In Print

Loads of blame to go around

By Kevin Steel ⋅ February 14, 2005 ⋅  Email this post ⋅  Print this post ⋅ Post a comment

A new ruling that blames business, unions and government for the bombing at Giant Mine could change Canadian industry forever

It seemed like an open-and-shut case of murder. On Sept. 18, 1992, Roger Warren, a locked-out miner at the Giant Mine in the Northwest Territories, detonated a bomb. The blast killed nine men: six colleagues who had crossed the picket line and three replacement workers. And in 1995, a jury convicted Warren of nine counts of second-degree murder and sentenced him to life in prison.

But the families of the murdered men believed that since the lockout had been marred by violence from the beginning, there was more blame to go around. They filed a lawsuit against Warren and nearly everyone else who had a role in the gruesome drama. On Dec. 16, N.W.T. Supreme Court Justice Arthur Lutz agreed, finding several parties liable for the crime, including the mine’s owner, the government and a union. The ruling, industry observers say, may change the mining business and labour relations forever.

Of the $10.7 million in damages awarded to the family, the mine’s owner, Royal Oak Ventures Inc., was held 23 per cent responsible, and Pinkerton’s Security, hired by Royal Oak to protect the strikebreaking workers, 15 per cent. The Canadian Auto Workers union was held 22 per cent liable–although they weren’t directly involved, but provided legal support to the Canadian Association of Smelter and Allied Workers during the dispute. Even the territorial government was dinged for nine per cent while one of Warren’s co-workers was held two per cent liable. And Warren, who planted the bomb that killed nine workers? He was deemed to be only 26 per cent at fault.

Buzz Hargrove, president of the Toronto-based CAW, which is planning to appeal the judgment, is outraged at the ruling, which he says demonstrates a lack of understanding by the judge of how unions work. “Just the very idea that somehow one union showing solidarity to another in a labour dispute, which has been the history of the labour movement for over 100 years, that somehow you are then responsible for the other union and the actions of individual members that are criminal in nature, is far beyond anything the law ever comprehended,” says Hargrove. “It showed the judge is incredibly right-wing and anti-labour.”

But Glenn Tait, an employment lawyer with McLennan Ross in Yellowknife, predicts the ruling will have a profound impact on business, too. Lutz’s rationale for the judgment, he says, is that “each of [the] parties should have expected, because of the actions they were taking or not taking, that [their actions] would cause damage.” In the future, any company that continues to operate during a labour dispute must anticipate the risk of terrorism by strikers, or any number of other scenarios. That makes things a lot more difficult for management. “What will this do to insurance premiums?” asks Tait. “Will they [the firm] be able to get insurance should they choose to operate during a labour disruption?”

Meanwhile, the fact that the judge zeroed in on the N.W.T. for safety violations at the mine that may have aggravated the catastrophe means that governments may become extra scrupulous during labour disputes, further complicating things for management.

Chris Rutledge, vice-president with Hampton Securities Ltd., a Toronto-based investment dealer, says the implications of Lutz’s ruling adds to a growing list of intangibles that hang “like a vague cloud over the future or pro forma balance sheet of a company.” With corporate governance mania raising standards of securities research and company reporting, he says, “the most immediate effect will be that research analysts will have to give more attention to, and give more mention of, a broad range of factors they might see in the future of a company.”

That may end up being trickier than it sounds. After all, could any analyst have accurately estimated the quantifiable risk of a worker committing a terrorist act? As Tait notes, “the boundaries coming out of the decision aren’t particularly clear.” The judge was able to find six separate parties responsible for the miners’ murder, but how many will there be next time. “If this case holds,” Tait says, “where are the boundaries?”

[This article appeared in the February 14, 2005 issue of the Western Standard.]