EDMONTON-In an important and strongly-worded decision released yesterday, the Alberta Court of Appeal overturned a controversial Labour Relations Board (LRB) decision which allowed Finning International in 2005 to rid itself of a union collective agreement by establishing a new company for part of its operations. At the time the decision was considered by many to fly in the face of available evidence. (Please backgrounder below on issue, including a timeline.)
"This is an important decision by the three Justices of the Court of Appeal," says AFL President Gil McGowan. "It reverses a terrible decision by the Alberta Labour Relations Board (LRB). Finning had created a new blueprint for union busting, and the LRB was letting them get away with it. Thankfully the Court of Appeal saw through it and has stopped it."
The unanimous decision pertains to a dispute in 2005, in which Finning International created a new entity, OEM Remanufacturing, to take over Finning's component rebuilding operations. In the transfer OEM evaded the existing contract with the International Association of Machinists (IAM) and instead signed a contract with the Christian Labour Association of Canada (CLAC).
An original LRB decision ruled OEM was a successor to Finning and that the two companies were, in fact, a common employer. Normally this would have meant that IAM would have maintained its status as official bargaining agent and the workers would have been protected by the existing IAM collective agreement with Finning.
Two months later, adopting a highly unusual procedure, the Labour Relations Board reconsidered the decision at the request of the employer. In that reconsideration, a five-person "superpanel" consisting of the LRB Chair Mark Asbell, two Vice-Chairs and two Board members overturned the original ruling. IAM then appealed to the courts.
"It was a thinly-veiled attempt to bust our union, and we were determined to fight it," says IAM Lodge 99 President Bob MacKinnon. "This is an important day for us, the Machinists, and for all unionized workers. It is also a great day for the democratic process: the Court has recognized that where workers have voted to be represented by a union, that decision must be respected by employers in Alberta."
In its decision, the Appeal Court criticized the LRB superpanel for substituting its opinion for the factual findings of the original panel. The Appeal Court also found that the panel had deviated from well-established successorship principles clearly evident in the Boards own previous rulings and in court decisions. It ruled the decision was "patently unreasonable" and ordered the original decision re-instated. "Patently unreasonable" is a legal term indicating that the decision was "clearly irrational" or "bordering on the absurd."
"Quite frankly, the LRB messed up on this," says McGowan. "It speaks to ongoing problems at the LRB and will deepen the growing mistrust unions have with the Board's lack of visible objectivity. It is gratifying that the Court of Appeals recognized the superpanel's rush-to-judgment for what it was."
The decision leaves the IAM free to pursue its attempt to ensure that the successorship decision leads to full remedies for its wronged members.
"It is a shame that workers need to rely on judges to uphold our democratic rights," notes McGowan. "That is supposed to be the job of the Labour Relations Board."
For more information call:
Gil McGowan, AFL President @ 780.218-9888 (cell)
Bob McKinnon, AIM Lodge 99 President @ 780.218-9888 (cell)
High Court Overturns Labour Board Decision
Blueprint for Union Busting Now Off the Table: The Significance of the Decision
- It is rare for LRB decisions to be overturned by the courts. The bar for doing so is very high.
- The case was a controversial one. It related to a new technique for union busting, and included the involvement of CLAC, a bargaining agent mistrusted by mainstream unions.
- The decision by the Appeal Court raises serious questions about the process used by the Reconsideration Panel.
- Unions have been growing increasingly frustrated at the LRB for its lack of transparent objectivity.
- The Alberta Court of Appeal does not have a reputation for progressive decisions.
Timeline of Finning/OEM Case
April 7, 2005
June 7, 2005
April 25, 2006
Oct. 17, 2007
Why are Finning & OEM "Common Employers"
- OEM did not demonstrate sufficient legal and operational independence from Finning International.
- Finning Canada, a wholly-owned division of Finning International, paid the total costs (approximately $87 million) for the construction of the new OEM plant
- Finning Canada financed all of the money for the creation of OEM through the purchase of two existing independent firms
- Finning International controls 100% of the Class A (controlling) shares in OEM's parent company
- All CRC work was subsequently transferred to OEM
EDMONTON - In a key decision released today, the Alberta Labour Relations Board has, once again, proven itself little more than a lapdog for big business, says Gil McGowan, the new president of the Alberta Federation of Labour.
