Steelworkers greet Supreme Court of Canada ruling: courts can't rule on successor rights in bankruptcies

29 July 2006

Steelworkers National Director Ken Neumann says that a Supreme Court of Canada (SCC) Decision over union successor rights in the case of bankruptcies, released on Thursday, constitutes an important victory for trade unions in Canada.

The decision, released yesterday, (GMAC Commercial Credit Corporation - Canada v. T.C.T. Logistics Inc, 2006 SCC 35) stops courts appointing interim receivers from declaring that those receivers (in this specific case, KPMG) are not successor employers under labour relations legislation. The Court also said orders appointing interim receivers may not immunize them from liability as a successor employer.

Neumann says the case should also help unions obtain leave to bring legal proceedings before labour relations boards across Canada, when employers become insolvent.

The legal victory concludes a case launched by the former I.W.A. Canada Local 700 (now part of United Steelworkers Local 1-500) several years ago after T.C.T. became insolvent. Its largest creditor, GMAC Commercial Credit Corporation, applied to an Ontario court to have KPMG appointed as an interim receiver. The Order obtained from the Court gave the interim receiver the power to hire and fire employees. It also declared that KPMG could not be found to be a successor employer within the meaning of the Ontario Labour Relations Act.

KPMG eventually became the trustee when TCT was assigned into bankruptcy and went on to terminate workers. Most of TCT's assets were subsequently purchased by Spectrum Supply Chains Solutions Inc., which then hired some former TCT employees, but not in accordance with the collective agreement that existed with the union.

"The Supreme Court has clearly confirmed that labour relations boards should determine questions on successor rights and not the courts," adds Neumann.

Former IWA Local 1-700 president Ron Diotte, today a business agent with USW Local 1-700, says the union will be seeking the reinstatement of collective bargaining rights and union members, with compensation for lost wages and other costs.

"This has been a long battle for justice and we congratulate our membership for winning a battle which can benefit union members in other parts of Canada," says Diotte.

The United Steelworkers represents 288,000 men and women working in every sector of Canada's economy.

For further information: Ken Neumann, (416) 487-1571 or (416) 558-2810

Source: newswire

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