No Severance for You!

This comment is intended for those employees that were laid off after press reports indicated that Nortel was pursuing bankruptcy.

The act of filing bankruptcy trumps nearly all laws that protect employees rights for pay, severance and a notification period. Bankruptcy laws are intended to give relief from debt that was acquired in good faith that the company is no longer capable of paying.

People laid off and promised severance while Nortel actively pursued filing bankruptcy were hardly dealt with in good faith. At best, they were misled. At worst, it was outright fraud. Bankruptcy protection is not intended to shelter the company or it's execs from willful wrongdoing.

This may open the door to the possibility of gaining better status with the bankruptcy court. Employees filing claims may best be served to consult an attorney beforehand. If documents supporting the assertion that you were intentionally misled can be submitted with your claim, it might give you a better shot at getting some/all of what was promised to you.

It would be very helpful if anyone can find out whether the restructuring bucket was ever funded. If it was not, then there was never intent to pay what was promised. Also helpful would be producing a dated internal email showing that bankruptcy was planned before your severance date. That kind of stuff will probably get the judge's attention.

I was laid off Tuesday afternoon, conveniently scheduled less than 24 hours prior the the big Chap. 11 announcement. I didn't receive ANY of my 60 days pay, nor did I ever get to see any of my severance package....i got NADA. I also called to verify I would still receive my earned vacation time, on Wednesday I was told to expect to see it in 1 to 2 pay periods, Friday they told me it's "now in discussion" How is this possible??

Does anyone have any idea if I will ever see ANY of what I am owed? I understand that the severance pay I may not be entitled to, but what about the 60 days of pay that was guaranteed under the WARN Act? I'm being told to file a claim with the bankruptcy court... I've never had to do something like this, as I'm sure most haven't either. Do we expect to actually receive anything? Ever? What's this process consist of? And what about a class action lawsuit?

I'd love to seek legal advice, but yeah, suddenly money's a big tight right now :( Good luck to everyone out there...it's a tough time for all right now.

Hey NortelExs,

I was laid off recently so no WARN act/60 days payment for me either. Do you happen to know if we can claim this money when we file with EPIQ? No one was able to answer this question from Nortel HR.

If anyone knows please let me know!
Thanks a lot!

unfortunately for you, CH11 allows for many "obligations" to be ignored, so you might want to consult a lawyer to see what you are entitled to. I know money may not be available, but see if they will work and get paid once they get you some money... (called pro bono ? )
otherwise, read as much as you can about CH 11 or whatever it is called in Canada and see if you can read experiences from employees from other big companies who have filled for BK protection before.

It is a tragic day. So many good, talented, hard working people have been misused and mislead.
My advise for what it is worth - if you are talented, hard working and want to work in a positive environment, dust off that resume and start looking. If you are employed still at Nortel you have some time - but not much. The "golden handcuffs" of pension, bonuses and a severance package are gone.
Do the best thing for you, your sanity and your family start looking. Make your job search your #1 priority and Nortel 2nd or even 3rd. Do what you have to do at Norel to keep money coming in until you find a new and better position. Nortel will barely notice with the morale so low.
You will never believe how good a new job can feel. There are jobs out here where you can telework, get good pay, good bonuses and not be flogged daily by the despair. There are well run companies out here who are making money. Believe me when I say it is a great feeling to work at a company that makes money, values its employees and respects your work. There is life after Nortel you just have to take back control and look for it.
I mean all of this with the best possible intentions....I just hate to see all of the pain folks are experiencing.
Go for it!

The executives knew that they would declare Chapter 11 in Jan'09, they already had bankruptcy lawyers working with them well before the end of 2008. They tried to deny it when the WSJ published the story about Nortel.

They also knew that those employees being made redundant before the end of 2008 would be screwed out of their severance.

But, I really do feel very sorry for those employees who have missed out on their payment after many years of very loyal service (many of them very good friends of mine). I hope everything works out ok for them all.

Incredible what they did ? Fire a ton of people just before they file for chapter 11 so they can cut their severance. In my case, I am also cut from the healthcare program that I could continue because I was on a pre-pension leave. Seems that they will cut to 0 a pension lump sum I was entitled a year from now. Oh yeah, the programm offering with a private agency to help people find a new job is also cut. Unbelievable !!!!!

Looks like this big scam was in preparation months ago.

http://www.canada.com/ottawacitizen/news/story....

I like capitalism laws. You can fire people then get on chapiter 11 and cut their severance pay. Win win situation as we often hear in corporations !

In his first GIS in Ottawa Mr. Mike Z. compared Nortel employees to auto factory workers, this is perfect correct, now they are facing the same situationat the same time with his great 6 SIGMA (Why not 5 alpha???) work, now I understand why he made that comment. His first work item is remove the cloude over UMTS, he sold it , now UMTS start earning money, Mr Mike Z. removed the UMTS department and left the cloud in Nortel, thank you Mr. Mike Z.

