Members of the union representing more than 1,500 Zellers workers in Ontario have ratified a new three-year collective agreement.
UFCW local 175, which represents employees at 12 locations, said Monday that the agreement includes wage increases and better severance pay in cases of store closures.
Four of the Zellers stores covered by the collective agreement will be converted into Targets as part of the U.S. retailer's Canadian expansion strategy.
The unionized stores being converted into Target outlets are in Toronto, Oshawa and Brantford.
A fifth unionized store, in Windsor, Ont., which was also purchased by Target, will convert to a Sobeys supermarket. Target has signed an agreement with Sobeys to supply food items to its stores.
Target, known for offering designer fashion collaborations at discount chain prices, plans to open its first Canadian stores in 2013.
The union has started a national campaign asking Target to guarantee that Zellers employees will continue to be employed at the stores changing over and is also asking Target to abide by all of the provisions of the new agreement.
Target has said only that it will give the Zellers employees an opportunity to apply for jobs at its Canadian stores.
UFCW Canada represents more than 250,000 members and represents Zellers workers at 15 stores in Ontario, Quebec and British Columbia.
Target has purchased the leasehold interests of 189 sites currently operated by Zellers Inc. and it says about $10 million to $11 million will be invested to remodel each facility.
The U.S. retail giant announced in January that it would spend $1.83 billion to take over the leases of as many as 220 Zellers stores from the Hudson Bay Trading Co.
It recently doubled its renovation budget from about $1 billion to as much as $2.3 billion to convert Zellers stores to its brand and integrate them into its retail network.
