The union representing 1,500 employees at 12 Zellers stores in Ontario has ratified a new contract that provides improved severance benefits as the retailer prepares to close the stores.
The United Food and Commercial Workers (UFCW) Local 175 says the three-year deal includes wage increases and boosts severance pay if the stores shut down.
Four of the Zellers locations covered by the new deal will be converted into Targets as part of the American retailer's Canadian expansion plans, while a fifth — also bought by Target — will be turned into a Sobeys grocery store.
Target and Sobeys reached an agreement that the grocery chain will supply food to its department stores.
Target announced in 2011 it would take over the leases of as many as 220 Zellers stores with plans to open the first Canadian stores in 2013.
Since the takeover announcement, Target has insisted that the deal for the Zellers locations is a real estate transaction and not an acquisition of the business. This means Target would not be subject to Canadian labour laws, which require successor companies to hold on to unions if the company is opening a similar business in the same area.
The UFCW is campaigning for Target to guarantee employees at unionized Zellers will continue to be employed after the stores are converted. There are 10,000 full-time employees and 18,000 part-time Zellers employees at risk of losing their jobs.
Target has only said it will give Zellers employees an opportunity to apply for jobs at its new Canadian outlets.
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