It is partly true that they will keep the AIP but the way I read it was that it was for 2009, not 2008 so there will be nothing this year. I also believe they said it would change so they are not keeping it. Whatever. This Plan was a joke. Managers were to rate employees by their Contributions. Low, Medium and High. However there was only so much money to hand out so even though a group may have had many HC's, they would get shafted and moved to MC or LC. If a group had all LC's, a few of them would get HC status. JCI level was another factor. Managers were not eligible as they have their own (secret) bonus's. Maybe someone can elaborate on those.
Anyway with regards to the employee Incentive, even being a JCI 3 HC got you maybe 7 grand. Make that 4 grand after tax. That seems like a lot now that you don't have a job but compared to other Company's, chump change. This was even true in the boom yearrs of the 90's. No worker bee got much with these programs and in my opinion, forget what they said. Your not getting a incentive bonus.
As for the Key Employee Incentive Plan they were very clear that very few people will qualify and not to go away from the meeting thinking there is a retention plan. This was stated by some head clown from HR after a Richard Lowe BS session. I must qualify that the winner of the ass kisser award in Nortel should go to Lowe. This puppet was strictly their to rely messages from Mr. Ethical, Mike Z and the rest of the GE hacks.

Anyone know how the Ontario Labour Laws regarding severance plays out against the Canadian Bankruptcy protection rules ?

http://www.labour.gov.on.ca/english/es/guide/in...

Chapter 15 /16 discusses severance but does not indicate impact of Bankruptcy protection. Mike Z has said no severance going forward... but the Ontario law seems to state differently. Does severance fall in line as one of the creditors ? Anyone check with lawyers or Govt ?

P.S. happy weekend

On a side note, Ernst and Young have recommended to keep AIP (annual incentive plan) and a new Key Employee Incentive Plan (KEIP) which would be used to fill executive's pockets and the deserving employee gets peanuts. Another of day light robbery from the "Top Management"

I am one of the 1300 also. Was laid off in sept with pre-pension package. Nortel is now stopping all payments after Jan 14. Will loose more then a hundred thousand $ it seems.

why so much? how many months or salary?

Was on a pre-pension bridge for the next year and a half as per my union contract. The payment is stopped + another big cut on a lump sum due when official pension would begin.

And to top it off, my paycheck was not in my account today.

I called HR and the nice person with whom I spoke told me that there was a technical issue with the transfer and that the money should be in people's accounts by the end of the day or possibly Monday or even Tuesday in the case of the smallest banks.

It looks like employee paychecks in the US at least will be a few days late due to the bankruptcy filing. To the person that questioned me on the other thread about why I would ask if employees would be paid anymore -- well they aren't being paid on time ! My point all along was Nortel is not operating normally.

Yes, you were correct. TongueInCheek again proves himself to be on the side of insanity instead of rational thinking. I applaud you for standing up to him. Here are a few of his quotes, for reference:

"With $2.6 Billion is cash, they can easily afford the interest payment. The bankruptcy statements are pure speculation." - TongueInCheek, Jan. 12th, two days before BK filing.

"Think about it for at least a minute. If any company in the world had a payment that represents 3.85% of their cash on hand, why would they declare bankruptcy to avoid that payment?" - TongueInCheek, ~1 week ago.

Looks like TIC has (ab)used up any credibility he once had, like another person named Mike Z.

OK Desk Jockey, I can admit when I am wrong, not a problem there at all.

However, did Nortel not say that the full cash amount to cover payroll was sent to the US Banks and it was the US Bank's decision to hold the cash and not transfer it to your personal account? Sounds like these US Banks get to make a couple of days worth of interest at your expense doesn't it.

Please explain, how is this Nortel's fault when they paid in full under court approval every single employee's pay. I'm in Canada, and I now that my friends at Nortel all got paid in full today.

So, was I surprised that Nortel filed for bankruptcy protection - absolutely.

Was I wrong in my previous statements on this - absolutely.

As a Canadian citizen, do I want to see a Canadian Technology firm destroyed - not a chance.

Do not try to bind my criticism of falsehoods to some imagined belief that I want Nortel to be "destroyed". Doing so is simply continuing the pattern of deceit that you have consistently engaged in.

Do I want Nortel to survive? Of course I do! As I have mentioned multiple times before, I am proud of Nortel and what it represents. But, like many, I have lost faith in the executive management and the BoD for their continued inaction, denial and disinformation in the face of this crisis and before.

They continue to spout the same "party lines", and for some reason, many feel the need to repeat this as though it was the infallible truth. Spreading of these lies is what has contributed to Nortel's decline, and I, more than anyone, want to put an end to that.

As for your question as to how it is Nortel's fault that the banks wanted to make "a couple of days worth of interest", you are completely misguided. Please try to put 2 and 2 together. Nortel has never been late for payroll. Is it just a mere coincidence that the banks would try to make some extra interest right now? Or is it more likely that they were not sure Nortel was good for the money, and wanted to take a cautious approach?

The point that the original commenter (Casual_Observer) was trying to make is that Nortel does not appear to be operating normally, despite claims to the contrary. I question your motives for attacking him for what you perceive to be "the spreading of lies", when it is you who has been proven guilty of such a misdeed, time and again.

At what cost do you not want to see it fail ? Would you be in favor of higher taxes to bailout Canadian (not even fully Canadian) firms like Nortel ? The free market should let companies like Nortel fail. The same goes for all the banks who cannot survive on their own. Unfortunately we have too much intervention and very little capitalism and now reward failure with bailouts. EDC is nothing more than a glorified bailout. The truth of the matter is if a company cannot compete effectively and make money on its own, it should not survive. No one wants to see failure but it is a healthy part of capitalism that is not currently allowed to be played out. Instead we will get more intervention and more failure because those that are failing are rewarded.

