Walter files for reconsideration

Trent Ernst, Editor


For the second time, Walter Energy has filed for reconsideration in its ongoing battle with the United Steelworkers.

The steelworkers took the mining company, doing business as Wolverine Coal Partnership, before the Labour Relations Board (LRB), saying the mine failed to provide 60 days’ notice of layoff.

In its submission to the Labour Relations Board (LRB), the Union says “the usual remedy for a breach under section 54 is pay in lieu of notice. These damage awards are compensatory, not punitive. They are intended to put employees in the position they would have been, but for the breach. The fact that some meetings took place after the layoff does not relieve the Employer of its notice obligations.”

On July 24 of last year, the LRB found in favour of the Steelworkers. However, Walter filed for reconsideration at the time. The case was delayed until May, when the LRB once again found in favour of the Steelworkers, saying that Walter violated its duty to give notice to, and consult with, the Union when it idled the Mine and implemented the Indefinite Layoff.

Again, the LRB ruled that Walter was required to pay damages equivalent to 60 days’ pay for each of the affected employees, subject to mitigation.

And again, Walter has challenged this decision.

According to a submission by legal Counsel for Wolverine Coal Partnership, the reasons the company is asking for reconsideration is because “the Original Panel made palpable and overriding errors in concluding: 1) that the experts were forecasting a decline in Candian coal production in 2014, 2) that layoffs in 2014 were likely and predictable based on market forecasts; and 3) that price levels in the fall of 2013 were ‘unsustainable’ for the Employer and caused ‘alarm’ as to the ‘viability of the Wolverine mine.”

In addition, Counsel argues that the decision is inconsistent with the principles expressed or implied in the code “because the original panel: 1) concluded that the layoff was indefinite, not temporary based on irrelevant factors not tied to the true nature of the layoff and by giving no consideration to the fact that the Union did not call one of its Officers to testify about the contents of an important conversation between the Employer and Union; 2) expanded the application of section 54 to include circumstances where an employer is “likely” to implement a change, or where a change ‘may be’ necessary when the section on its face only applies if ‘an employer introduces or intends to introduce’ a change; 3) expanded the application of section 54 to require employers to give ‘notice’ of future events outside the employer’s control; and 4) adopted an interpretation of section 54 notice that is inconsistent with labour relations expectations and which leads to uncertainty.”

For Walter, this application for reconsideration means that it will not have to pay million to union members in lieu of 60 days’ notice. At least, not yet.

Currently, the overburden has been removed from seam 4A, which means that the cost of production when the mine restarts will be markedly lower for a period of between six to 12 months, according to the LRB documents. As well, there are still some stockpiles out at the mine, which the company has not sold, as they are waiting for an improvement in the price of coal.

According to testimony provided by Anthony Meyers, vice-president of Canadian Operations, the company is planning on recalling all the Steelworker employees to the mine before the 24 month recall period is up, either “once a more sustainable coal price is reached,” or “before expiry of the 24 month recall period,” to complete the mining of Phase 4A. This would allow the company to avoid paying approximately $11.6-million in severances and effectively re-setting the clock, thereby giving the company an extra 24 months before either restarting the mine or shutting down if coal prices do not improve and improving the company’s chances of developing other seams, such as 4b or EB. “If we did not intend to resume,” wrote the company in a circular at the time of the layoffs, “we would finish mining 4a now.”

On April 15, 2014, Walter announced an immediate shutdown of the mine, giving no advance notice to the Union or employees.

Some Steelworker members remained at the mine to exercise the equipment, as well as members of the mine rescue crew, as required under the Mines Act. However, in January of this year, the equipment cylinders were wrapped, laying off the remainder of the Steelworkers on-site.

According to the LRB’s decision, the mine had been operating “in the red” for nine months (from Q3 2013) before the decision was made. In Q3 of 2013, contracts were being signed in the US$140/tonne range.

This, argues the company in their application for reconsideration, was not the case: “There was no evidence whatsoever that the Wolverine Mine was among these high cost producers (that would be ‘in the red’ at prices forecast for 2014)” submits the mine’s legal counsel, Roper Greyell LLP. “In fact, the evidence was that the Mine continued to operate, and was not ‘in the red’, when prices decreased to US$140 in Q3 2013. The Original Panel correctly noted that “the US$120 price was what ‘put [the Mine) in the red”’. In other words, up until that time, when prices were US$140, US$150, and US$143 from Q3 2013 through Q1 2014, the Employer was not ‘in the red’. In other words, while the US$140-150 prices were unsustainable on a global basis in terms of the supply and demand economic analysis, the Wolverine Mine was still cash positive (i.e., bringing in revenue in excess of the variable cost of mining the coal).”

According to the LRB, a party is only allowed one application for resubmission on a case. However, a portion of the original decision by Richard Longpre was overturned during the reconsideration, which gives Walter the option of asking for a reconsideration in this decision, too. Reconsiderations can take up to six months to happen, though the timeline is typically much shorter.

Assuming that this current decision is not overturned during this reconsideration and the decision is upheld, Walter will have exhausted its avenues of approach with the LRB. They are able to take it to the Supreme Court of BC for judicial review (and indeed, they filed an application in February, though dates on that have not been set.) If the decision is again upheld, they are able to take it before the BC Court of Appeal, then to the Supreme Court of Canada.

Ultimately it means that members of the Steelworkers Union that were working at the mine are left in a state of uncertainty as the legal wrangling draws on.