North·In Depth

NTCL offers workers severance deals. The catch? No badmouthing the company

Northern Transportation Company Ltd. is asking at least 40 soon-to-be-former employees to sign a release barring them from speaking badly about the company, before the employees can receive their severance pay.

Employees, who will be permanently terminated come Oct. 31, asked to sign release by Friday

NTCL, which is nearing the end of its court protection from creditors, is offering severances to some of its workers, but only under certain conditions, including not disparaging the company. (NTCL)

Northern Transportation Company Ltd. is asking at least 40 soon-to-be-former employees, including several people in Hay River, N.W.T., to sign a release form barring them from speaking badly about the company — before the employees can receive their severance pay.

The release comes just a week and a half before the financially troubled company loses its court protection from creditors on Oct. 31, a possible step to declaring bankruptcy. 

"I won't be signing it and sending it off," says Wade Haley, a carpenter who worked for NTCL for 30 years, retired and then returned to work there for the last few years.

"It doesn't sit well. It makes you feel that, if you want to get a little bit of money from the company, you've got to sign this thing and you're forever told to be quiet."

Deadline to sign: Friday

On Monday, Debbie McKay, NTCL's director of human resources, sent letters to about 40 employees represented by the Union of Canadian Transportation Employees (UCTE). The letters told employees that they will no longer have jobs with the company on Oct. 31 and that they will not be recalled, as in previous years. 

"The business of NTCL is coming to an end," McKay wrote in the first line.

The letters were accompanied by a two-and-a-half page release and indemnity form — a form employees have been told to sign and return if they want to collect their severance pay.

Haley shared his release form with CBC News.

It shows that employees who sign and return the form by the Oct. 21 deadline — tomorrow — agree to not do the following:

  • launch legal proceedings "of any sort" against the company;
  • disclose the terms of the release;
  • "divulge any information, knowledge or data that I have acquired or received during my employment with the company;"
  • "disparage" NTCL;
  • or sue the company for any insurance, disability or any other benefits if they become disabled.

That last requirement troubles Haley.

He wonders about a scenario where "say, you get sick down the road, a year from now or three months or something, and the illness comes back to your job that you've done — working in silica or lots of diesel-encompassed areas."

Don't sign the form, says union

"We think the waiver is way, way too broad," said James Infantino, an officer at the Public Service Alliance of Canada (PSAC), UCTE's parent organization.

NTCL's shipyard in Hay River. (NTCL)

"It would in fact encase our claims that would have been made on the pension. That's a major issue."

Infantino is referring to a legal fight waged in August by PSAC and UCTE to have more than 600 current and former NTCL employees get first dibs on the proceeds of any sales of NTCL assets. NTCL wants that money to instead go to the banks to which it owes $130 million. Arguments from both sides won't be heard until early 2017.

Infantino says PSAC believes that any worker that signs the release might not be able to benefit from the union's legal challenge.

Severance pay lower than expected 

All of the approximately 40 UCTE workers appear to be offered severance pay lower than they were expecting, he added.

"Yet we have a collective agreement in force that provides for above the minimum standard. That's a problem," he said.

The unions are holding a conference call today at 12 p.m. Hay River time to discuss the situation. Until the outcome is decided, they are asking people not to sign the releases.

'We haven't had much contact with any of the parties involved,' said N.W.T. Finance Minister Robert C. McLeod on Tuesday. (Randall McKenzie/CBC)

But as even Infantino himself admits, concerns over the release could quickly become moot if the company declares bankruptcy.

That's why Haley, the carpenter, believes there's a chance NTCL is giving employees an opportunity to collect some money before the company becomes unable to pay it out.

"This might be one positive thing," he said, before adding, "Maybe. I don't know."

Tight timeline not unusual

Employment lawyers CBC News consulted say that while the language in the release may seem grave — especially to workers looking at the prospect of smaller-than-expected pensions — there is nothing particularly unusual in the release.

Not even the tight, less-than-one-week deadline to respond.

"Where there is no insolvency issue, companies typically give a week or two to respond to a severance package," said Stephen Wolpert of the Toronto firm Whitten & Lublin.

"However, in the insolvency world, everything moves faster. The company and its creditors are forced to make decisions on compressed timelines, parties appear in court on short notice.

"While this can make life difficult for lots of parties — especially unrepresented and/or unsophisticated parties like employees — it is not unusual."

Even a clause telling people not to "disparage" a company is becoming increasingly common in releases, says Kelly VanBuskirk of the firm Lawson Creamer, based in New Brunswick.

"There are so many more ways today for people to talk about their employees, like on social media," he said.

Nothing the GNWT can do

Rocky Simpson, the MLA for Hay River North, brought up the severance offers in the legislative assembly on Tuesday.

While he stopped short of asking the territorial government to bail out NTCL — a private business owned by the Inuvialuit Regional Corporation since 1985 — Simpson called on the government to do something to help NTCL's employees.

"To this point, we haven't had much contact with any of the parties involved," said Robert C. McLeod, the minister of finance, in response.

"We don't really have a standing in the bankruptcy proceedings."

NTCL declined to respond to a number of questions, including whether it plans to declare bankruptcy.

But through a spokesperson, the president of NTCL's Inuvialuit-owned holding company, Mark Fleming, said, "We are following all requirements through this process and are in touch with employees to answer questions and provide other details they may require.

"It was a difficult decision to enter into this [bankruptcy protection] process, but the company explored all available options and we were left with no other option."


Guy Quenneville

Reporter at CBC Ottawa, originally from Cornwall, Ontario.

Story tips? Email me at or DM me @gqinott on Twitter.