First off Mark, thank you for providing this blog. I know it is widely read by Nortel employees and has been an outstanding source of information over the last year or so. With no severance pay dangled over the employees I hope you will get more readers becoming contributors.

Each year for the last few years every employee has been browbeaten into signing an ethics certification thereby promising to act with integrity at all times. But with $2B in cash, this circumvention of employment law is immoral, unethical and hitting the employees who were the most loyal to the company. It stinks, and even if the company somehow comes through Ch 11 and re-forms as a new Nortel, it would have achieved this by cheating friends and ex-employees out of their legally entitled payments and it would certainly not be a time for celebrating.

I have no doubt that Zafirovski is a good guy, in spite of everything that has happened, I actually like him as a person. But it's obvious that he has been out of his depth since day one; most employees knew it. The solution to Nortel's problems was not six sigma (even Scott Adams called it a “widely discredited fad from the 80’s”) or cost cutting. Nortel needed innovation, something clever, and new commercial successes. The smart people were there, the ideas were there, but Zafirovski and his team stifled innovation and created an environment of fear and R&D paralysis. I can't think of one innovative, commercially successful product that has come out of Nortel under his stewardship, and considering some of the absolutely brilliant people working in Nortel today, that takes some doing. The day he hired the lady from the coca cola bottling plant as Nortel's VP in Global Quality, the emails flew around realizing that he really didn't get it. The shocking thing is that to this day Zafirovski and his team still think they are on the right track and nobody can tell them otherwise (I'm still waiting for somebody to apologize, admit they were wrong and say they are sorry).

As for the BoD, your responsibilities are with the shareholders and with the employees and you have failed them both. Even ignoring your pre-Zafirovski excesses (including the scandalous golden handshake that you awarded Owens), you watched the company lose 80 percent of its value, then gave him a 20 percent bonus. You then watched it lose 98,99 and then 100 percent of its value...the worst stock on the TSX in 2008 (narrowly beating out a bankrupt mining company), and still you did nothing. I'm intrigued...what was your threshold? When were you planning to step in...or make a statement? So many people have lost so much with this company, lives have been ruined while you were the directors...I don't know how you can sleep at night. The leadership team that you have put in place has lost the confidence of many employees; being that they took Nortel from where it was, to where it is now, I don't see how those same people can be the best people to get Nortel back to where you want it to be.

I feel for every employee who put in years of great service who was laid off with a severance and is now having that package revoked. And for all of those employees who will be let go in the next few weeks and months during round seventeen of layoffs. It seems that employment law which clearly lays out the bare minimum terms of notice and severance, that was put in place to protect people from situations like this, is no match for unscrupulous operators like the Nortel board and “leaders”.

There is a new word for employees now. It's called "slaves", and though the term is not used, it better reflects now the current Nortel executive has treated their workers.

Techorama, I could not have said it any better. Mike Z. and his team of GEniuses has betrayed us, betrayed shareholders and betrayed the public at large. I have a tough time figuring out whether they have done this as pure malice, or whether they are truly this inept to believe they were, and continue to be, "on the right track."

Anyone else not get there paycheck as normal? This is BS. It has always been in my account at this time on friday!

As I am a member of a larger bank as depicted in the Corporate email, no deposit was made today and yet at the same time, I am being asked to go above and beyond for the customer. Since I promised when hired to keep my end of the bargin, I will continue to do so. Too bad that Nortel can not.

So basically you are working for free after closing time today. I see you are continuing to drink the kool-aid they are feeding you. The lines between capitalism, socialism and slavery are very blurry these days. If I were still an employee, I would wonder if Mike Z and other execs got their paycheck today. But I guess that information really isn't publicly available.

HR sent out an email today regarding this. Because of the bankruptcy filing, it appears banks are waiting a couple of extra days to deposit checks.

Well, Congratulations Mike “GE” Z and crew – you’ve managed to ruin to lives of thousands of people in your six-sigma black-belt fantasy world. You have infuriated the remaining employees, and I seriously doubt that you are going to find many that are willing to swallow your lies any longer. Watch and see – the customers (what little you have not driven away) and remaining employees will experience a moral drop that you may have never seen before. Try to get them to comply with your wants any longer. Why should we show allegiance to you when you have failed us.

Not only did you and the minions not listen to the employees when we told you that your ideas would not work in our environment, you got rid of some really good people that knew your plan was a recipe for disaster. I hope that you have enjoyed your little ego trip, and that the remaining ride you have is as bumpy as the ride the rest of us are now faced with. You have let perfectly good business run out the door. You broke down relationships with customers. All because you refused to listen to those of us that knew the business. Ethical behavior? I think not!

For those of you that are not aware, as soon as the new management team came onboard, they began preaching “Ethics”. Even after the president of Enterprise solutions, Joel Hackney, proved that his behavior was the most unethical of all by attacking a young woman in a road rage incident, Nortel continued to shove ethics down the throats of the employees. To top that off, Mike Z forgave him and promoted him. I think it is about time that Mike Z and his minions drink a big glass of ethics themselves.

http://www.allaboutnortel.com/2007/02/22/does-z...

