TORONTO — A Toronto judge approved a hardship fund on Friday for former Sears Canada employees that will come from a pool of money set aside to pay bonuses for executives.
The $500,000 fund will help former employees facing difficulty who would have otherwise been eligible for severance payments when they lost their jobs at the retailer.
Watch: Timeline of the rise and decline of Sears Canada
Employees will have to apply to receive money from the fund and prove that they face "urgent or immediate hardship" in their financial situation. They can receive up to eight weeks pay to a maximum of $12,000.
About 3,100 Sears employees have been laid off since the once-popular retailer began a restructuring process.
The department store chain has come under fire for forgoing retirement benefits or severance pay for former employees, while paying $9.2 million in bonuses to keep key employees on board while under the Companies' Creditors Arrangement Act.
A group of laid off Sears employees in court for the hardship fund proceedings Friday said they were happy the fund was created, but added even more money should have been made available to help all employees, not just those deemed to be in the greatest need.
It should've been a proper severance where everyone had enough time to deal with the situation and carry on until they were able to find their own replacement work
"It's still not what really they should've done," said Vera Asselin, who worked in inventory management at Sears Canada's head office.
"It should've been a proper severance where everyone had enough time to deal with the situation and carry on until they were able to find their own replacement work."
The court has not yet heard a motion filed by a group of creditors that wants to sue the company's executive officers and directors, alleging negligent misrepresentation and oppression. The claims have not been proven in court.
Liquidation sales to finish by Oct. 12
The retailer's court-appointed monitor says the group wants an Ontario judge's permission to launch their case against the company. The next hearing is scheduled for Tuesday.
In a report prepared ahead of Friday's court hearing, the monitor said it has advised the creditor group that it believes such motions should be delayed.
However, it said the creditor group will ask the court to schedule a time to hear their claim.
The retailer announced a plan in June to close 59 locations across the country. It plans to finish liquidation sales by Oct. 12 and hopes to complete its restructuring this year.
Once a go-to for shoppers, Sears Canada has struggled in recent years despite efforts to change along with the shifting retail landscape.
The company has also dealt with several changes in executive leadership over the last four years.Suggest a correction