Hudson’s Bay Co. has stopped paying commission to hundreds of cosmeticians and fragrance advisers during liquidation sales, effectively reducing their salaries.
These workers, also known as beauty advisers, earn commission on products sold, on top of their base salary.
Hudson’s Bay notified the beauty advisers 12 days in advance that, starting on April 20, they would only receive base pay, according to a company-issued letter seen by CBC News.
“Please note that this is a decision we have not taken lightly,” the retailer stated in the letter.
Unifor, the union that represents dozens of beauty advisers in Ontario, has filed a grievance against Hudson’s Bay, arguing that the commission cut violates its members’ collective agreement.
“This company is treating liquidation like a free-for-all where contracts and basic decency no longer apply,” Unifor’s Ontario regional director, Samia Hashi, said in a statement. “Workers are being kept in the dark and their pay is being cut without negotiation.”
In March, indebted Hudson’s Bay was granted creditor protection as it tries to find a buyer by the end of the month to stay afloat. The majority of the company’s 9,300 employees are set to lose their jobs once liquidation sales wrap up on June 15 at most of its department stores.
CBC News spoke with several beauty advisers distraught over the loss of commission pay, which they say will mean a significant reduction in their take-home pay.
“We’re not happy about it, because it’s our livelihood,” said a beauty adviser who works at a Hudson’s Bay in British Columbia, where employees aren’t represented by Unifor. CBC News is withholding the person’s name because they fear repercussions from the retailer for speaking with the media.
Speaking about their own case, the beauty adviser said they’re now earning just above minimum wage — $17.85 per hour in B.C. — a drop of more than $10 an hour compared with what they typically make when also earning commission.
“It’s just devastating because I don’t know how I’m going to get by,” the beauty adviser said. “I think a lot of people are going to have to dip into credit cards and [get] loans probably, to be able to pay their bills.”
Hudson’s Bay did not immediately respond to questions about eliminating commission pay.
Legal experts told CBC News that typically, employers can’t significantly reduce workers’ salaries on such short notice without their consent.
However, when a company is under creditor protection, employees must file a claim to try to recoup what they’re legally owed. And when the company pays off its debts, workers are stuck at the back of the line, so they often wind up with little or nothing.
Unifor argues the beauty advisers it represents shouldn’t have to wait in that line, because commission pay is included in their contract.
“It’s a legally binding document,” said Dwayne Gunness, president of Unifor Local 40, which represents 40 beauty advisers.
“You can’t just, midstream, [reduce] someone’s pay,” he said. “I think it’s deplorable.”
Hudson’s Bay managers will get up to $3M in bonuses, but workers get no severance
The commission loss is another in a series of blows to Hudson’s Bay workers, who learned last month that the retailer won’t be paying severance to laid-off employees.
Unifor, which represents a total of 595 Hudson’s Bay employees, says some members are entitled to upwards of $35,000 in severance pay.
The union argues the retailer’s decision not to pay severance is especially egregious considering it’s paying up to $3 million in retention bonuses to company executives and store managers.
“Unifor will continue to call out this injustice, defend workers, and demand accountability,” Unifor national president Lana Payne said in a statement in March.
Hudson’s Bay did not respond to questions about severance and bonus pay. It’s common for indebted companies to pay retention bonuses to maintain key staff.
Store employees have been offered much smaller bonuses if they continue working until the end of liquidation sales. Beauty advisers who meet the criteria will receive up to $1,000 each, according to a company-issued memo seen by CBC News.
But the beauty adviser CBC News interviewed said the bonus won’t make up for what will be lost in commission pay.
“All of us would have been more grateful with them actually just keeping the commission.”
Hudson’s Bay workers can apply for financial support through the federal government’s Wage Earner Protection Program, which provides financial assistance to workers when companies become insolvent.
But Toronto lawyer Andrew Hatnay, who represents a number of the retailer’s employees, said those who qualify will typically receive only a portion of the compensation they’re owed.
“They’re upset and distressed,” he said about Hudson’s Bay workers he’s spoken with. “They’re having to look for alternate employment in a very tough environment now with tariffs and all kinds of other economic problems.”
The plight of Hudson’s Bay employees has reignited calls for the federal government to establish more protections for workers when a company becomes insolvent.
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In 2023, the federal government improved protections for workers with defined benefit pension plans if their employer becomes insolvent. The legislation takes effect in 2027.
Unifor argues workers should get other protections as well, such as for severance pay.
“Focus has to be put on employees … especially when they have invested the major part of their life to supporting the employer,” Unifor’s Gunness said.
However, the Canadian Association of Insolvency and Restructuring Professionals (CAIRP), which represents insolvency and restructuring businesses, argues that workers’ rights can’t come at the expense of other creditors in the insolvency process.
“Enhancing one area without considering the broader impact can unintentionally weaken others, ultimately undermining the effectiveness of the insolvency system,” CAIRP spokesperson Angela Joyce said.
Even if Canada’s newly elected prime minister does initiate more protections, they won’t come in time for Hudson’s Bay workers, many of whom will soon be out of a job — and some of the cash that they’re owed.
