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13 April 2009

Alison Narod Appears in the National Post

Farris Partner, Alison Narod appeared in the April 11th National Post newspaper in an article titled, Difference in Canadian law compared with US - Can’t bust unions through bankruptcy by Julius Melnitzer. As Barack Obama, the U.S. President, eyes a “quick and surgical” bankruptcy solution for ailing automakers, don’t expect the wound in Canada to be as clean or neat should car companies here seek creditor protection under the Companies’ Creditors Arrangement Act (CCAA). That’s because of a difference in Canadian labour and insolvency law. In the United States, insolvencies can be used to end high-cost union contracts if certain procedures are followed. In Canada, however, such contracts survive insolvency and extend to successor employers who emerge from the ashes of a defunct company.

A union collective bargaining agreement can also apply to an unsuspecting company that simply buys equipment, even if it’s moved to a different location and possibly even if it’s used for different purposes. In the article, Farris Partner Alison Narod speaks about the collective bargaining agreement saying it’s “always an issue because of the effect it has on costs of running the business and any restrictions there may be on running the business. Typically, parties have to address that in cutting their deal.” She went on to say, “Some unions are practical and will be more concerned about preserving jobs if they are convinced that the employer is in a tight financial spot.” Download the PDF file here.

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