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Laurentian faculty, staff will have to join creditors’ pool to get their severance

Court documents show 194 employees — most of them unionized — lost their jobs at LU earlier this month

A Laurentian University professor terminated as part of massive job and program cuts at the university says he and other faculty who lost their jobs will be forced to get in line with other creditors in an attempt to access severance pay.

Laurentian goes back to court April 29 to ask for the stay of proceedings protecting it from its creditors to be extended to Aug. 31, as well as for a further $10 million in debtor-in-possession (DIP) bridge financing.

This as it continues to undergo insolvency restructuring under the Companies Creditors’ Arrangement Act (CCAA).

Reuben Roth is an associate professor in the workplace and labour studies program at Laurentian, which was cut as part of the university’s restructuring earlier this month. His last day at Laurentian is May 15.

“No severance has been negotiated as of yet for faculty,” said Roth. “We have been told by the university we can claim our severance in what’s called the creditor’s pool somewhere on the other side of this process.

“Now I have to get in line for my severance behind Royal Bank of Canada, TD Canada Trust, Bank of Montreal. They all get their money first. What those banks are doing is they’re taking my severance and putting it in their bank account.”

Tom Fenske, president of the Laurentian University Staff Union (LUSU), said it's much the same for his members who were terminated.

"We have one individual who worked here 48 years, and has given everything to this institution," he said. "They're brought into a meeting, cut through a firing line style cutting, bringing a whole bunch of people in the room. It was disgusting.

"The university owes them a significant amount of severance, and they won't pay it out, because they're under the CCAA."

Roth, who has been with Laurentian for 16 years, said in his case, he should be entitled to about $252,000 in severance (or around 19 months’ pay) under the terms of the Laurentian University Faculty Association (LUFA) collective agreement. 

But Laurentian University is in the midst of restructuring under the Companies Creditors’ Arrangement Act (CCAA), which means the normal rules aren’t in place. 

“I’m told that what happens in these cases is you get literally pennies on the dollar,” said Roth, who recently sold his Sudbury home after learning of his termination, and is looking for work.

Even Ontario’s employment standards act is blocked by the CCAA, which would have entitled Roth to get 16 weeks’ of pay — one week for every year of service.

“Right now, I would accept four months because the alternative is on May 16, I’m going to get $232 (per week) in EI,” he said.

Documents filed by the university as it prepares to go to court this week provide some further details about job cuts and concessions imposed on Laurentian University employees.

According to an April 21 affidavit from Laurentian president Robert Haché, 194 full-time jobs were lost at Laurentian as part of the CCAA process.

That includes 116 full-time faculty positions (LUFA members), 41 unionized staff (members of the Laurentian University Staff Union, or LUSU) and 37 non-union jobs (24 of which were in management and executive positions).

Most of these Laurentian employees will be terminated as of either April 30 or May 15, depending on their position.

Earlier this month, Laurentian faculty ratified a five-year collective agreement expiring June 30, 2025 that contains several concessions.

LUFA leadership say their membership voted for this collective agreement “under duress,” given Laurentian was at risk of closing if it was not ratified.

Among these concessions are each faculty member’s salary being decreased by five per cent as of May 1 and five unpaid furlough days per year for the next three academic years.

The court documents also show as part of the terms of Laurentian’s application for increased DIP funding, there will likely be no changes to Laurentian’s governance or senior leadership in the near future.

One of the conditions for the further $10 million loan is as follows: “No material changes to LU’s governance or senior leadership shall occur that, in the DIP Lender’s sole discretion, creates a situation of increased instability during the term of the DIP Facility.”

***Correction: Prof. Reuben Roth said he initially miscalculated the amount of severance to which he's entitled. The story has been changed to reflect the correct amount. Also, the amount of EI he's entitled to should have read per week instead of per month, as the story initially was written. That too has been corrected.



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