Last week, Nortel made the big announcement that they had developed a cutting edge web application, web-alive. (Sorry to break this to the developers, but yours is just a 2nd-life knockoff)

http://www.projectchainsaw.com/

It infuriates me to think of how much money was wasted on this R&D project. Cisco, Lucent, and the others must be having a lot of fun mocking Nortel on this one. And all while perfectly good business was walking out the door due to customers suffering due to our processes and support. Was this the most ethical thing to do for the customers, employees, and stock holders? I don’t see how you could say yes to this, but then again, you all enjoyed some great salaries and bonuses on the Mike Z train.

You promoted people to management positions because they would follow you to the end, not based on merit. Even though most of us could see this, we complied. Maybe you knew what you were doing, maybe you didn’t. As it stood then, if you didn’t know what you were doing (and I think we now know this is proven) we were all banking that we would get a severance to cover our bills when you walked us out the door. As a matter of fact, in your many Z-mail updates, you continually assured us that there was money in the bank to keep you going. Great ethical behavior sir.

So now there are thousands that will suffer (not you guys – you got those bonuses, remember?), there are many that are faced with an immediate uncertainty of their job future. No security left. What is our motivation?

Can we do anything about this? Would it be possible to get a suit going (maybe against the people involved and not the company)? I wonder if the US employees contacted their congressman, if there is any intervention that can happen to prevent you from walking away unscathed? I don’t know the answers to this, but I can assure you that I will be finding out. I am sure others will as well.

Your views reflect many within Nortel's rank, though obviously not those at the "top".

Those who didn't believe Mike Z.'s ramblings were ostracized as not being "team players" or those who didn't "believe". How strange that truth and honesty are now derided with these ridiculous derogatory musings.

Those who did believe have had their faith tested and ultimately destroyed by this reckless and irresponsible GE "management". (I put "management" in quotes because they obviously cannot manage anything)

To those who continue to believe the lies: the above comment is the dose of truth that you need. Is it not insane that bankruptcy is now equated with a "sound and stable financial footing"?

Nortel

Oh Nortel, how you once were so great.
I just kept on believing,
you kept having to RESTATE.

For the analyst, Nortel was their top pick.
The stock just kept rising
and then it would split.

Roth bought companies, Nortel never used.
Buying Nortel stock
meant you just couldn’t lose.

But how did we know, that the future was cursed?
Nortel financed all their orders
then the tech bubble burst.

Dot coms that never earned a dime,
Nortel stock price plunged
and investors all whined.

Everything will be okay, all the analysts said,
John Roth was CEO of the year
or haven’t you read?

Roth resigns with millions may he rot in hell,
Here comes Frank Dunn,
boy, he has the same smell.

Dunn was the CFO, while Roth was the boss,
Roth & Dunn are mostly to blame
for the billions Nortel loss.

Slowly the stock began an upward steady climb,
from sixty odd cents to
twelve bucks shy by a dime.

But haunts from the past they would await,
Dunn and his friends
are caught in “bonusgate”

They inflated the revenue from previous years,
Nortel became a joke
amongst all of its peers.

Dunn and his friends, are fired with cause,
now they all hide behind
Our pathetic Canadian laws.

Millions of investors are now all fed up.
but wait, in walks the Admiral
and another RESTATE.

He did not do much we all can agree,
He also left with millions
The Admiral just headed out to sea

But alas, the rumors could they be true?
Here comes the best CEO
from right out of the blue.

He has a foreign name; it’s looking real sunny,
But Nortel must wait cause
Motorola wants lots of money.

So again Nortel pays millions, BOD says he will be great.
Meet Mike Zafirovski and by
the way another RESTATE.

We will do what is right, we will be squeaky clean,
I’ll hire the right people,
we will get real lean.

Mr Z it’s been over three years look what you.ve done
Nortel’s market cap is now
Almost next to none.


The stock is down over ninety-nine percent,
the pensioners wonder where
all of their money went.

To settle the lawsuits, you just printed more shares,
Mike killed all the bulls,
In stormed all the bears.

You promised Nortel would again be great
Three to five years is what you
asked investors to wait

Throw in the reverse split, the layoffs and cuts
Nortel kept bleeding billions
But giving yourself that big raise took real guts

Analyst once screamed Nortel was a good buy
After a hundred years of history
sadly Nortel, it's now really the final good bye.

last one out turn out the lights.
Mike Z has left the building not taking any calls.
contact fatzoff@yahoo.com for his home address

I hope John Manley never has political aspirations again, being one of the Nortel board members who voted to try and screw Nortel employee's (past and present) out of every from their pension to their severance.

It infuriates me to see that the Management will continue to draw their highly inflated salaries while the employees get screwed and have to scramble to save each and every penny. I think it is not fair to the employees to take their sense of security away from them while the same management team gets to keep their jobs. I will call it fair if they replace the top 2 levels of management with new management team and give the boot to the current management. Plus have them pay back their salaries that were given to them over the past 2 years.

I honestly think Nortel’s demise is much bigger than just another company failure. Accounting fraud, management greed, in competency, nepotism, cronyism and forced optimism all contributed to Nortel’s failure.

All Mike Z did was Xerox the GE strategy and started implementing it in Nortel with no understanding of telecom and software industry. Instead of a more nuanced approach, the GE management practices were pushed as is with no consideration to industry, culture and technology. For instance I believe Six Sigma was over hyped and in majority of the exercises you ended up with a nice chart package instead of real savings. There was a lot of hype around GE and every one bought into perhaps because we wanted to try something new.

