MONTREAL - Fa Lim says the sudden closure last week of call centre operator IQT Solutions brought back painful memories from 2008, when he and 2,400 Ontario auto parts workers began a painful journey of lost fortunes, attempted suicides and chronic unemployment.
"It was devastating,"said the 38-year-old former Progressive Moulded Products employee. "As I got the news it was a flashback for me to about three years ago."
Encouraged to take vacations, Progressive Moulded employees returned on Canada Day in 2008 to locked doors at 11 work sites that had been stripped of equipment. The auto parts company was a victim of the painful restructuring that cost thousands of jobs in the North American auto industry during the recent recession.
Promised just the wages owed, the Progressive Moulded workers began a unsuccessful fight to recover more than $30 million in severance, vacation pay and benefits.
Their efforts, which included protests and government lobbying, may end up helping about 1,200 IQT employees who suddenly lost their jobs a week ago in Ontario and Quebec when the company went bankrupt.
About 600 workers were laid off at offices in Oshawa, Ont., as well as 450 in Laval and 140 in Trois-Rivieres, Que., in a move that laid-off employees described as "savage."
During the Progressive collapse, employees of the auto parts maker were unable to benefit from the creation of the federal Wage Earner Protection Program. The plan, known as WEPP, provides employees of bankrupt companies up to $3,400 in compensation for severance and other money not paid.
"I didn't believe that after three years this still can happen to people," Lim said in an interview from Vaughan, a community just north of Toronto.
"The federal law doesn't change anything. It doesn't protect the workers."
Hired as co-ordinator of a labour-sponsored action centre, Lim has watched as former laid-off co-workers endured marital breakups, health problems, attempted suicides and employment struggles.
Only about 700 workers have found permanent jobs while many of the largely immigrant workers have been forced to juggle two or three part-time jobs, he said.
While most companies follow employment standards rules when shutting operations, thousands of Canadian employees have struggled to secure what they're entitled to under Canadian labour laws after their employers suddenly stop operating.
More than 80 workers lost their jobs in March. 2009 when Aradco closed two parts plants in Windsor, a border community in southwestern Ontario hit hard by the restructuring of the auto industry.
An auction of the plant's assets and an earlier settlement generated $625,000, roughly one-quarter of the $2.4 million the union initially said its members were owed.
About 100 former Sklar-Peppler workers in Ajax, Ont., lost severance pay during the furniture maker's 2008 bankruptcy proceedings.
Workers at M&I Air Systems occupied the Mississauga, Ont., plant days after the industrial company closed its doors in late 2009 and refused to pay outstanding money owed to employees.
Jules Carriere, associate professor human resources management at the University of Ottawa's Telfer School of Management says the IQT Solutions situation was "a flagrant violation of Canada's labour laws" by a U.S. company.
"I don't think this is very common in Canada," he said in an interview. "You hear this stuff happening in Third World countries."
Laurell Ritchie, national representative of the Canadian Auto Workers union, said sudden plant closures accelerated at the height of the recession between 2008 and 2010.
"It does happen periodically at any given time. It could become a growing problem but I don't think we've seen the evidence in the last year on that," she said in an interview.
Ritchie said the IQT case has outraged people because it has exposed the inability of government to control this kind of corporate behaviour.
She said part of the solution could be in changing laws. The bankruptcy law, for example, gives a preferential status just to wages owing, but not to severance pay or other forms of payment at termination.
"So that means that workers go to the back of the bus if there is a bankruptcy proceeding or a receivership."
Altering bankruptcy laws is just one of the ideas being pushed. Organized labour and Ontario's Labour minister have also urged Ottawa expand the scope of WEPP beyond just companies that declare bankruptcy or are in receivership.
"More and more often, we hear of companies refusing to go through the proper channels of declaring bankruptcy, leaving workers with no financial support," Charles Sousa wrote in a letter to his federal counterpart, Lisa Raitt.
He also suggested increasing the $3,400 cap and making the program retroactive to July 7, 2008 to capture workers caught in the recent economic downturn.
Raitt's office couldn't be immediately reached for comment.
The employment prospects for many IQT employees may be brighter than those who faced similar situations. Quebec Labour Minister Julie Boulet says three companies have expressed an interest in hiring the call-centre workers.
The cause of these workers is also helped by the intense media coverage. But what about those facing a similar situation in a small shop with just a few employees, says Sylvain Schetagne, senior economist of the Canadian Labour Congress.
"No one is lucky to lose their job but the fact that there's media coverage will expedite hopefully the process in order to get at least some short-term support."
