Tensions are escalating between Hudson’s Bay Company (HBC) and its largest union as the historic retailer continues to wind down operations under creditor protection. In a move that has sparked outrage, HBC has eliminated commission pay for cosmetics and big-ticket sales employees at certain stores, a decision that Unifor claims violates binding collective agreements.
The change took effect on April 20 and impacts unionized staff across locations in Windsor, Kitchener, and Toronto’s CF Sherway Gardens, as well as at the retailer’s e-commerce warehouse. Employees who previously relied on commissions to supplement their base income will now receive only base pay, despite ongoing liquidation sales.
Unifor, which represents approximately 595 HBC workers through Locals 40 and 240, has filed a formal grievance over the issue and is calling for the immediate reinstatement of commission pay.
“This is a blatant violation of our members’ collective agreements and a cruel blow,” said Lana Payne, Unifor National President. “These are workers who have given years to this company—only to be shortchanged while managers are being rewarded with bonuses.”
Liquidation Pay Cuts Amplify Worker Concerns
Hudson’s Bay’s justification for eliminating commissions centres on a dwindling product inventory and a decline in big-ticket sales as stores continue to liquidate. But for workers, many of whom are facing imminent termination without severance, the decision feels like a ‘final insult’ according to the Union.
“We’re all heartbroken. We feel betrayed,” said Hazel Harris, an HBC e-commerce warehouse worker who spoke at a recent Unifor conference attended by more than 100 retail employees nationwide. “We just want what was promised to us and for HBC to treat us with dignity and respect. Thankfully, our union has our back.”
Unifor Ontario Regional Director Samia Hashi said the company’s actions reflect a troubling pattern. “This company is treating liquidation like a free-for-all where contracts and basic decency no longer apply. Workers are being kept in the dark, and their pay is being cut without negotiation. This is exactly why we need stronger legislative protections.”
$3 Million in Bonuses for Management Adds to Worker Frustration
Fueling further resentment is the revelation that HBC has allocated $3 million in bonuses for managers and non-store staff during the liquidation process. The union argues that while front-line employees see their compensation cut and face termination, executives are being rewarded.
The bonus plan came to light in court filings tied to HBC’s proceedings under the Companies’ Creditors Arrangement Act (CCAA). Unifor has repeatedly called for full transparency, urging the company to prioritize workers, honour severance obligations, and respect all collective agreements.
The grievance over commission cuts is the latest chapter in what has become a broader labour dispute, unfolding amid one of the most significant retail collapses in Canadian history.
Thousands of Jobs on the Line as HBC Stores Continue Liquidation
Hudson’s Bay, once a cornerstone of Canadian retail, is in the process of liquidating almost all of its department stores. Unless a last-minute investor or buyer steps in to salvage part of the business, thousands of employees will lose their jobs in the coming weeks.
When the company entered CCAA protection on March 7, it had more than 9,300 employees. Since then, layoffs have already begun. In early April, 179 corporate positions were eliminated, followed by another 93 roles. According to court documents, the company does not expect to pay severance as job cuts continue.
This has triggered legal battles over employee representation. HBC has asked the court to appoint the law firm Ursel Phillips Fellows Hopkinson LLP to represent current and former employees during the CCAA process. However, Koskie Minsky LLP, already retained by more than 250 employees, has pushed to be formally recognized instead.
The representative law firm would have the authority to file claims on behalf of employees, assist them with the federal Wage Earner Protection Program (WEPP), and ensure their voices are heard during the restructuring.
Disability and Retirement Benefits Also Under Threat
Beyond wage disputes and layoffs, HBC’s restructuring poses deeper implications for vulnerable groups within its workforce. About 183 individuals currently receive long-term disability benefits through an “administrative services only” (ASO) plan, which is not insured. Without a viable financial plan or a new owner, those benefits could be lost.
The company has also notified around 2,000 retirees that their post-retirement benefits—including health, dental, and life insurance—will be terminated by the end of April. Meanwhile, supplementary executive retirement plans (SERPs) have been suspended, impacting 304 current and former senior employees. Royal Trust Corporation of Canada has begun winding up these plans.
Court documents confirm that HBC’s main pension plan, which has over 20,000 members, remains in a surplus position and is still operating. On April 3, the Financial Services Regulatory Authority of Ontario appointed Telus Health as the independent administrator, removing the company’s direct control over the fund.
Nonetheless, the termination of additional retirement benefits has heightened fears among retirees and staff nearing retirement age.
Hardship Fund Discussions Signal Mounting Pressure
In response to growing criticism, Hudson’s Bay has initiated talks with lenders Pathlight Capital LP and Restore Capital LLC about setting up a hardship fund for employees suffering financial distress due to benefit and income loss.
In a recent affidavit, HBC Chief Financial Officer Jennifer Bewley confirmed the hardship fund was being explored, though no firm details or timelines have been released. While some see this as a positive step, others view it as too little, too late.