Mike Z and his cronies lacked vision and strategy and their entire turnaround plan hinged on the success of cost cutting, in other words moving people from high cost to low center centers.

Well now we (employees both current and ex) are the ones that will pay the price again. Some of us only a couple of pay checks away from personal bankruptcy or home foreclosure. While the management keeps their jobs and goes about again building their plans for driving down cost, improving employee productivity, creating new synergies, driving vertical integration, improving competitive advantage, leap frogging, engaging customer passionately, executing, driving CSAT, driving market share, improving margins etc etc.

We should all be mad as hell on what is happening in Nortel. Employees are getting screwed while the management is hiding behind chapter 11. Maybe a peaceful protest outside the capital is in order to show our outrage.

We have to put an end to corporate greed and corruption…..some of us have to take the lead.

Where are the Canadian politicians? Who is going to rein the corporate corruption?

drinking_the_koolaid, you are correct, I watched as 1 by 1 the people I worked with were let go. Nortel was keeping all the chiefs and getting rid of the indians and nobody knew why. In the end my manager had 6 people working for him and at one time he had 32, 1 of them was an administrator and the other was a site supervisor so that left 4 of us to work. Then when they started the Six-Sigma mess the people they were laying off were turned into black belts. In my opinion Six-Sigma was as valuable as the TL9000 certification neither accomplished nothing but burn through cash like nobody business. Once all the manufacturing was outsourced there was nothing but trouble with the equipment we received and you could not get a good cable for any equipment so everything was done twice.

A how about my severance? I invested money in this dud relentlessly, hoping they would finally turnaround. Soon the commission to sell my 4920 common shares will be more than they are worth. Where did my REAL, hard earned, after tax money go? Somone got it. Please, someone explain where that REAL money went.

Fatzoff, I sympathize. My loss will be $27K. I averaged down to about $6. The company would only need to be worth $3B for me to make my stupidity go away. Where did my $27K of my REAL, hard earned, after tax money go??? Someone got it...WHO?

I was one of the 1,300 laid off in December, who are now approaching the end of their 60 day period, only to be told that the severance that they were promised, that they agreed to, is gone.

When I called into HR today, I was informed of this, informed that I wouldn't even get paid for the entire 60 days, which ends on Feb. 2. Tomorrow's my last paycheck. The vacation time that I had accrued? The HR rep had no info on that. Who knows if I'll get that. Benefits? Gone after Feb. 6.

How do I feel right now? Betrayed. Bamboozled.

I had always told folks that I stuck with Nortel as long as I did because they treated their folks right -- well, when they weren't laying those folks off. Even after I was laid off, I took the approach that they were going south for whatever reasons that have been discussed ad infinitum, but in the end, they were still doing right by the people let go.

Well, you fooled me, Nortel. After 15 years of busting my rump through countless hours of unpaid overtime, this is how you treat me? And for what? The severance that they would be paying is a mere drop in the bucket in the grand scheme of things. When you have sales in the billions, when you have more than $2 billion cash on hand, don't tell me that you can't pay us or that it's a necessary step. What would it cost to make good on your promises? Tens of millions?

As a result, I'm now scrambling. I'm looking at what I've got in savings. I might have to dip into what's left of my 401(k). All this, just to keep a roof over my head and food on the table until I find my next gig... just because Nortel management decided that the relatively negligible cost of making good on their promises was a cost that was too great for them.

I have no idea about bankruptcy law. My life has been software design. I don't know if there's any legal action that I could take. The impression that I get is that the answer is "no." As is usually the case, the little guy gets screwed. But if a class action suit ever came out of this, sign me up.

(And people wonder why people of Mike Z's ilk are usually the first against the wall when governments are overthrown violently.)

OneOfThe1300 they have announced that any accrued vacation time will be paid for any future layoffs and given the way it was stated I would assume any past employees as well. They basically said that was already earned hence it would be paid for. Also you received nearly 60 days of money and your entitled to line up with the unsecured creditors to try and get the remainder of the money (although you probably won't get a lot). Anyone laid off today will get ZERO. Imagine if that had happened to you. Your situation suxs but it could be a lot worse i.e. you could have gotten laid off now...

Also you don't understand the cost of the severance packages. The estimated cost for 2009 was $300M. Nortel needs $1B to keep the doors open and they have ~$2.4B. That leaves $1.4B cash they can use to invest with. Nortel is trying to survive, spending over 20% of their remaining cash on employees severance packages would be stupid for a company that's trying to turn around and become viable again. I don't know if you were around for the last cuts but at that time Mike Z said that more ppl didnt get cut because NT couldn't afford it (this is amazing if you think carefully about it!). Chapter 11 fixes that situation.

I was one of the last cuts in December. And yes, that's what they told me -- that they couldn't afford to cut more.

It would've been one thing if they had told me from the get-go that there would be no severance. Fine. It sucks, but it wouldn't exactly distinguish me from countless other people who get laid off and get nothing. What burns me up is that they went through this whole song-and-dance about a severance in the first place.

There wasn't any dramatic change in the company's fortunes between that time and the point at which they took this step. There wasn't some huge dramatic event that suddenly changed their financial outlook. They were rapidly headed into oblivion then and they still are. The credit market is still frozen. The only thing that's changed is that people have moved on with their lives with the assumption that the severance agreement that Nortel put into writing and that they signed would be honored.

