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sears closing bankruptOn October 13th, the Ontario supreme court of Justice authorized the liquidation of all of the 130 Sears stores in Canada. This announcement came after the executive chairman of Sears Canada said the buyout plan he was negotiating with a group of buyers was not going to work. Starting on October 19th, Sears will begin liquidating its stores, a process that will take between 10 to 14 weeks. 12,000 employees from all over the country will lose their jobs. These workers, who are not entitled to any compensation, will quickly find themselves empty-handed and forced to find a job in a precarious economy.

The cynicism of the management

We already pointed out in a previous article that the 43 senior executives of Sears Canada were granted bonuses amounting to $9.2 million while they announced the dismissal, without compensation, of more than 2,900 employees. This was sanctioned by the courts.

In order to save face, the management created an relief fund of $500,000. This is a paltry sum which amounts to approximately $170 per employee. When we take into consideration that the $9.2 million mentioned above is intended for around just 40 executives, the cynical attitude of the Sears Canada management towards the workers is clear to see. To top it off, the management still has yet to put $200,000 in the relief fund.

But the troubles for the workers don’t stop here. The tiny amount they have received from the relief fund, already insufficient to give the appropriate aid, will be deducted from their EI benefits as it is considered a source of income. The cynicism of the management is coupled with the complicity of the bourgeois state which sanctions huge bonuses for the bosses while punishing the workers.

Workers left to themselves

As a result, only a few dozen workers have registered for the relief fund which has proven to be completely useless. People who have worked for this company for decades, find themselves empty handed and without work - and all of this is perfectly legal.

The workers feel betrayed by a company which they have dedicated many years of their lives to. Horror stories have already started to circulate in the media. For example, one worker who has been retired for nearly 26 years will see his life insurance and health benefits plan disappear because Sears will cease financial contributions to these programs!

According to Ryan Bonnar of Samfiru Tumarkin LLP, the law firm representing the Sears workers, it is unlikely that the dismissed workers will get anything. He says that “This is because secured creditors will get paid first as part of the liquidation, and there won’t be any money left to pay severance.” With regards to the pension funds, for the moment, workers will receive a maximum of 81% of what they are owed. However, they are likely to receive a lot less, because the creditors must be compensated first and the workers will be paid with what's left. Here is capitalism in all its splendor: when there is a shipwreck, bankers, shareholders and bosses first!

An example of a broken system

Managers and employees alike, from various Sears stores are blaming this huge commercial debacle on the incompetence of the upper management. One worker even claimed to have witnessed these bad business decisions for a long time. However, we should not see this scandal as an isolated event but as a reflection of the general crisis of capitalism which is hitting the retail sector particularly hard. For example, Statistics Canada reports that between 2012 and 2016, the number of jobs created in the retail sector rose by 3.7% while at the same time we saw an increase of 4.7% for the whole economy. We previously noted that this is just part of the general trend in the retail sector in North America. In the United States for example, there were 89,000 jobs lost in this sector between October 2016 and April 2017.

This is bad news for the Sears workers who will be forced to find new jobs. It is also a strong possibility that other retail businesses will be announcing new massive layoffs in the near future.

Once again, the bosses are throwing thousands of workers out of work with no recourse. The true face of capitalism once again shows itself incapable of protecting jobs and workers. This is all the more shocking when we consider that the economy is supposed to be in good health. Only a socialist system, with the nationalization of big businesses like Sears, would be we able to make the economy serve the workers and not the stockholders and bosses. Join us in the fight for socialism today!