Business

Kicked out and kicking back

Anthony Whittingham August 25 1980
Business

Kicked out and kicking back

Anthony Whittingham August 25 1980

Kicked out and kicking back

Business

Anthony Whittingham

The mood is angry. The style tight and direct. In this in-house account of a plant shutdown earlier this year, which saw 180 of its members laid off work indefinitely, the United Auto Workers—Canada’s second-largest industrial union—were already sowing the seed for what finally erupted last week into a full-scale confrontation. The 200 UAW members who seized and occupied the premises of Houdaille In-

dustries of Canada Ltd., a small U.S.owned auto-parts manufacturer based in Oshawa, Ont., were battling what for them has become the grimmest spectre of all: plant shutdowns and the ensuing struggle to establish workers’ rights when the former employer folds up his tent and disappears.

It has been a difficult year for pockets of workers throughout the country: recession, high interest rates, prairie drought, resource shortages and labor disputes have all taken their toll. Overall unemployment across Canada stood at 860,000 last month, or 7.6 per cent of the work force—with forestry and fishery workers in British Columbia, farm implement retailers in the Prairies, auto workers in Ontario, fishermen in Newfoundland and construction tradesmen throughout the country the hardest hit.

But it is in the industrial heartland of Ontario, where manufacturing jobs have been disappearing, in some cases permanently, that the greatest frustration is being felt, erupting during August in a series of accusations by angered union members. Their charge:

that foreign-owned firms have been callous in closing down branch-plant subsidiaries and irresponsible in their treatment of former employees, while government authorities, they claim, are spineless or impotent in allowing it all to happen. “It’s not tb it Canadian legislation protecting workers and communities from the worst effects of plant closures is poor,” charges a UAW document lamenting nearly 5,000 lost jobs in 13 Ontario plant closures so far in 1980, “it’s nonexistent.” UAW Canadian Director Robert White backed up this complaint last week in a series of demands to Ontario Premier William Davis calling for tighter restrictions and job guarantees from foreign-owned

Within minutes of punching in that February morning, employees at Sealed Power in Stratford, Ont, knew something was wrong. The mood spread quickly throughout the plant. Rumors flourished. At 3 in the afternoon, the foreman flashed the word that everyone was to assemble in the plant cafeteria. As workers left their machines, lights were shut off behind them—a signal that the shift due to punch in at 3:30 would not be working that day. In fact, nobody would be working at Sealed Power that day or any other. The company announcement was nasty, brutish and short: “This plant will be closed until further notice effective today. ”

corporations operating in the province, twinned with measures curtailing foreign imports.

Response from Ontario officials has been equally blunt. “This province,” retorts Industry and Tourism Minister Larry Grossman, “has the most extensive labor protection legislation anywhere in North America. We can’t prevent any company from going out of business or consolidating its operations elsewhere—that would be preposterous—but we can, and do, make sure that the steps they take in doing so ensure the maximum possible fairness to employees affected.” Grossman says

Ontario’s Employment Standards Act requires companies with 50 or more employees to give two months’ notice of a layoff or shutdown (or pay in lieu) and four months’ notice if more than 500 employees are involved. Other provinces have similar employment standards legislation requiring proper notice.

Much of the angry mood in Ontario can be attributed to the cumulative impact of the relatively large number of shutdowns during the past year (about 50 across the province since last summer)—most, though not all, related to the sickly automobile industry. But much of the resentment has been focused on specific moves that unions have, quite justifiably, found highhanded. Bendix Automotive of Canada Ltd. in Windsor, for example, subsidiary of a U.S. parent, gave no notice

whatsoever of its 500-employee shutdown in June, causing a furore in the community even though the company provided full severance benefits for 12 weeks in lieu. Houdaille Industries in Oshawa is being reviled not for its unwillingness to live up to statutory severance benefits but for refusing, so far, to make special exceptions in the case of a handful of employees tantalizingly close, though not legally entitled, to pension and other benefits. “In actual fact,” says James Moore of the Windsor-Essex County Development Commission, “when you examine the conduct of companies involved in layoffs or shutdowns in this area, the deals negotiated with the unions have been in excess of Ontario regulations. They’ve been more than fair.” The real key, however, says John Kervin of the University of Toronto’s Centre for Industrial Relations, is the appearance of fairness. “As expectations have risen, it’s up to companies to go that extra mile of their own accord, particularly in the area of benefits. Otherwise, black eyes like the Houdaille affair will force the government to step in with rigid

laws, which may not be desirable in the long run.”

Many union officials believe government standards are inadequate to guarantee job security and should be increased—pointing especially to parallel legislation in many European countries, which, in some cases, makes it nearly impossible for private industry to lay workers off under any circumstances.

Italy’s giant Fiat automobile company, for example, is currently battling government regulations that virtually prevent downtime, even though the worldwide auto slump is causing the company to lose money. “That’s a bit extreme,” says Grossman. “Of course we want job security, but if we reach that kind of labor impasse in this country, our economy will grind to a halt.” A more attractive foreign model might be the British division of Toronto’s Massey-Ferguson Ltd., which set up a special subsidiary to find employment for the 1,000 workers who lost their jobs when its Kilmarnock plant in Scotland closed down permanently last winter. For the really imaginative, some smaller shutdowns have been countered by groups of employees buying the firm themselves (see box page 32).

Across the country, government labor officials express concern about layoffs and shutdowns. While they admit there’s little they can do to prevent them, they also feel companies have an obligation to treat former employees fairly—or stronger legislative standards may be necessary.O