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Reid questions penalty clause in FPI sale agreement May 29, 2007 Opposition Leader Gerry Reid is questioning the penalty obligations that Highliner and Ocean Choice International (OCI) will have to pay if they close any of the FPI plants in the province or fail to meet employment commitments. Under the proposed deal, both Highliner and OCI will have to pay between $2 million and $5 million if they close a plant in this province. Under the Labour Standards Act, there is a provision that states if a business or plant is closed in this province, workers are entitled to receive up to 16 weeks of paid severance. This would amount to anywhere between $2 million and $5 million depending on the size of the plant to be closed. In the case of Marystown, this amount would be between $4 million and $5 million. "Today in the House of Assembly, I questioned the Minister of Fisheries as to whether the penalties outlined in this agreement were in addition to the severance payments that the companies are obligated to pay employees under the Labour Standards Act," said Mr. Reid. "I didn’t get a clear response from the minister, and I still question whether the penalty clause is separate from these severance obligations under this Act. It is possible that the penalty provision is nothing more than that which would have to be paid to workers under the Labour Standards laws. "I am also questioning what penalties are in place should OCI fail to meet employment commitments. I have asked the minister this question for two days, yet have not received an answer. In the agreement, it states employment levels are contingent upon price fluctuations and quota reductions. This is a broad statement and I would like to know what monetary penalties are in place should employment projections not be met. "While neither OCI nor Highliner may have any immediate intention of closing plants or reducing staffing levels, circumstances can change in a short period of time. Without concrete penalties in place that will act as a deterrent, I fear business decisions could take precedence over employment considerations. Unfortunately, I don’t believe the current penalty provisions are solid enough to protect the plants or the workers for the long-term and I encourage government to consider strengthening these provisions before any legal binding agreements are signed."
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