Is CHCH newsroom now operated by ‘related employer?’

Newsroom staff suddenly let go from their jobs at a Hamilton, Ont., television station may still be able to get severance from their former employer even though it declared bankruptcy.

In what is a Dickens’-like storyline, on Dec. 11, about 130 full-time and 40 part-time employees of CHCH TV were let go. Just two weeks before Christmas, Channel 11 LP announced it was declaring bankruptcy. It held the collective agreement with the newsroom employees and when bankruptcy occurs it triggers termination of contracts and the trustee takes over.

A subsidiary of parent company Channel Zero Inc., Channel 11 employed reporters and other staff who provided news content to the long-running TV station that serves Hamilton, Niagara, and Halton Region. All were unionized and included on-air personalities, camera operators, and others who were members of Unifor.

Almost as soon as the employees were let go, a private numbered company offered jobs to about 80 of the former news employees and the station resumed broadcasting. Many of those who were not asked back include long-time employees with many years of service — some close to retirement.

“The question is whether it’s a successor employer that has taken over the business,” says Danny Kastner, of Kastner Law. “They are required to respect all of the employment contracts of the former company — both the collective agreement as well as their statutory severance and termination obligations.”

On Dec. 15, the Toronto Star reported that an account manager for CHCH sent an e-mail to a prospective client indicating the restructuring would put an end to union representation at CHCH, freeing the station to bring on new talent. Kastner says that kind of “smoking gun” could serve to hurt the company further.

Kastner says under the governing labour legislation if even a tiny part of the reason for a termination or a company restructuring is anti-union animus that part will taint the entire decision and weigh into adjudicated deliberations as to whether there have been anti-union unfair labour pactices.

The union is also asking whether the company’s intention was to bust the union, but it is focused on the issue of whether the new entity is in fact a “successor employer.”

“The company has said publicly, and to us, that they in no way condoned or endorsed what that individual said, that it was an individual opinion,” says Liz Marzari, Unifor’s national representative assigned to the union employees from CHCH.

Marzari says Unifor is taking the position that the newly formed company is a successor employer and that the collective agreement applies in the new workplace.

“We continue to represent those members and we’re giving serious consideration to all of our legal avenues,” says Marzari.

The union met with the company Dec. 16 and will be meeting with it again in two weeks.

Last week, Channel Zero issued a statement saying that when the station was acquired in 2009, funding for local TV programming was available along with national advertising revenue, but that had changed dramatically.

CHCH is a federally regulated business governed by the Canada Labour Code. The union could also file an unfair labour practice complaint arguing the restructuring was motivated by the desire to rid itself of the union.

“We’re looking at a filing with the CIRB [Canada Industrial Relations Board] as well as any grievances that may apply,” says Marzari.

“I have never seen anything quite like this involving a broadcast business that has subcontracted out the news content portion of the business and only that portion of the business that has gone bankrupt. It certainly smells like a continuing employer,” says Tom McRae, of Shibley Righton LLP. “It’s going to be a colossal factor here.”

McRae says that issue of successor employee should be determined by the appropriate labour relations tribunal, given a Supreme Court of Canada decision in 2006 in GMAC Commercial Credit Corp. Canada v. TCT Logistics Inc. that indicated it is a tribunal that should determine whether an entity is a continuing employer not a bankruptcy judge.

The problem with looking at the new numbered company as a successor to Channel 11 LP is that a successorship involves a sale of assets from a business, says Dan Shields, of Shields O’Donnell MacKillop LLP.

“They might well say this new company didn’t take possession of any of those assets. It’s just a new company that hired people that is now providing services and whatever assets are required to be a news-gathering organization are still within the Channel 11 limited partnership because they are to be resolved on the bankruptcy,” says Shields.

Marzari says those employees who agreed to go work for the newly formed company did not sign new contracts, just a letter that stated they would return to work. She says the company acknowledged that in signing that the employees were not waiving their rights to any settlement or waiving any union rights.

“It would have been better for our members and the community if they had come to the union and had a frank discussion before they took this step of filing bankruptcy — that to a certain extent has tied everybody’s hands,” she says.

It may ultimately come down to an explanation for the actions and whether a court will believe the TV station did what it did for proper and reasonable purposes.

“If it walks like a duck, quacks like a duck, is yellow like a duck, it’s hard to say it’s a turkey,” says civil litigation specialist Jacqueline King of Shibley Righton LLP. “I think they’re going to have an uphill battle convincing a court if there’s not proper explanations for the actions, if there isn’t proper evidence.”

Update: This version of the story clarifies comments from Danny Kastner.