Peachland cannabis company 'coerced and intimidated' staff from unionizing: Labour Board

A Peachland cannabis producer has been ordered to re-hire nine staff members after the B.C. Labour Relations Board ruled the layoffs were due to the company's anti-union sentiment and an effort to coerce and intimidate the remaining staff members from unionizing.

Potanicals Green Growers argued the layoffs were necessary as the company was not making any money and was in a dire financial situation.

In the case between United Food and Commercial Worker International Union, Local 1518 and Potanicals Green Growers, the Labour Relations Board is not only critical of the way the firm treated its staff but also scrutinizes its future plans to become financially viable.

According to the B.C. Labour Relations Board decision, Oct. 16, just days before the layoffs took place there had been a union drive at the company and staff members had started the process unionizing.

The nine staff members laid off largely held better-paying positions and included two adult children of the company's CEO. The seven staff that kept their jobs were largely farmworkers, some of whom were temporary foreign workers. The decision says other employees who were not laid off had close connections to the company's management in the Lower Mainland.

In the decision, B.C. Labour Relations Board vice-chair J. Najeeb Hassan dismisses the company's cost-cutting argument saying that the company had not been profitable for a long time but still managed to "limp along" month to month.

"The employer’s consistently poor but apparently manageable financial situation begs the question: why did it suddenly have to layoff the employees immediately following the certification vote?" Hassan wrote. "If the situation was as dire as the employer suggests, one would have expected to see some documentation from senior management or the Board of Directors expressing serious concerns regarding the employer’s financial condition... the employer provided no evidence of that nature."

In the lengthy decision, the Labour Relations Board vice-chair looks through audited financial statements and breaks down large parts of Potanicals Green Growers finances in deliberating whether the company could afford the nine staffers or not.

The company is a subsidiary of publicly-traded company, Benchmark Botanics. The company holds a licence from Health Canada for the cultivation, processing, and sale of cannabis products but has yet to make any money.

The decision says Benchmark has incurred millions of dollars of losses since it was founded, although in the first six months of the year its net loss was $1.65 million, down from $2.71 million in the same period in 2019.

The decision lists the complex finances of the business and on the day of the hearing, the company said it only had $30,000 in cash after paying staff. However, the Labour Relations Board disputes this, citing figures from the company's balance sheet and saying one week before the layoffs, the company had almost $200,000 in liquid assets.

While not all of the Peachland staff were laid off, the Labour Relations Board also questions the logic for getting rid of key players at the production facility, two of whom were a prerequisite in complying with regulations in having a federal cannabis licence.

Potanicals Green Growers gives a detailed business plan on how it proposed to cut costs and its strategies for becoming profitable. However, the Labour Relations Board picked holes in the business plan disputing the company's strategies.

Potanicals Green Growers argued it planned to cut production and sell its existing inventory. But the Board disputes this, arguing the company's old inventory was largely worthless.

The Labour Board is also critical of Potanicals' position that it needs to stop cannabis production to cut costs.

"Stopping cultivation is inconsistent with the fact sales of its craft cannabis products are on a steep rise... it had just recently pitched the Alberta Distribution Board in order to make significant inroads into a lucrative market," the decision says. "It makes no sense to curtail production when demand is increasing."

The Labour Board said that by laying off a significant number of employees based on reasons that "simply did not make sense" the company was sending a "clear message" to existing staff not to become involved in union activities, which amounted to coercion and intimidation. 

"I conclude that the employer’s conduct in laying off the nine employees did not constitute proper cause and was not reasonably necessary for the proper conduct of its business. Rather, it was motivated, at least in part, by the fact that the employees had sought union representation," reads the decision.

Ultimately, the nine staff members were ordered to be reinstated.

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