Nova Scotia

It's unlikely ex-ServiCom employees will get paid before Christmas

As 600 former ServiCom employees struggle to figure out how to pay their bills and get ready for Christmas, they’re left wondering if they will ever get the money the company still owes them.

'Those employees deserve to get the money that they’re owed'

Kayla Williams is a mother of 3 who is looking for work after losing her job at ServiCom. (Norma Jean MacPhee/CBC)

As 600 former ServiCom employees in Cape Breton struggle to figure out how to pay their bills and get ready for Christmas, they're left wondering if they will ever get the three weeks of pay the company owes them. 

Now that ServiCom has declared bankruptcy it's even more unlikely that the workers will see that money, according to Danny Cavanagh, president of the of the Nova Scotia Federation of Labour. 

"The creditors and the company people line up and get the money first," he said. 

He said workers who are owed wages seldom get their money in bankruptcy cases.

"Those employees deserve to get the money that they're owed," said Cavanagh, "They should be at the front of the line during any bankruptcy proceedings." 

Cape Breton Regional Police were on the scene at ServiCom offices in Sydney as the company announced it was shutting down, putting hundreds out of work. (CBC)

Cavanagh points to the recent Sears bankruptcy where workers lost their severance pay and retirees had their pension payments reduced, yet Sears board members continued to earn hundreds of thousands of dollars in pay

But Minister of Business Geoff MacLellan disagrees. He said the three weeks of wages are being kept in an asset bank and, once the bankruptcy proceedings are complete, those funds will be released. 

"We'll be in those conversations every step of the way to get that released as soon as we possibly can, to make sure that they're, at least in the short term, paid for what they worked so far," said MacLellan.

How long that could take, or exactly how the money would get to the former employees, is still up in the air.   

The province's Labour Standards Division has started an investigation into the ServiCom closure and is trying to determine how much pay is owed to employees. 

"The Division will also be trying to determine if there is any means to collect money from the company, given its financial situation," the department said in a statement on their website. 

Nova Scotia Federation of Labour President Danny Cavanagh said legislation needs to change to better protect workers wages, pension and severance when a company goes bankrupt. (CBC)

The ServiCom call centre in Sydney has been in operation since 1999. In 2016, the company moved into the former Target building where it served mainly U.S. companies such as SirusXM, OnStar and AT&T.

Typically employees handled outbound calls such as those to renew memberships. But staff also took inbound calls as part of the contract with OnStar — General Motors' vehicle-assistance service.

Most new employees at ServiCom would make from $12 to $13 per hour, with the opportunity to earn bonuses. But recently ServiCom started paying new employees $11 to $11.50 an hour.

Many of the people who worked there lived paycheque to paycheque, said Wayne Sharpe, who worked for the company for 19 years. 

He said the news of the layoffs was devastating to the staff and most are filing claims for employment insurance benefits to try to get some sort of money for Christmas.

"It's bad any time of year, but when it comes to Christmastime it's a lot worse," Sharpe told CBC Cape Breton's Mainstreet.

Hundreds of people lined up at Salvation Army food bank in Sydney this afternoon to seek help. Several charities in the area have said they are available to offer support to former ServiCom staff who are struggling. 

Hundreds lined up at a Sydney Salvation Army food bank on Friday afternoon. The Salvation Army will also be opening its doors on Monday afternoon to allow people to register for assistance over the Christmas season. (Norma Jean MacPhee/CBC)

The province is also trying to help people through the EI process, said MacLellan.   

Representatives with Service Canada and Employment Nova Scotia will be holding group meetings with the laid-off employees to talk about what they can do for money in the near term. 

People who have questions about their pay can reach out to the province through their website or call 902-424-5152.

"We've got to get these people money as quick as we can," said MacLellan. "It's the Christmas season. It's a tough time not to have money. That impacts everyone and we've got to speed it up and do it as quickly as we possibly can."

But he said there is no guarantee that people will see any money before Christmas. 

That's bad news for mother of three Kayla Williams, who's worked at ServiCom for five years. She has no idea what she's going to do now that she has no money coming in. 

Williams said most of the jobs available at this time of year are part time or seasonal. 

"There's nothing around here for work," she said.

A ServiCom sign this summer in Sydney announced that the company was hiring. (Tom Ayers/CBC)

Williams is finding some comfort in the outpouring of support she has received.

She said a woman from Ottawa she didn't know contacted her on Facebook wanting to help and ended up sending $200. Williams also got a call from a company that wanted to support Williams's family for Christmas.

"It makes me feel that people do care, that good people do still exist," said Williams.

Cavanagh says people in the situation of the former ServiCom employees need more than goodwill though — they also need stronger protections from government. 

Cavanagh wants Ottawa and the provinces to change laws to better protect workers, to make sure their wages, pensions and benefits are protected when a company declares bankruptcy. 

"It's the workers that really put the salt of the earth into making the company strong and doing all the work over those years and they get left far behind. It's really sad." 

With files from Mainstreet Cape Breton, Wendy Martin, Norma Jean Macphee