ontario. We are looking to hire a legal receptionist to join our firm. Preference will be given to candidates who have experience working as a receptionist at another law firm.

Location: Vaughan, Ontario.

Start Date: Immediately.

Hours: Monday to Friday, 9 am to 5 pm. Full time. In-person only. This is not a remote work position.

Wages: 35,000 to 40,000 per year.

Duties and Responsibilities:

  • Manage our firm’s multi-line telephone system to receive incoming calls.  Screen incoming telephone call inquiries to determine the nature of the telephone call and provide standard information related to our legal services.  Take and deliver messages and route incoming telephone calls to the appropriate staff person.
  • Answer general inquiries coming from the firm’s social media and website email.
  • Welcome in-person visitors upon arrival.  Direct visitors to the appropriate staff person and / or office or boardroom.
  • Organize in-person visitor schedule to prevent overlap and multiple bookings.
  • Receive, sort, and distribute daily mail and deliveries.
  • Arrange for couriers.
  • Keep front reception, kitchenette area and boardroom tidy.
  • Perform various clerical duties such as filing, photocopying, and faxing on an as-needed basis.
  • Process client or other payments.
  • May be asked to run minor errands outside of office such as attending post office to arrange a courier or pick up mail.
  • May be asked to assist other law clerks or lawyers of the firm as required and as appropriate.
  • Any other basic administrative duties or tasks as deemed appropriate.

Required Skills:

  • Basic knowledge of general office procedures including filing, faxing, and printing and copying.
  • Basic word processing computer skills.
  • Proficient in receptionist and telephone practices, etiquette, and decorum.
  • Professional attitude and appearance.
  • Excellent organizational skills.
  • Positive customer service attitude is a must.
  • Must be able to maintain confidential and sensitive information.

Education and Experience:

  • Highschool diploma or equivalent.
  • 1 – 2 years’ experience in an office setting with an emphasis in accounting, reception or clerical work is required.   We would prefer experience in a law firm environment.

Applications for this position should be sent via email to jennifer@zeilikmanlaw.com. All applications should include a cover letter, resume and at least two references. Only successful candidates will be contacted.