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Former Sears employee claims high revenue estimates led to wrongful dismissal

A company’s high-level business decisions can have repercussions throughout the entire organization, and unfortunately sometimes the decision to restructure a struggling business results in dismissal of employees. However, in some cases, the manner and timing of dismissal may give employees grounds for a collective wrongful dismissal lawsuit.

With these issues in mind, employers and employees in B.C. may be interested in a notice of civil claim filed by a former employee of Sears Canada. The plaintiff is seeking class certification for the lawsuit, which claims that he and other Sears employees were wrongfully dismissed after Sears Canada’s revenues “were substantially less than represented.”

The dispute relates to a deal to spin off the company’s home services division, which Sears Canada had been preparing to sell for several years. As part of the deal, SHS Services Management Inc. would take over the division. The companies also reached a “Branded Concession Agreement,” which was reliant on Sears’ sales estimates and allowed SHS to use the Sears name.

The deal specified that the new company would offer jobs to workers already in the home services division. According to the lawsuit, 92 of those workers were employed in British Columbia when the deal was struck in March 2013.

However, the home services division went into receivership shortly thereafter, and the lawsuit claims that Sears Canada demanded the repayment of a $5.6 million loan to the spun-off division six months after the close of the deal.

The lawsuit claims that, because of these high-level business dealings, employees’ contracts were terminated without notice, compensation or cause.

If you are an employer or an employee with similar concerns, then do not hesitate to seek advice from an employment litigation lawyer. A legal professional with experience in investigating and resolving employment disputes can explain your full range of options.

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