It's the lack of integrity that burns me up. Every year, we employees had to go through the ethics certification and one of the key points was making good on your word. Apparently, Mike Z and the board apparently don't have to.

"The more corrupt the state, the more numerous the laws" - Tacitus

No where more does this apply than to the current Nortel executive. All this talk about ethics and integrity, when what they have demonstrated has been the exact polar opposite of this.

First, there was the stacking of the management team with cronies and yes-men. Then there was looking the other way after Hack-Attack demonstrated his true colors. Then finally, there were the outright lies and attempts to deceive employees and shareholders.

Do they even believe themselves anymore?

I too feel for you. Your post makes me feel very, very, angry.

Mike Z and his incompetent cabinet are a cancer and have destroyed many investments, careers, and pensions. And yet they are still at the wheel. U-n-b-e-l-i-e-v-a-b-l-e.

What would the board do if the remaining employees refused to show up for work until MZ and the losers he brought in were removed? What if the remaining employees refused to show up for work unless severance and pension commitments were honored? Is the board even awake? Would they notice?

The employee base has a lot of power, but not as individuals. That's the problem.

I feel for you.

I have no idea about law either, but I believe you are entitled to the severance as part of your contract. You may want to contact legal aid to represent you.

Unfortunately, because of the bankruptcy process, you may be in for a long wait even if you do get your money, and even then, it'll only be some of it.

Thanks to bad business practices, Nortel has accumulated a huge amount of debt and you can now be seen as yet another creditor, who has to "get in line" to get their dues.

Sorry for your situation. Stay strong, don't let this destroy you - you're better than that.

People , here is the local law.

http://www.labour.gov.on.ca/english/es/guide/in...

Plus, NT is just under protection, it is not in receiveship yet.


So if my understanding is right. NT can be protected from the old debt, but can't owe the new debt from the day they filed CCAA. And they still havve money to do what tthe law ask them to do.

Incompetence fueled by greed.
How many more people must get burned before they realize that this Company is all about lies and half truths. Mike Z can spin and spin but the fact is he put the final nail in the coffin. Using lame programs such as 6-sigma, black belt etc. may have been fine at GE, but he never had the vision to realize this was a different ballgame. When layoffs came it would be 1000 worker bees to one Manager. Go figure but these were his GE pals and burned out Nortel hanger- ons like Richard Lowe.
No this is not "hindsight". Insiders/employess could never figure out what this guy was trying to prove or where he was going.

This guy is cold hearted. Every time he spoke he proclaimed his love for the employee. Well he just screwed about 1300 out of their hard earned severance. and pensions are in no where land. This is a deliberate attack so that he can save his sorry ass. He also said he cherished the shareholder. Well 75% of Canadian's were share holders and their all bust. This Company did 10 billion in business last year. How do you drive a 10 Billion dollar Company into Chapter 11? Z can now add that to his resume. The Z man thought he was getting a bargain in China so he let go some of the top performers. The legalities and China restictions alone could bankrupt a company. This was a Great Canadian Company.
As for Vendors and Suppliers, do not believe a word that is spoken. It is all lies. Nortel only survived this long on the hard work of the worker bees. Extra hours for no pay, late nights etc. Bail out and cut you losses now. The motivation of the hard working employees that are left and that can help you is gone.
One employee with over 25 years of service, 66 years old, laid of in December 2008 is now screwed. Does not get a dime.
Many employees took double whammy s*&$ kickings on the stock over the years. Yes it was their choice to invest, but the Management always painted a rosy picture. Now they get the final knockout punch.

No ask yourself these common sense questions.
Would you trust a CEO that kicks his own people when their down?
Would yo do business with a Company where every employee is angry?
Would you do business with a Company whose Engineering and Technical support is completely in the hands of inexperienced workers in China, Turkey and India?
Would you do business with Company in Receivership?

That's ok, what comes around goes around.

Around 2001, everyone in USA was getting 2 weeks plus our holiday pay when riffed. Nortel *was* a great Canadian company but lost its way starting around 1996. Today Nortel needs strong leadership and a new business model to viable. Today its Internet road kill. All of the executives over the last 10 years should in no way get any bonus.

I just talked to some people who are not going to get the severance they were promised and some who will lose part of their pension. They have houses, spouses, children, and all the usual expenses. I think it is the height of hypocrisy and hubris that Mike Z and his band of overpaid execs are still getting paid after bankruptcy and these folks are getting screwed.

The severance situation is worse than mine, but I applied to get my pension last month. They WERE going to cut the check on January 31. Emphasis on WERE. My pension may be locked up for 30 years.

Another one of endless punch lines is how they reiterated working in the employee and shareholders best interests over the years.

Employees were cut on an ongoing basis, their benefits, their stock options, and now severances pulled from under them with debtors standing in line before they do not get them at all.

Shareholders saw their holdings tank from over 100 dollars presplit at its peak to a penny today, delisted, and bankrupt,

so much happy talk, even a $20 buying opportunity around a year ago by an unrepentant green first time CEO who led by example trying to legally manipulate his own companies stock. As is promoting than firing his green and criminally charged pal was not bad enough.

