|Author||Milanovic, Nick E.|
|Journal||Canadian Labour and Employment Law Journal|
This article considers the effect of recent statutory amendments that recognized the legal status of the collective agreement as a binding source of rights and obligations during the employer's insolvency. The author reviews the law prior to, and after, the amendments along with interview responses of leading insolvency practitioners in determining whether those amendments unduly interfered with or prevented the successful restructuring of distressed businesses, In his view, most of the early jurisprudence setting aside collective agreements to which the debtor company was a party distorted the development of the law in this area, weakened the legitimacy of the insolvency process, and generated unnecessary conflict in the midst of restructuring efforts. By contrast, the amended provisions, by recognizing that collective agreements remain in force during an employer insolvency, have restored proper balance to the law, fostered voluntary negotiations among the parties, and reduced unnecessary liti- gation between debtors and unions. Importantly, the reforms have transformed court-centered conflict over the status of the collective agreement into product- ive negotiations focused on the rescue of distressed businesses. As a result, the paper maintains, the reforms have brought positive change to the restructuring process, by facilitating the efforts of stakeholders trying to salvage the company.