Chrysler’s President, Tom LaSorda threatened to pull the company out of Canada and, presumably, dismiss its Canadian workforce, unless the Canadian Auto Workers agrees to open its collective agreement–which, by the way, Chrysler negotiated–and cut labour costs by 25%. Here’s the video of his speech to the House of Commons committee. By the way, LaSorda was paid nearly $20 million dollars in 2007 alone (but I’m sure his compensation has nothing to do with Chrysler’s problems — that was sarcasm, in case that isn’t clear).
Can an employer use the threat of a workplace closure and mass dismissal as a bargaining tool during the term of a collective agreement? On its face, LaSorda’s threat to pull out of Canada unless the CAW gives him what he wants seems like a clear violation of any number of sections of the Labour Relations Act.
For example, if the threatened closure would take place during the term of the current collective agreement, then hasn’t Chrysler just threatened an unlawful lockout contrary to section 79(6) (check out the definition of a ‘lockout’ and consider whether Chrysler would be engaging in one if it closed a factory when the CAW refuses the pay cuts)? A threat to close a factory unless a union reopens an agreement and agrees to compensation cuts would also, on its face, appear to violate Section 70, 72, and 76, all of which prohibit employers from threatening employees to pressure them to surrender their legal rights (like collective agreement rights).
I’m not suggesting that the CAW would file such a complaint, since it is not immediately clear what value the workers would get from such a complaint. But Chrysler’s comments do raise interesting legal issues. For example, do you think that these sections should not apply when the employer claims it is in dire economic circumstances? Should the phrase often heard in the movies–“that’s not a threat, it’s a promise”–have legal meaning in this context?