Retail chain now in receivership; employees lose vacation pay

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On Wednesday July 9 2008, the SAAN store located at the Grand Falls Mall closed its doors permanently. SAAN (Surplus Army, Air Force, Navy) was one of the largest retail companies in Canada. The company had started in Winnipeg in 1947. In 1990, SAAN had over 350 retail stores across Canada. However in 2005, SAAN went under the bankruptcy protection act and had to reduce the number of its stores to 142. SAAN went into receivership this June and announced all stores across the country will be closed by Aug. 15.

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In Grand Falls the store closure means a loss of employment for six permanent and four part-time employees. Under the bankruptcy protection act, a court judge from Ontario had appointed PriceWaterHouseCoopers (PWHC) as the receiver of SAAN's assets and properties.

However, there is uncertainty regarding employees' vacation pay. An editor from the Bugle-Observer made numerous phone calls to see in store employees would receive their benefits, but the situation looks grim.

A SAAN's employee from the Grand Falls region provided a copy of a letter from PriceWaterHouseCoopers to the Victoria Star.

"According, on behalf of the company, the receiver hereby provides notice that your employment with the company shall be terminated effective July 10, 2008. Any wage amounts due to you since the last pay period will be paid in the normal pay cycle by the receiver, on behalf of the company. As provided for in the appointment order, the receiver has no responsibility for the payment of any unpaid salary, wages, vacation pay, pension contributions or benefits, payment in lieu of notice (termination pay) or severance pay or any other employee benefits or accrued incentives or entitlements which may be owing to you by the company."

Is there some hope for these employees? The federal government is presently working on a Bill C-55, Wage Earner Protection Program Act (WEPP) under the Corporate and Insolvency Law Policy. Sylvie Heartfield, from the department of Human Resources and Social Development, expects that Bill C-55 will become law this summer.

But if SAAN is declaring bankruptcy before the WEPP becomes law, the employees' additional compensation is lost.

The Victoria Star contacted Mary Clarke, SAAN Store manager in Grand Falls on this issue, but she refused comment.