Everyone reiterates Nortel's exorbitant management pay practices, NT's CEO makes more than BCE's, is as ironic as OSC Chief making a fraction of SEC's managing less and with no teeth. What a haven Canada, even RCMP charges past management than DOJ who hand out dramatically stiffer sentences as a deterrent for one of the largest frauds on record.

This obvious injustice is as profound as endless other punch lines. The OSC and EDC acting contrary to what they are there to do, by protecting the crooks than investors (with so many still at Nortel hard to find and no fine) to exporting jobs than product.... astounding

I have been disgusted with company's ongoings for some time now and it has not been easy being a stalked and slandered critic swimming against the tide only to be proven endlessly correct in commenting on the most obvious. Even their cheerleaders are relentlessly and profoundly unethical to this very day and I question who they really are.

Always the innocents led to slaughter like their employees and investors, never the by far from destitute fat cats at the trough protected by enormous political and legal theatrics, under safe harbor, and with board members on the voting audit committee to approve lottery sized pay, bonuses, severances, retirement packages, etc., as they rewarded financial innovation printing paper and selling assets to live another day while losing money...and unable to minimally formulate a plan or any turnaround lest get their long extended repair of books in order the SEC finally monitored after so many insider only CFOs.

It is so endless. More should rejoice in Canada's version of Enron's departure I should think. Poetic justice prevails where at least a moral majority have won this bloody battle against tyranny and deceit.

I do not believe I am not being too hard on a company that I never dispassionately extended the benefit of the doubt as so many others did, protected under safe harbor, amid endless contradictions to destroying all credibility . After all, who proved to be right yet again. Them?

Poetic justice!
None of the ‘execs’ that were dismissed did anything worthy of any type of severance package; all were useless, self-promoting opportunists…--bb

they may have asked for a slum sum or payout, instead of monthly severance, so they might not suffer at all

I mean to say lump sum ;)

This is devastating news to those recently laid off. It's probably equally devastating to the many Nortel employees that I know who were continuing to work there for only a single reason: the hope that they would be able to collect their severance someday. Expect the bad morale and attrition there to only get worse.

The funny thing that nobody has mentioned yet is that ultimately, it's the Canadian taxpayers who are going to get pinched by this, because those ex-Nortelers will soon be collecting EI, instead of living off of their severances.

Meanwhile, Nortel is sitting on 2.4 BILLION dollars in cash. I don't think this story is over, as not everyone is going to quietly into the night without at least considering legal action.

Afer the Z team took away the pension, the severance package became the ONLY reason a lot of us didn't quit in last couple of years. I turned down lesser paying jobs outside of the company ONLY because I expected a decent severance package to tide me over until I got suitable employment elsewhere. Now I've got nothing except maybe a few dollars from unemployment insurance and the jobs I was considering last year are no longer available.

Meanwhile, you can bet your last dollar that the GEniuses will fight to the bitter end to make sure their lottery sized paychecks aren't cut by so much as a dime.

stillatnt

good luck. there can be as many laws on paper as you want but once there is no money to payout thats it. thats why its bk protection. even if they layoff people, they would just join a long list of creditors and usually they are last in line.

you can sue do whatever you want but to no avail. save as much cash as you can this point on.

I am willing to bet a major restructuring plan will be announced within weeks.

I took every dime I could. People thought I was nuts but in hindsight one of the best decisions I ever made. In response to the question on exec severances. They already have pre-bankruptcy termination agreement of up to two years of salary, bonuses etc. So they are covered. They may get a fraction under court supervision but they will get a pretty good cheque. Retention bonuses will make up for that before they get to that stage.

Sorry to tell you StillatNT, but no, there are no "local labour laws" to provide for severance.

For those employees in Canada, wages and vacation pay are protected under WEPP, to a maximum of $3K. The legislation (bill C-55) was passed in 2005 and came into force in July 2008.

Under the legislation, wages owed for work within the past six months are higher priority than any other creditor (secured and unsecured), to a maximum of $2K.

Termination and severance pay are NOT included.

If the employer is totally insolvent, one can apply to claim the money from the Canadian government.

http://www.hrsdc.gc.ca/eng/labour/employment_st...

One part of all this that is particularly galling is that less then 1 year ago, a number of top executives of this train wreck, including Mike Z, received pay increases of 20% or more.
http://www.canada.com/ottawacitizen/news/busine...

You can also have a look at Mike's compensation if you want to feel extra sick:
http://www.reuters.com/finance/stocks/officerPr...

thanks for making us sick for the weekend :sad:

I believe that in the US, severance was paid out over a period of time, not as a lump sum. So anyone getting a standard US package is in trouble. In Canada, Nortel seems to pay a lump sum or sums so you do not have to wait for all your severance, so Canadian employees previously laid off may be in better shape. I wonder what packages were given to the recently laid off senior execs like Lauren and John? I wonder what happens to MikeZ and his lucrative employment contract? Theoretically, the contract would be part of the bankruptcy and could be negated or renegotiated by the judge or bankruptcy trustee, I believe.

My ex-wife pretty much did the same with my Nortel severance in 2007; I never saw a dime of it

But yeah, just last month a few freshly fired lifers were talking about how their (optional) 401(k) stock purchase plans were worthless, that they were too old to get another decent job at equal pay, but luckily they had a financial cushion in the form of severance keep them afloat over the next several months.

