Current, former Laurentian employees have framework for claims against Sudbury university
1,200 expected to join those seeking compensation from insolvent institution
The judge's tone was brisk and business-like at a Zoom courtroom hearing Tuesday to lay out a path for current, former and retired Laurentian employees claiming compensation from insolvent Laurentian University.
The new policy provides a formula for the claims process, but doesn't mandate a payout percentage of the claim.
The institution declared itself insolvent Feb. 1, with its president Robert Haché saying it was entering creditor protection because it didn't have the financial means to cover the payroll that month. Under the Companies' Creditors Arrangement Act, the university was allowed to operate while dealing with its financial situation.
Since then, there have been drastic cuts to programs, staff and faculty.
In a letter to the university community, Haché said cuts included closing 58 undergraduate programs — 34 in English and 24 in French. Hundreds of faculty and staff lost their jobs.
Laurentian also severed agreements with its founding partners — Thorneloe, Huntington and the University of Sudbury — saying it could more efficiently deliver their programs unilaterally.
Staff and faculty at those federated universities have reached separate severance agreements with their respective administrations, and this claims process does not apply to them, except for a portion involving the health benefits plan.
The negotiations for a claims formula involved all parties and included the Laurentian University Faculty Association (LUFA) and Laurentian University Staff Union (LUSU).
LUFA president Fabrice Colin describes the process as "unfortunate and brutal."
"Employees are in line with other creditors, so in a sense, terminated members — their severance pay now is a debt that is held by the university."
Colin said the employee claims will be dealt with after claims by the big banks that are expected to reach at least $100 million.
"They [the employees] will only get a small fraction of the amount that is owed to them, and as you know, those payments provide vital financial support for terminated employees as they struggle to support their family and put food on the table and find another job."
He anticipates it will be months more before claimants will receive any money.
During Tuesday's court hearing, Mitch Grossell, a lawyer for Laurentian, gave an overview of the claims process for employees and the pains taken to consider everyone who may have been touched by the university's situation.
1,200 claims anticipated
"The conflict compensation claims methodology really addresses 10 different categories of claim," Grossell said.
He said it's been drafted and negotiated based on:
- Provisions of the applicable collective agreements, including "both the life and legacy of collective agreements."
- The LUFA and the LUSU term sheets, with both documents "approved by this court earlier in the proceeding."
- Individual employment contracts with each employee at the university, the terms and conditions of which also include "the senior leader terms and conditions."
- The retirement health benefit policy, usually referred to as the BP policy, and other internal policies that Laurentian may have with respect to employment.
Certain aspects of the claims policy, related to non-unionized employees, also take into consideration provisions of the Employment Standards Act, and have been drafted to reflect "the state of the current common law ... along with the statutes," Grossell said.
I did want to make clear for this court's benefit, and for everyone's benefit at this hearing, is that there is no intention that there will be any further terminations at this time.- Mitch Grossell, lawyer for Laurentian University
He said there's also a category for any future employees who may be terminated as a result of restructuring, even though that seems unlikely.
"I did want to make clear for this court's benefit, and for everyone's benefit at this hearing, is that there is no intention that there will be any further terminations at this time," he said. "But this provision is required in the methodology in case there are exceptional one-off circumstances for employees to be terminated for any reason, simply to ensure that they are caught by the compensation claims process and this methodology."
Liz Pilion, lawyer for the court monitor, Ernst & Young, said 1,200 claims are expected in total, but the process has been streamlined.
Pilion said the firm has three weeks to prepare all the claims and send them out to each claimant to review.
"So the majority of work will have been done for these individuals" she said.
The deadline for claimants to return the forms to the monitor is Oct. 14.
"It's also sufficient opportunity for anyone to raise any issues with their compensation claim information," she added.
Next court date looms
Laurentian University continues to review its real estate assets.
On Aug. 12, it issued a request for proposals for a firm to review its governance structures in an effort to find savings and determine how much money it will have to compensate its creditors.
In the near future, its next step will be for all parties to return to court Aug. 27, when the university is expected to ask the judge to extend creditor protection until the end of the year as it continues restructuring.
Meantime, the university is preparing to welcome students for a new year at what the president has described as Laurentian 2.0.