by Doug Nesbitt
Target’s operations in Canada have got the go ahead for liquidation. In preparation for its liquidation sales, workloads for Target’s workers are increasing, morale has plummeted and absenteeism is rampant.
How did it get to this? Let’s recap what we know.
The Zellers/HBC deal
The Hudson’s Bay Company fired roughly 25,000 workers across the country before they sold off their Zellers properties to Target. This was a move to bust unions because when the UFCW challenged Target, arguing that they had inherited several unionized Zellers (there were 15 unionized Zellers), the BC Labour Relations Board ruled that the HBC/Target transaction was for property, not for a business. By laying off their workers HBC ensured that Target wouldn’t have to worry about any unionized Zellers.
Even the anti-union giant, Walmart, took on Woolco’s 16,000 workers when it bought the business in 1994.
Target then told the 25,000 Zellers workers that they had the privilege of reapplying for Target jobs. According to UFCW, only 1% of Zellers workers were rehired: that’s 250 people!
Target took over 189 Zellers stores and closed 64 of them, many of them located in lower income neighbourhoods.
It’s worth pointing out that when Target took over Zellers properties instead of the company and workers, that meant they didn’t get any of the decades of marketing information HBC had collected. They didn’t inherit any of the knowledge about customers and the local communities which Zellers workers knew.
It is hard to say exactly why Target failed so miserably in Canada. Their remodeling of the old Zellers stores took many months. People who shopped at Zellers got used to shopping somewhere else, like Walmart or Canadian Tire. Target sunk huge amount of money into store renovations before they ever made a dime in Canada.
By now, everyone knows Target faced severe competition with Walmart and Canadian chains such as Canadian Tire and the Loblaws empire (which now owns Shoppers Drug Mart) but it was grossly mismanaged and stores were not stocked with what people wanted or needed.
Their strategy to enter the Canadian market was flawed from the start. Instead of opening a couple of flagship stores and working out any possible kinks in their operation they decided to roll the dice and go for a big and aggressive break through into the Canadian market.
And lost in most of the mainstream media coverage of Target’s failure was the Zellers layoffs that had a real ripple effect through working-class communities. There’s no doubt a lot of people didn’t bother with Target because they thought they were heartless bastards.
There was no single reason why Target failed so quickly and spectacularly, but what we can say is that workers have once again paid the price for management failures.
Severance: Myths and Facts
And it is management, despite their failures, who avoid the worst of Target’s bankrupcty. Only Target managers got severance. Between 21 and 26 senior managers got $30,000 severance cheques, or between 8 and 12 weeks salary. Over 500 store managers (about four per store) got $11,000 severance cheques, again 8-12 weeks of salary.
Target Canada claims its 17,000 workers are getting a generous severance of 16 weeks. The media has largely bought Target’s spin without question. Stories appeared in the Star, the National Post, Globe and Mail and on CBC and CTV lauding Target’s generosity and repeating the claim that Target was setting up a fund to pay out severance to its workers.
But worker severance is an outright lie. Target employees were given a termination notice, not a severance. Severance pay is financial compensation for laid off workers that is supposed to recognize past contributions and seniority. Under law it is distinguished from termination pay which is given in lieu of proper notice. In Ontario in workplaces that lay off more than 500 workers the minimum termination notice, the amount the time workers must be employed or offered termination pay, is 16 weeks.
But for Target employees they must work as long as their store remains open within the 16 weeks in order to receive pay. If their store remains open for 10 weeks after the termination notification then they will receive an additional 6 weeks of pay. If they leave Target to find another job while their particular store remains open they will receive no money.
This is not severance. The 61 million dollar (U.S. dollars) package given to Target CEO, Gregg Steinhafel, in 2014 on the other hand was a generous severance package.
When Target says they have set aside over 70 million in severance for their employees, what they really mean is the parent corporation that pulled in 2.1 billion in profit last year set aside enough payroll to fulfill the minimum termination pay required under law.
Perhaps it is asking too much of our media for them to type the words ‘termination notice’ and ‘ontario labour law’ into google.
Unpaid Taxes and Economic Turmoil
Target also owes Canadians millions in unpaid taxes. Municipalities across the country, big and small, are owed taxes. The Federal government is owed $12 million. The BC government is owed $2.6 million and the Quebec government $6.5 million.
The bankruptcy prevents anyone from collecting what is owed – and Target owes about $5 billion – until a judge comes up with a payment plan.
The Target on our backs
Zellers workers and now Target workers have found no allies in government during this whole episode. Where was the political class during these historic mass layoffs? Nowhere. What does it say when 17,000 workers get canned from a large and profitable multinational and the best politicians and punditocracy can do is praise Target’s press release about giving workers’ a severance?
And having been unable or unwilling to build real power in the retail sector, the Canadian labour movement could do little but watch. Workers will be treated as disposable as long as workers remain powerless against employers, corporations, and the business elite.
The labour movement must figure ways to effectively build power and raise expectations that life can be different for those of us in the retail sector. While some support can be won these days in the political arena, it’s pretty clear that power in the political arena is going to have to come from building a movement, not from lobbying or media campaigns. We can draw inspiration and lessons from American workers organizing with Our Walmart and the Fight For 15, and the union drives at H&M and a handful of other retail chains on both sides of the border. Until we can begin to build such movements we don’t have a chance to target this economic system that benefits the wealthy at the expense of the working majority.
Until we can begin to wield such power, every worker has a target on their back.