XL Foods temporarily laying off 2,000 staff at beleaguered Brooks facility – Alberta Federation of Labour president says move ‘boggles the mind’

By Elise Stolte and Marty Klinkenberg, Edmonton Journal October 14, 2012 11:27 AM

EDMONTON – The president of the Alberta Federation of Labour lashed out at XL Foods’ owners after hearing that the company embroiled in the largest meat recall in Canadian history was laying off 2,000 employees at its packing house in Brooks.

On Saturday, XL Foods announced the temporary layoffs earlier in the day, citing the absence of a timeline for reopening its plant. The firm’s licence to operate was suspended by federal regulators on Sept. 27 after beef trimmings and ground meat from the processing facility tested positive for E. coli 0157: H7 multiple times.

The company had been working to implement safety improvements with the Canadian Food Inspection Agency and appeared to be within a few days of resuming full operations when Brian Nilsson, the Edmonton-based company’s co-CEO, announced the sudden layoffs.

“I am surprised,” McGowan said by telephone from Quebec City. “It is hard not to see this as another ill-conceived decision by the owners of XL Foods.
“It is clear they were close to the point where the plant would reopen, so why would they take a risk that their employees would possibly leave town? There is a real risk that they might not have enough people to get the plant open even if they get a green light from the CFIA.

“It doesn’t make sense.”

The company’s problems began Sept. 3 when U.S. officials discovered E. coli 0157: H7 during a random inspection of beef trimmings at the Montana border. The following day, the CFIA came up with a positive test result for E. coli as well. Subsequently, 15 Canadians have become sick from the bacteria, and the company has lost its privileges to export to the U.S. as well.

More than 1,800 products have been pulled from store shelves across Canada and the U.S. since the first in a long list of recalls was made Sept. 16.

The CFIA had granted XL Foods a temporary licence to make safety improvements, but hasn’t provided a definitive timeline for reopening the plant.
“It is with deep regret we have announced the temporary layoff of 2,000 employees today,” Nilsson said in a news release, adding that workers had received full pay over the last three weeks. “It is this uncertainty that has forced the temporary layoffs.

“We look forward to actively working with the CFIA to bring this to a viable and timely resolution.”

The CFIA responded by issuing a statement of its own, blaming the company for the delay. The CFIA charged that it has been unable to complete a safety assessment because XL Foods stopped after cutting only about half as many carcasses as the agency needed to assess the plant’s E. coli monitoring capability.

“We have clearly outlined the steps and actions we require the company to take so that we can be sure that food safety controls in the plant are working effectively,” the CFIA said. “The speed at which XL Foods Inc. begins normal operations is solely dependent on their ability to demonstrate that they can produce safe food.

“At this time, we are unable to complete our assessment. We recognize the company wants to return to normal operations as soon as possible, but the CFIA has a responsibility to assure consumers that the plant can produce safe food.”

The agency said no products will be allowed on the market until it is confident that the plant’s food safety controls are working effectively. Beginning Monday, it has authorized some meat products currently under detention at the facility to be sent for rendering, a high-temperature disposal method. Shipments will be supervised, and none of the rendered material will be sold for food.

Provincial Agriculture Minister Verlyn Olson hosted a hastily assembled media conference on the steps of the legislature late Saturday afternoon. He’ll address reporters again Sunday afternoon in Brooks, where he’s meeting with Mayor Martin Shields and others affected by the XL layoffs.

“Our hope is this is a short-term setback,” Olson said Saturday, suggesting layoffs may have been triggered by a timeline spelled out in a collective agreement.

One out of every six people in Brooks works at the plant, and Olson said he spoke with both the Brooks mayor and federal Agriculture Minister Gerry Ritz earlier in the day. Service Canada will be on-site Monday to help people apply for employment insurance.

Testing at the plant is going well, and results should be available Monday morning at the earliest, Olson said.

Other than that, the provincial government can only watch, since the CFIA is responsible for approving the reopening of the plant, he said.

“The ball is in XL’s court,” Olson said. “It’s not within our ability to step in and make CFIA do anything or make XL do anything. When I say we’re watching carefully, it means that we’re talking multiple times a day to the various players in their picture and encouraging them to do whatever is necessary.
“We are taking XL at its word that this is a temporary layoff.”

NDP Leader Brian Mason, who was also at the legislature, suggested things are worse than the government is letting on.

“It’s not a good move for XL Foods because they have many immigrants working in the plant who cannot afford to stay if they are not being paid. It’s always been a problem in that plant to find labour,” said Mason, who visited the facility during a 2005 strike and union organizing drive. “This layoff will mean people leave town and look for something else. That will create additional problems for XL.

“This is probably a more serious setback than the minister would have us believe. (The company) has some reason to believe this plant is going to be shut down for a while at least.”

“We are hopeful that the CFIA will bring this to a swift and viable resolution.”

Doug O’Halloran, president of the union that represents the plant’s workers, said they were informed of the layoffs Saturday afternoon during a meeting. They take effect immediately, he said, and it remains uncertain when workers will be back on the job.

“I’m as shocked as I’m sure the rest of the workers are,” O’Halloran said. “We’re just as caught off guard as everyone else. We’ll be helping people fill out for EI and trying to find jobs for them at some of the other plants and doing what we can to assist them.”

According to the union’s most recent contract, employees at the plant were due to receive wage increases on Nov. 1. Workers on the production line were to earn from $15.40 to $20.75 per hour, depending on experience, custodians would make between $10.35 and $17 per hour, maintenance workers would earn between $16.40 and $36.25 per hour, and employees working in rendering operations would make between $15.40 and $31.25 hourly.

McGowan, meanwhile, wondered if the layoffs were announced by XL Foods as a means of putting pressure on the CFIA to get the plant open more quickly.

“If they are playing chicken with the regulators, it’s a boneheaded move,” McGowan said. “I certainly hope the CFIA will only certify the plant once it is confident the company has completed all of the changes needed to assure public safety.

“I think we were literally days away from the plant reopening. This boggles the mind.”

A spokesperson for federal minister Ritz said the halt to operations was directly linked to the layoffs.

“Their decision to lay off workers results in them not being able to continue with the CFIA assessment,” Meagan Murdoch said in an email.

Ritz said his thoughts are with the workers and the community that are affected by the “private-sector business decision” by XL Foods. He said CFIA inspectors are working diligently to ensure all safety issues at the Brooks plant are corrected.

“Today’s news does not change our government’s commitment to ensuring safe food for Canadian consumers,” Ritz said in a statement.

With files from the Calgary Herald and The Canadian Press

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