Law Times

PAGE 12 Blockades common at insolvent auto-parts makers A FOCUS BY GLENN KAUTH Law Times common at insolvent auto-parts makers across the province. Th e trend picked up speed last s the economic clouds darken, blockades are becoming increasingly July when workers at Progressive Moulded Products Ltd. in the Toronto area protested the clo- sure of 11 facilities. In that case, employees were fi ghting over sev- erance pay owed to them after the company went bankrupt. Typical in such disputes is attempts by automakers such as General Motors to remove equipment from the plant. Fear- ing their auto-parts suppliers are about to go under, the auto gi- ants bring in trucks to take the equipment away, sparking worry among workers that their em- ployer will close without paying all the money they're owed. More recently, workers blocked Brampton auto-parts maker SKD Automotive Group following a similar scenario in December. Again, the issue was severance pay for more than 200 workers. Th e protest ended with the courts acknowledging GM's right to remove the equipment. An agreement allowed the com- pany to continue production while it sought a sale or reached a deal on severance with the Ca- nadian Auto Workers. Th en in February, the block- ades hit Waterloo when employ- ees at Bauer Industries began a fi ve-day demonstration to fi ght for wages, vacation, and sever- ance pay. Th e 35 workers found out on Feb. 13 that they would be out of work until further no- tice, according to the CAW. Th at blockade came down as well when the union and employer came to an agreement. Finally, workers at Aradco Management ULC in Windsor set up another protest in mid- March after learning the com- pany was laying them off . Th ey, too, were fi ghting attempts to take equipment away in order to back up their claims for wages and severance pay. "It's defi nitely a refl ection of employees who feel a high amount of frustration that there's no way to recover amounts ow- ing to them," says Andrew Hat- nay, a partner with Koskie Min- sky LLP in Toronto. A lawyer who regularly rep- resents employees and unions in bankruptcy matters, Hatnay says the auto-parts sector has been particularly prone to such actions. Th at's because the ma- jor automakers and their sup- pliers depend on each other for continued production in order 'Things are pretty grim,' says Andrew Hatnay. to assemble a fi nished vehicle. Individual suppliers rely on each other as well since they often produce only one com- march 23, 2009 • Law Times Labour Relations Board Remedies in Canada, Second Edition Jeffrey M. Andrew This work covers the vast array of remedial orders issued by and available from the federal and provincial labour boards and provides an excellent procedural overview of the legislation. It also compares similarities and differences between jurisdictions across Canada and includes extensive case law to help expedite your research. Topics covered include: • • • • • • • • remedial certification and other remedies during organizing drives bargaining orders and settlement of agreements termination of bargaining rights unlawful work stoppages cease and desist orders reinstatement and rescission of discipline discretion to grant or deny relief and conditions and undertakings compensation as remedy ... and much more! Instead of searching through various incomplete sources, this resource offers you a one-stop comprehensive source about labour board remedies. Labour Relations Board Remedies in Canada, Second Edition is updated annually and is in looseleaf format so you will always be current on new rulings. This is an indispensable reference tool for anyone practising labour law in Canada. ORDER your copy today Looseleaf & binder • $199 • Releases invoiced separately (1-2/yr) P/C 0404032000 • ISBN 978-0-88804-480-8 The only comprehensive source with everything you need to know about labour board remedies Earner Protection Program last year that goes some way towards resolving employee claims in bankruptcy cases. It provides payouts from the federal gov- ernment for back pay, vacation pay, and pension contributions but doesn't yet cover severance. While recent changes to the pro- gram in January's federal budget will address that gap, they're not yet in force. At the same time, Hatnay points out the Wage Earner Protection Program doesn't apply to cases where the company is undergoing restruc- turing through either a Compa- nies' Creditors Arrangement Act plan or a Bankruptcy and Insol- vency Act proposal. As a result, he says the issue of recouping wages and other types of pay re- mains very much a live one. But Alex MacFarlane, a part- ner practising in corporate re- structuring and insolvency at Fraser Milner Casgrain LLP in Toronto, says exempting pro- ceedings under the two acts from the WEPP makes sense. "It's a balancing act," he says, adding that plans and proposals under the two laws are meant to provide troubled companies with fl exibility on issues such as severance pay because the "in- tention is to allow a company to continue as a cleansed entity." Restructurings are, of course, ponent of a part, Hatnay adds. "It's a badly aff ected area. It's also an area where the compa- nies are quite interdependent." Th e federal government, of course, introduced the Wage a diff erent scenario from a bank- ruptcy or receivership where the company might end up shut- ting its doors. "It makes sense not to burden a company that's restructuring with those costs," MacFarlane notes. Hatnay, however, argues oth- For a 30-day, no-risk evaluation call: 1.800.263.2037 Canada Law Book is a Division of The Cartwright Group Ltd. Prices subject to change without notice, to applicable taxes and shipping & handling. Andrew_LRBR (LT 1-3x4).indd 1 LT0323 erwise. In court right now, he's representing members of the United Auto Workers at a com- pany called Windsor Machine and Stamping Ltd. in southwest- ern Ontario. It found itself in trouble last summer, prompting the maker of parts such as seat components and exhaust systems to seek protection under the CCAA. Now, it's seeking court approval for its reorganization, something that 3/17/09 3:33:48 PM fi ghting for termination and severance pay for laid-off work- ers through the CCAA proceed- ings. He made his arguments in March and is now waiting for the judge's decision on the matter. Recent proposed amend- ments to the CCAA and BIA, however, should likely address that issue at least somewhat. Under changes to the acts that have yet to take eff ect, a court wouldn't be able to approve a restructuring plan or proposal unless it includes payment of employee wages. Th at means employees will get additional protection once the legislative changes come into force, but whether the pro- visions will cover severance pay is still unclear. Until then, there- fore, the blockades at places like auto-parts plants will likely con- tinue. "Th ings are pretty grim," says Hatnay. leaves Hatnay LT www.lawtimesnews.com

• Cover
• Competition Act
• Dead Time
• Focus On Corporate Restructuring & Insolvency