5 Lessons From The Sears Severance-Free Layoffs

In June, Sears Canada announced it would be filing for creditor protection. As part of the company’s court-supervised restructuring, Sears has been forced to let 2,900 members of its staff go across Canada. Sears won't pay out any severance packages because they have filed for creditor protection, which protects the company from lawsuits while they restructure. Sears also won't pay for any employee benefits or pension plans. Staff who have already retired may no longer benefit from their retirement programs. Even if you're not a Sears employee, instances like this can happen to anyone. Here are 5 lessons from the Sears severance-free layoffs.

Employees are always at the mercy of how well their company is doing financially, and layoffs happen all the time. Do you have a plan in case you're ever laid off without severance? What about if you were suddenly cut off from your retirement benefits?

1. Save An Emergency Fund

- I get it, we sound like a broken record, but there's a good reason for it. Having extra money tucked away in case of an emergency can be the difference between making it or breaking it. You'll still be able to meet your financial obligations despite being denied your severance package. The more you have saved up, the more time you have to land on your feet and find new employment.

2. Save For Your Own Retirement

- Whatever method you use, ensure you’re putting enough money away for retirement outside of your employer’s retirement plans. This way, if they stop paying into your retirement plan, you’re already accustomed to doing it all yourself.

3. Max Your Employer’s Matched Contributions To Your RRSPs

- Get the most out of them while you can!

4. Look Into Extended Medical Benefits

- Look into extended medical benefits outside of the ones offered by your employer. For instance, the Canadian Automobile Association offers the Follow Me plan that guarantees approval, no matter your health, so long as you apply within 60 days of your employment benefits ending. Being prepared with this information is useful. In case should ever abruptly end, you'll know exactly what to do.

5. Walk Away With Something

- Even if it’s just a reference letter from your manager, it can help you find work again. Make sure you have your manager down as a reference - after laying you off with no severance, he or she will have a hard time saying no.

Sears has always been an institution in Canada, something that seemed unmovable and unshakeable. If this type of situation can happen to Sears, it can happen to just about anyone. Be prepared. Take your future into your own hands so that if worse comes to worse, you'll be okay.

Have you ever been laid off? What advice do you have? Let us know in the comments!