"The Board today reversed its earlier decision that found Finning Canada and O.E.M. Remanufacturing were common employers and that the International Association of Machinists (IAM) Lodge No. 99 had successor union rights to the operations of O.E.M.," said McGowan.
"If this results stands, 160 long-term Finning employees are going to be out of work - and their families are going to suffer the consequences."
According to McGowan, the situation began when Finning built a new remanufacturing plant in Edmonton, but thinly disguised its complete ownership of that plant in order to avoid its responsibilities to its current union and current employees.
"By reversing its original decision that the two employers were in fact the same entity, the Board has legitimized Finning's actions which include signing a deal with a different employee group at the new plant, and laying-off and replacing the employees in their current rebuilding facility," said McGowan.
The Board could only reach its current position by pretending that Finning International and Finning Canada - a wholly-owned subdivision of Finning International � were two different entities, claimed McGowan.
"The Alberta Labour Relations Board has once again jumped through hoops in order to get to an employer-friendly decision," charged McGowan. "This is a good example of why working people and unions have no faith or trust in the Board any longer. To say that Finning International and Finning Canada are separate entities flies in the face of past precedents and run counter to common sense."
The real relationship between Finning and OEM was recognized by the LRB in its original ruling and can be summarized as follows:
- Finning Canada, a division of Finning International, pays the total costs for the construction of the new O.E.M. component rebuilding centre.
- Finning provides all of the money for the creation of O.E.M. - financing the purchase of two existing independent firms.
- Finning International controls all of the Class A shares in the parent company for O.E.M.
- Finning contracts all of its rebuilding work to O.E.M., announces it will be shutting down its own facility and dismissing the workers.
- The "new" company signs a union contract with the Christian Labour Association of Canada (CLAC) leaving IAM Lodge 99 and its members out in the cold.
"The Alberta Labour Relations Code section 46 was clearly written to prevent employers from evading their union responsibilities and the rights of workers by simply starting up a new company," concluded McGowan.
"But now the Alberta Labour Relations Board charged with enforcing the Act is actually undermining the intent of that Act. This is a betrayal of working people, plain and simple. If there ever was any doubt where the LRB's real allegiance lies, those doubts have been put to rest. With this decision, the LRB has proven that they are not really an impartial referee in matters of labour relations."
For more information contact:
Gil McGowan, AFL President at 915-4599 (cell)
Kerry Barrett, President of the Alberta Federation of Labour, March 2005
We're here today because you're company - that company right there - is turning its back on you.
Some of you have already been laid off. Others have an axe hanging over your heads.
But, in either case, something important is being lost here.
What's being lost are not just thrown-way jobs. We're not talking about McJobs.
These are family-sustaining jobs.
These are jobs that put money into your pockets, but also put money into the broader Edmonton economy.
These are the kind of jobs that form the backbone communities like Edmonton.
And why are your jobs being cut?
Why are you - in some cases, after being with the company for more than 20 or 25 years - why are you now being discarded like post-it notes?
Is it because customers no longer want your services?
Is it because the economy has gone south?
Is it because your company is losing money?
As we all know, none of those things are the case.
Just this morning, I opened the paper, and in the business section there was an article saying that Finning racked up a profit of $20 million in the last quarter.
That's $20 million in just the last three months.
This is not a company that's struggling. This is not a company that can't afford to do well by its employees.
Instead, what we have here is a company that has made a conscious decision to turn its back on it own long-time workforce.
For the sake of squeezing out of few more cents of profit per share, they're leaving you out on the curb.
As you know, your work isn't being eliminated. And it's not being shipped overseas. It's staying right here in the Edmonton region.
Basically, they're closing you down and opening up across the street.
The big question is why. Is it really about efficiency, as the company says? Or is this really about breaking your union?
From our perspective, what's going on here is indefensible.
And you know what is just as big a crime?
The labour laws here in Alberta are so weak that Finning just might be able to get away with it.
That's why the AFL is here today.
We're here to help you shine a public spotlight on the bad corporate citizenship being shown by Finning.
And we're here to show that the Alberta government - by paving the way for this kind of thing - is actually an accomplice.
In conclusion, what I want all of you to know is that the AFL and the rest of the labour movement are behind you in this fight.
We all have a stake - because if Finning is able to get away with this kind of union-busting - then no working people in this province are safe.
That's why we're here for you today and that's why we'll continue being with you as you continue your fight.
Good luck and thank you.