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Supreme Court Of Canada Opens The Door To Labour Relations Proceedings Against Insolvency Administrators.

Article Excerpt
A decision by a majority of the Supreme Court of Canada rendered late last week may have the effect of declaring "open season" on proceedings seeking to have insolvency administrators declared successor employers under applicable labour legislation.

Facts

In GMAC Commercial Credit Corporation - Canada v. T.C.T. Logistics Inc., the narrow relief initially sought by a union before the Ontario Labour Relations Board (OLRB) against an interim receiver selling a business was a declaration that the interim receiver conducted unfair labour practices by colluding with a purchaser to operate the business at a non-unionized location so that the unionized location could be shut down. Granting the declaration could have exposed the interim receiver to personal liability for all of the obligations under the collective agreements of the bankrupt employer.

The interim receiver defended the OLRB proceedings, in part, by claiming they were stayed until leave was sought and obtained pursuant to s. 215 of the Bankruptcy and Insolvency Act (BIA) from the bankruptcy court having appointed the interim receiver. A leave application...

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