Sears Canada agrees to set up Employee Hardship Fund

On Tuesday, August 15th, Sears Canada has agreed to set up an employee hardship fund after laying off employees without severance.

If approved by the court, former employees will receive payments from the fund if they meet the criteria.

Sears Canada will contribute a maximum of up to $500,000 to the Employee Hardship Fund in two tranches.

Susan Ursel, who is representing the employees, said "The Employee Representatives Committee is pleased to have reached an agreement with Sears Canada, whose leadership have taken an important, responsible step in the face of a difficult situation.”

“While this Fund will not make former employees whole in regards to payments they would have normally been entitled to outside of the CCAA Proceeding, it will help those in the most precarious financial situations."

A motion is expected to be reached by the Court on August 18th.

The first tranche of $300,000 will be available following Court approval of the Employee Hardship Fund, and the second tranche of up to $200,000 will be available following the second installment payment date under the KERP, assuming the criteria are met.

Employees facing hardship as a result of the layoffs will have to fill out an application for the funding, which will be reviewed within 14 calendar days. If approved, the first hardship payment will proceed within seven business days of the approval.