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Hamilton-based steelmaker Stelco says it will proceed with hundreds of layoffs, despite threats of legal action from the federal government.
In a letter obtained by CBC News, Stelco Inc., which is owned by Ohio-based Cleveland-Cliffs, says it rejects allegations from Ottawa that it is violating binding employment commitments under the Investment Canada Act (ICA).
“Your representation that Stelco’s planned layoffs cause it to breach its undertakings is false,” says a letter written to Industry Minister Mélanie Joly by Paul Simon, president and general counsel at Stelco Inc.
Citing the ICA’s guidelines, Simon went on to write that “the undertakings do not stipulate a commitment to avoid layoffs, nor do they include a requirement that employment levels be above a certain amount on each day of the five years of the undertakings.”
The letter comes after Joly issued an ultimatum last week to the company: share a plan to save the up to 500 jobs that could be impacted at the Hamilton plant or face potential legal action.
In a statement to CBC News, Ron Wells, president of United Steelworkers Local 1005, said he was “not surprised with Stelco’s convoluted response.”
Stelco started laying off steelworkers at its Hamilton plant despite government demands that it reveal a jobs-saving plan within five days or face potential legal action.
The bigger problem is that the union, which represents the affected workers, was not privy to the agreement in the first place,” he said. “As the group with the most at risk, we weren’t consulted or [given] a chance to review the undertakings.”
Cleveland-Cliffs acquired Stelco in a $3.4-billion cash-and-stock deal that, according to a news release at the time, kept “national interests at the forefront” and recognized the “importance of the workforce.”
According to Joly’s letter, this includes “undertakings to continue to employ at least the same number of unionized employees and the vast majority of non-unionized employees as were employed when the transaction was announced.”
Joly said the company’s commitments “do not cease to apply simply because business strategy or market conditions have changed.”
Prime Minister Mark Carney also said last week that Ottawa will “use all powers that we have” against Cleveland-Cliffs as it pursues the Ohio-based company to the “fullest extent of the law.”
Prime Minister Mark Carney says Canada will ‘use all the powers that we have’ to ensure that Stelco meets its ‘legal obligations for employment.’ The company, which is owned by U.S.-based…
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