While shoppers across the country are wondering whether Target’s Canadian move is good news, Zellers employees in BC have had a different concern in mind. The Zellers story at Brentwood Mall in Burnaby is a unionized location, which is scheduled to be closed early next year. It would re-open as Target after six months to three years.
Unfortunately for the workers, the British Columbia Labour Relations Board (BCLRB) ruled yesterday that Target Canada’s takeover did not make the US retailer a successor employer under BC's Labour Relations Code.
Although Target is taking over the store’s lease, pharmacy records and merchandising relationships, the BCLRB found that the takeover did not count as a continuation of the business. The Target brand was “unique and distinctive” enough that it was not acquiring the business of Zellers, just the location.
Target argued that while there were benefits to past Zellers customers shopping at the new store, the main benefits for the company came from the location. It is considered more “upmarket” than Zellers so it would attract a range of new customers. The company also argued that the lengthy gap between one store closing and the next opening meant locals would have moved in or out of the area, and any cross over between the two companies customers would be minimal.
According to Heenan Blaickie employment lawyer Julie-Anne Caridnal, the decision could expand a purchasor’s ability to argue against a successorship application based on a “change of character” of the business, thus making brand presence and awareness an important consideration for established retailers looking to enter the Canadian market.