Canwest employees fear for severance
Last Updated: Thursday, October 8, 2009 | 9:09 AM ET
The Canadian Press
Global Television is included in the application for court protection. (CBC)Canwest Global Communications Corp. employee Patrick Vanderburg is working for a company that he believes will owe him $95,000 in severance and vacation pay when he's laid off later this year.
But he fears he won't see a cent of it because parts of the media conglomerate — including his division — filed for creditor protection earlier this week, essentially locking up all future severance payments to its employees, including Vanderburg who loses his job in December.
"My wife works part-time and I've got four kids, so you know, Merry Christmas," the 45-year-old program co-ordinator of CHBC-TV station in Kelowna, B.C., said in a phone interview Wednesday.
"Essentially in my situation I'm feeling that I will get nothing after working more than half my life at this one station."
The Communications, Energy and Paperworkers Union, which represents some of Canwest's staff, said that about 11 current employees in Kelowna will be affected when they're laid off without severance later this year.
For now, those staff members are still receiving paycheques from Canwest.
Channel switch
"It's almost like being in an airplane and somebody rips off your parachute and kicks you out the door," Vanderburg said.
The job cuts in Kelowna were part of the channel's switch from an E!-branded station last month to a Canwest affiliate.
Canwest spokesman John Douglas said that Vanderburg, and up to 60 other employees across the organization in the same boat, will still have an opportunity to pursue the money owed to them.
"He would become a creditor and as such he would have a claim and he would be part of the claims process," Douglas said.
But a claim can take months, if not years, to come through. Employees are often unsecured creditors, low on priority list when a company starts repaying its debts, far below bondholders and other corporate organizations.
Vanderburg worries that means he'll never see his severance and 28 days of vacation pay.
$9.8 million in bonus payments
In an email to staff late Wednesday, Canwest chief executive Leonard Asper said that the number of former employees whose severance is affected by the court filing is small relatively speaking, but that "we sincerely regret the impact to them."
"One of the reasons that this financial restructuring plan has taken as long as it has to come together is that we've carefully considered every decision to minimize negative impacts on our stakeholders where possible, while working to ensure we preserve the value and viability of the business and protect as many jobs as possible in the long term," he wrote.
In court documents filed Tuesday, Canwest requested that $9.8 million in bonus payments be set aside for "key employees" to give them incentive to stay with the company during the restructuring process, rather than find a new job.
The company said it "would be very difficult to attract [a] replacement" for these high-level staffers. None of the workers' names were disclosed, and their individual payments were not specified.
In the meantime, other employees in Kelowna have decided to stop coming to the office.
"Many people are using their vacation time rather than keep coming to work and not get paid for their unused vacation," Vanderburg said.
Struggling under $4-billion debt load
Canwest has been struggling under a $4-billion debt load, with the majority of it incurred when it bought Conrad Black's newspaper assets in 2000 and the specialty channels from Alliance Atlantis in 2007.
On Tuesday, it filed for creditor protection in Canada, and a day later made a similar filing in U.S. bankruptcy courts. The company will now work with the courts to restructure its operations and deal with its huge debts.
The filing for court protection from creditors affects just over a fifth of the company's businesses, or 1,700 of 7,400 employees.
The company said that it believes it can restructure within six months while it operates under the federal bankruptcy protection law.
In July, Canwest reported that it lost $110 million in the third quarter, which included a $247-million goodwill writedown, compared to a loss of $28 million a year earlier.
