Karen Ensslen

In CCAA proceedings involving a major Canadian retailer in insolvency, Employee Representative Counsel brought a motion to approve a Hardship Programs Term Sheet providing three programs to alleviate hardships for vulnerable non-unionized former employees: a Trust Program extending and settling long-term disability benefits for approximately 157 former employees funded through a pre-existing trust, a Woodwards Replacement Policy funded through a company reserve fund, and an Employee Hardship Program funded by $250,000 in foregone secured lender payments.

The court approved the Term Sheet as fair, reasonable, beneficial to stakeholders, and consistent with the purpose and spirit of the CCAA.

Ancillary relief including releases, declaratory relief characterizing Employee Hardship Fund payments as non-earnings for EI purposes, and a sealing order protecting personal information of LTD recipients and trustees were also granted.

An unsupported objection by one individual was dismissed as lacking credible basis.

The Court of Appeal for Ontario dismissed the appeal of the Amalgamated Transit Union, Local 1587, upholding the Divisional Court’s decision to quash an arbitration award that reinstated five employees dismissed by Metrolinx for sexual harassment.

The Court found that the arbitrator made legal and factual errors, including failing to recognize Metrolinx’s statutory duty to investigate workplace harassment even in the absence of a formal complaint, and improperly relying on myths and stereotypes about victim behaviour.

The matter was remitted to a new arbitrator for reconsideration.

The Ontario government appealed a decision finding that the Protecting a Sustainable Public Sector for Future Generations Act, 2019 (Bill 124), which imposed a 1% cap on compensation increases for broader public sector employees, violated the right to freedom of association under s. 2(d) of the Charter.

The Court of Appeal upheld the application judge's finding that the Act substantially interfered with the respondents' collective bargaining rights and was not saved by s. 1 of the Charter, as it was not minimally impairing and its deleterious effects outweighed its salutary effects.

However, the Court allowed the appeal in part to limit the declaration of invalidity to represented employees, as non-represented employees do not benefit from the same collective bargaining protections.

The Applicants, Nordstrom Canada Retail, Inc. and related entities, sought an Amended and Restated Initial Order (AIRO) under the Companies’ Creditors Arrangement Act (CCAA).

The motion, unopposed and supported by the Monitor, requested an extension of the stay period, approval of a Key Employee Retention Plan (KERP) and its associated charge, and increases to the Administration and Directors' Charges.

The court granted the AIRO, finding the stay extension appropriate given the applicants' good faith and diligence in pursuing an orderly wind-down, the KERP reasonable and necessary for restructuring, and the charge increases modest and well-supported.

The applicants, Nordstrom Canada Retail, Inc., Nordstrom Canada Holdings Inc., LLC, and Nordstrom Canada Holdings II, LLC, sought an initial order under the Companies’ Creditors Arrangement Act (CCAA) for a stay of proceedings to facilitate an orderly wind-down of their Canadian operations.

Nordstrom Canada, a subsidiary of Nordstrom US, had incurred significant losses and Nordstrom US had ceased financial support.

The court granted the requested relief, including a 10-day stay of proceedings, extension of the stay to Nordstrom Canada Leasing LP and, for limited purposes, to Nordstrom US (Parent Stay), approval of an Employee Trust funded by Nordstrom US, appointment of Employee Representative Counsel, and authorization for certain pre-filing payments to critical suppliers.

The court also approved Administration and Directors' and Officers' charges.

The applicants, representing various public sector unions, challenged the constitutionality of the Protecting a Sustainable Public Sector for Future Generations Act, 2019 (Bill 124), which limited wage increases for broader public sector employees to 1% per year for a three-year moderation period.

The court found that the Act substantially interfered with the applicants' right to freedom of association under s. 2(d) of the Charter by preventing meaningful collective bargaining over wages and other compensation-related issues.

The court dismissed the applicants' claims under s. 2(b) (freedom of expression) and s. 15 (equality rights).

The court further held that the infringement of s. 2(d) was not saved by s. 1 of the Charter, as the government failed to demonstrate a pressing and substantial objective or that the measure was minimally impairing.

The Act was declared void and of no effect.

The Applicants, under CCAA protection, brought a motion seeking an order to authorize and approve the Revised Fourth DIP Amendment.

The motion was opposed by the USW and GIP.

The court granted the motion, finding that the DIP solicitation process was competitive, robust, and fair, and that the Revised Fourth DIP Amendment was the best available proposal.

The amendment addressed previous concerns by providing a maturity date past the winter build period, a sufficient commitment amount, and minimal conditions on covenants.

The applicants (Algoma) sought two declarations: (i) that amounts owing under a promissory note from Portco to Algoma had been set off against amounts Algoma owed to Portco under a Cargo Handling Agreement; and (ii) that Algoma's right to terminate related Port Agreements was not subject to Portco's payment of the GIP Loan, which was tied to the set-off amounts.

The court granted the first declaration, finding that equitable set-off applied given the close connection between the parties and transactions, and the manifest inequity of requiring Algoma to pay Portco while the parent company (EGFL) failed to pay the promissory note.

However, the court denied the second declaration, holding that it would contradict a prior oppression judgment and an assignment agreement which explicitly required the GIP Loan to be paid in full in cash before Algoma could terminate the Port Agreements.

Essar Capital Limited and USW Local 2251 brought motions within a Companies’ Creditors Arrangement Act (CCAA) proceeding.

Essar Capital sought to re-open the Sale and Investment Solicitation Process (SISP) and compel the disclosure of information to Essar Global for a potential bid.

Local 2251 sought court advice on engaging in discussions with Ontario Steel Investments Ltd. regarding potential transactions.

The court dismissed both motions, finding no basis to interfere with the established SISP, noting Essar Global's prior failure to demonstrate financial capability and the lack of a formal bid from Ontario Steel.

The court emphasized the need to maintain the integrity of the court-ordered process and avoid delays detrimental to the restructuring.

A school board sought court approval of a proposed methodology to distribute approximately $1.7 million received following the windup of a group insurance trust.

The plan allocated a portion to future benefit premium reserves and distributed the remainder to non‑union employees enrolled in the insurance policies as of June 30, 2006, using a banding system based on years of participation.

An objector representing former employees argued that excluding individuals who ceased enrollment before that date was unreasonable because they had contributed premiums to the trust.

The court held that the board had broad discretion under the court‑approved trust windup terms and that basing distribution on enrollment as of June 30, 2006 was rational because that same metric determined the board’s share of the surplus.

The court also found it reasonable to consider administrative costs and data limitations in designing the methodology.

The proposed distribution methodology was approved.