CHCH-TV bankruptcy leads to complaints, investigation

Unifor alleges more than $3.5 million owed to employees in Ontario

Channel 11 filed for bankruptcy on Dec. 11, 2015. As a result, its 190 employees at CHCH-TV in Hamilton, Ont., lost their jobs.

In the aftermath, Unifor — the union representing the CHCH employees — has filed several complaints against the employer with the Canada Industrial Relations Board.

Additionally, the federal government’s labour standards division has launched an investigation into the bankruptcy under the Canada Labour Code.

“We understand that an investigation such as this, in the case of a bankruptcy involving employees, is standard practice,” said Cal Millar, president and chief operating officer at Channel Zero, which indirectly owns Channel 11.

“We fully believe we are in full compliance with all federal labour standards, and trust that will be the ultimate determination.”

Channel Zero purchased CHCH-TV Hamilton from Canwest Global in 2009 for $11, said Millar. At the time, Canwest had concluded CHCH was no longer financially viable and projected it would lose nearly $30 million during the 2010 fiscal year.

At the time of this purchase, said Millar, CHCH was three times larger than the entirety of Channel Zero both in revenue and the number of employees. Because of this imbalance, Channel Zero chose to legally insulate itself from bankruptcy should CHCH fail. This insulation was achieved by holding the CRTC licence for CHCH-TV Hamilton in 2190015 Ontario Inc. (219), a wholly owned subsidiary in Holdco.

“CHCH-TV, with its higher-than-average local TV volume and presence, was by the fall of 2015 in dire straits,” said Millar. “Given these new financial difficulties facing CHCH-TV, including losses reaching $130,000 per week, 219 terminated its management agreement with Channel 11 L.P., forcing the latter to assign itself into bankruptcy.”

CHCH employees were compensated for all outstanding wages and vacation pay, said Millar. Additionally, many employees received additional payments through the Wage Earner Protection Program (WEPP).

Unifor, however, argued millions of dollars were still owed to employees.

“Our members, we’ve calculated, are owed — in terms of severance and notice — somewhere in the area of $3.5 million,” said Liz Marzari, national representative for Unifor.

“We’re hoping that the rulings of the labour board — if we’re successful with our applications — would be successful in securing some of those funds of all of those funds for our members.”

The union has filed a successor employer application and a related employer application with the Canada Industrial Relations Board. Unifor has also filed complaints against the employer for bad faith bargaining and unfair labour practices.
One of the union’s biggest issues with the handling of the bankruptcy is the way a new group of companies was created to do the same work previously performed by Channel 11, said Marzari.

About 70 workers were rehired to provide news services and CHCH resumed broadcasting, with fewer weekly local programming hours.

“They were rehired out of seniority, which is obviously an issue for us," she said. "We would have hoped to have seen members rehired by the companies by seniority and that didn’t happen so there may be some compensation that’s required there.”

The union is also awaiting the results of the government’s investigation.

“The investigation certainly wasn’t initiated by us,” said Marzari. “We welcome, though, anything that shines light on the situation at Channel 11, at CHCH. It was unprecedented, the action the company took. I’ve never seen anything like that and I think that the way they went about it and the treatment that employees received was obviously, in our opinion, not right. It was not the right way to treat people who had been loyal to you and who bargained with you in good faith for their wages and benefits and severance.”

If, at the conclusion of the government’s investigation, the inspector issues a written payment order to the employer, it is possible the directors of the company could be held individually responsible.

“I would hope that it would set a precedent,” said Marzari of individuals being held responsible for the money owed to CHCH employees. “I’m hopeful that it would give employers pause to consider their actions before taking a similar route.”

While the union hopes for precedent-setting results, the investigation itself is fairly routine, according to Julia Sullivan, chief of media relations for Employment and Social Development Canada.

“It is standard procedure for the Labour Program to initiate an investigation when there is a bankruptcy,” said Sullivan. “Labour standards officers also conduct proactive workplace inspections and investigate complaints of labour standards violations to ensure employers and employees comply with the Canada Labour Code.”

During an investigation, an inspector will contact the parties and gather facts to make a determination on whether a violation of labour standards occurred. If either of the parties disagrees with the inspector’s findings, they will have an opportunity to provide more information. Any new submissions would be reviewed before the inspector submitted a final determination.

If the complainant receives a Notice of Unfounded Complaint or the employer receives a Payment Order, they could request a review of the inspector’s determination. Upon completion of the review the inspector’s decision may be confirmed, varied or overturned.

If a violation of the Labour Code is found, the employer would be encouraged to voluntarily comply with requirements, said Sullivan.

“Our goal is to ensure workers are protected and that their rights are protected,” she said.

“The code provides a legislated process for the collection of unpaid wages and other benefits to which an employee is entitled… This includes informing the directors of their potential liability, should wages and other amounts under the code remain owing after details related to the bankruptcy are resolved.”

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