Quel bummre

I am glad, I quit and took every dime I could from Nortel and never looked back. Who knows how safe anyone’s retirement is with Nortel at this point. The best thing I ever did was leave Nortel now my quality of life it substantially better and zero stress. None of my work comes home with me like it did at Nortel and when I am off I only have to think about what am I going to do with my free time. I feel sorry for the people that are still working there and hope the best for them but the future does not look too bright at Nortel right now. The one thing I miss about Nortel is the people I worked with and in my opinion some of the best people in the communications business but I would have to exclude management from that statement.

I agree, I quit a little while ago to take another job and I've never been happier. No more running around like a chicken with my head cut off, changing direction one day to be followed by another change of direction the next day.

Poor management at all levels seemed to be the problem. There were no middle managers that had enough sack to push back when they were given stupid initiatives and pointless Six-Sigma projects. Management is 99% yes men at Nortel.

The icing on the cake for me was that I asked for a package a month before leaving for my new job (For my financial benefit and to possibly save someone in my team from the axe). I was told there were no layoffs, only to find out that a week after I left 2 people in my team were let go. That confirmed that I had made the right decision.

PS: My opinion on management is obvious, but I still believe that the low level staff are some of the most talented and hard working people in the industry. I would help anyone of my team members land a job where I work without hesitation.

"zero stress" - what kind of job is that?
also if you quit your job you get nothing, only people laid off can get a package

Well, Mikez when I say zero stress I come in and only have to do my described job not 10 other jobs the management says I have to do that day. On top of that I only work for one manager not 4 people that decide I work for them as it was with Nortel. I worked for Nortel for over 19 years and it was the company I loved and you would not find anyone in the company that eat, sleep and drink Nortel more than me. I could have been the Tony Robbins of Nortel but that last 8 years were the most miserable time of my life. In 2003 I had a Job offer to leave Nortel and turned it down because I thought it would get better but by 2007 I had lost all hope. On March 2nd 2007 I got on a plane for the last time and when it landed I felt as if a huge weight had been taken off of me. No more email, conference calls or reports to do. I had so much free time I did not know where to begin. I also tried to get a severance package but I was told my Succession skills were too valuable to let me go. So I waited a couple of days and informed Nortel of my leaving and I quit on Friday and started a new job on Monday because of the contacts I had. Trust me I wanted a package but I was not going to be treated like a Guantanamo prisoner to get one.

Nortel taught me one big lesson and that is money is not the most important thing in life. Now I sleep in my own home and bed every night. Knowing what I know now I would almost rather live under a bridge that go through what I did at Nortel for the last 8 years that I was there.

No severance is indeed a very bad thing from the point of view of current employees and those recently let go. However, I am pretty sure what you interpret as a 60 day waiting period was because for the first 60 days after a layoff notice, the employee is getting his or her regular paycheck as if nothing happened. Then severance would kick in after that point. So I think everyone has been getting what they were expecting up until this week. But anyone planning on a cushion continuing beyond this point is indeed in trouble.

I think local labour laws may override this heartless decision by MikeZ and the board, for example, in the Ottawa region the law is as follows, can bankruptcy protection over-ride local labour law?

SOURCE: http://www.professionalreferrals.ca/article-142...

According to employment and labour lawyer Michael Sherrard, of the Toronto-based firm Sherrard Kuzz LLP, “One of the most significant requirements under employment standards legislation is the minimum standard for notice of termination and severance pay.” In Ontario, employers are required to provide notice of termination to employees who are terminated without cause who have been employed for three months or more at the time of the termination.

This notice of termination requirement increases with each year of employment to a maximum of eight weeks’ notice owing to an employee who has been employed for eight years or more.

An employer is also required to provide an employee with severance pay if, at the time of termination, the employee has been employed for five or more years and the employer has a payroll of $2.5 million or more. Severance pay is also tied to the employee’s length of employment and increases for every year of employment to a maximum entitlement of 26 weeks of severance pay. For example, an employee who had 10 years of employment at the time of termination, with an employer who had a payroll of $3 million, would be entitled to 18 weeks (10 weeks of severance pay and eight weeks’ notice of termination).

The ex-nosebrowser John and Lauren should have been fired instead.
It's good that they don't receive any severance (they probably don't need it anyway). I feel for the people who were let go late last year and the rest of sitting duck employees at Nortel...

Why would anyone continue to work when you could be tapped on the shoulder at anytime and told "good bye, your number is up" ?

Now, is no different than any time in the last 20 years. In the 15 years I was at Nortel I was always just one step ahead of the layoff list. Nortel had the policy of continuous layoffs to keep people afraid and working hard while at the same time hiring new blood.

This is an evil policy that keeps people stressed and unsure. "Should I buy a house or a car? I hear there's going to be a layoff next month." It's no way to live.


There was a black Friday around 1993 where managers started calling employees from my department into their offices. When they came back they put their coats on and left with out a word. I was never more anxious for quitting time, than on that day. I new that if my name hadn't been called before then, that I'd be safe. By the end of the day I was almost the only one left. Gratefully, I rushed past a sea of empty cubicles on my way out the door, knowing I'd be back to work another day.


5 years later, I was glad when the axe finally fell. It was like a weight had lifted. Some of the places I worked after that seemed like heaven in comparison.