Canadian federal authorities are investigating the dismissal of Celadon's Hyndman Transport workers, who could be entitled to a large payout depending on the outcome.
Employment and Social Development Canada is conducting a group termination investigation in connection with the Dec. 9 shutdown and dismissal of an estimated 400 workers at Hyndman Transport.
"It is unfortunate when Canadian workers and their families are affected by job losses," ministry spokesperson Isabelle Maheu wrote in an email to FreightWaves on Dec. 24.
Ontario-based Hyndman shut down after Celadon filed for Chapter 11 bankruptcy in the United States. While drivers and other staff received their final paychecks, they have yet to receive severance and vacation pay owed under federal law.
Maheu declined to comment further on the probe. But the fact that the ministry is investigating it as a group dismissal could be significant for former Hyndman workers and costly for Celadon.
"This is an important first step," said Sara Slinn, a professor at Osgoode Hall Law School at York University and Canadian labor law expert.
Under federal law, collective dismissals of 50 or more people require 16 weeks' notice. An employer found to violate that could have to pay for 16 weeks of employment.
"That's potentially a significant amount of money," Slinn said.
How much ultimately can be collected is another question and may depend on the outcome of any bankruptcy proceedings. To date, Hyndman is only part of Chapter 11 proceedings in the United States along with Celadon and most of its subsidiaries.
A Canadian bankruptcy filing could make it easier for former Hyndman workers to collect any compensation they could be entitled to as a result of the investigation into their dismissal.
Meanwhile, the Ministry of Employment and Social Development also confirmed that former Hyndman personnel will remain ineligible for a federal program that compensates former workers who are still owed money from bankrupt firms.
Hyndman will need to file for bankruptcy in Canada or enter receivership in order for its former workers to be eligible for the Wage Earner Protection Program, Maheu said.
Rick Chesley, an attorney representing Celadon in the U.S. Chapter 11 proceedings, declined to comment on the investigation.
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