Trent Ernst, Editor
On January 5, Justice Fitzpatrick granted Walter a 90 day extension to their Companies’ Creditors Arrangement Act (CCAA) decision granted on December 7.
This means the company has until April 5 of court protection from its creditors.
This is bad news for the United Steelworkers, who currently have a pair of grievances before the Labour Board.
The Steelworkers appeared before the court to ask if they could move forward with their case, but got rejected.
According to the testimony of Randy Gatzka, a Steelworkers Representative, “Wolverine submitted calculations to the Board which set the minimum amount of damages payable to be $771,378.70, based on employees who had provided mitigation information, but excluded approximately $1.3 million in wages for employees who had not provided mitigation information yet.”
Gatzka says the Steelworkers have been having a hard time tracking down former union members. “Because many employees left the Tumbler Ridge area, this information is taking a considerable amount of time to collect,” he says. As of July 2015, the Steelworkers had not heard from over 100 employees.
The BC Labour Relations board ordered Walter to pay that $771,378.70 to the Steelworkers in trust, pending final disposition of the matter. The amount is presently being held in Trust by Victory Square Law Office, says Gatzka.
Walter sought reconsideration, which was dismissed, then sought reconsideration again on November 24. That reconsideration has not been heard, as the CCAA order came down before the Labour Relations Board could hear the matter.
Gatzka is worried if they are unable to bring the matter before the Labour Relations Board, the Steelworkers will only be able to collect the $771,378.70 that they have already collected from Walter. “If the stay in this matter remains in effect, the parties are unable to remit matters back to the Labour Relations Board to settle outstanding issues relating to quantification of damages,” he says, and it’s only going to become harder as time goes on. “In my experience as a Union representative, if the Mine does not reopen by April 2016 and employees’ recall rights expire, many will leave the Tumbler Ridge area to work elsewhere. I believe that it will continue to be increasingly difficult to contract employees to determine the Adjustment Plan damages if the Mine closes and the Adjustment Plan JR continues to be stayed and is not heard for many months.”
Walter initially estimated the total amount owing to be in the range of $4 million, but downgraded that to $771,378.70.
This estimate excludes affected employees falling into three categories. Employees who were inactive during the notice period, such as those on short or long-term disability, workers’ compensation benefits, maternity leave or sick leave. Second, it excludes employees who worked for the Employer during the mitigation period. Finally, it excludes those who refused recall or were otherwise unavailable to work during the mitigation period.
From affected employees remaining on the list, the Employer’s estimate is based on total wages owing, minus the amount of actual mitigation income identified by the Union and minus $1.3 million being the total amount of damages owing for the 112 employees who have not yet responded to the Union’s request for mitigation information.
The Union disagrees with this estimate as well as with the underlying assumptions it makes. Their figure is $1.96 million, subject to a possible gross-up for premiums and other benefits, but, says Gatzka, until the grievance over the Northern Allowance amount owing is settled, “the liability of [Walter] to employees remains uncertain.”
Walter plans to use the 90 days to restructure and sell off the mines. But because the Union is an “unsecured creditor”, says a Union Rep, even if they win their Labour Relations Board case, what the company owes employees will only be disbursed after all the secured creditors (banks, etc.) get paid out. The rep is not holding his breath that there will be much, if any, left over.
Walter has engaged William E. Aziz of BlueTree Advisors Inc. as an independent contractor as Chief Restructuring Officer of Walter Canada.
His job will be to consult with the stakeholders of Walter Canada to develop and implement a restructuring of the business and operations of Walter Canada and to advise on any sales of Walter Canada’s business and/or assets.