In January 2015 it was announced that the U.S. retail giant Target will be closing all its 133 Canadian stores and laying-off 17,500 employees in the process. The company also announced it was bankrupt and seeking bankruptcy protection. Target has since created a trust fund to pay severance to its laid-off employees. The trust fund is now sitting at 90 million which should be enough to give employees at least 16 weeks of termination pay.
The Target trust fund is a unique situation. In most cases, where the employer is bankrupt, terminated employees have to line up along with every other unsecured creditor to try and get some sort of severance or termination pay. However, usually they receive only a small fraction of what they are legally owed.
Despite the fact that the Target situation may be unique, it is still a step in the right direction. Let us hope that more large corporations attempt to be as sensitive to their employee’s plight when bankruptcy occurs.