Federal government threatens legal action against Stelco over Hamilton layoffs

The federal government has given Stelco 15 days to reverse the layoffs of about 500 workers at its Hamilton plant or face legal action. Industry Minister Mélanie Joly said she is prepared to meet with company executives only if the workers are "recalled immediately." She demanded Stelco and its parent company, Cleveland-Cliffs, provide a "concrete and credible plan for re-engagement with these workers." Failure to comply could lead to proceedings under the Investment Canada Act, which might force Cleveland-Cliffs to divest of the Canadian steel firm. Stelco began issuing the layoff notices at the start of October after announcing a pullback in operations at its Hamilton facility. The company stated the affected employees would be offered positions at its Lake Erie plant. The union representing the workers, however, said only 40 such job offers have been made to the Hamilton employees who received layoff notices.

Joly's warning was detailed in an Oct. 29 letter to Stelco president Paul Simon, obtained by Global News. She said an interim compliance report from Stelco dated Oct. 26 was "far from satisfactory." "It does not alter my belief that Stelco and Cleveland-Cliffs are not in compliance with their undertakings under the Investment Canada Act as set out in my October 22 section 39 demand," Joly wrote. She expects the companies to address her demands "fully and directly" and to furnish the "underlying data, documents and other evidence necessary to support their assertions." Cleveland-Cliffs announced the plan to eliminate 500 jobs and close part of the Hamilton plant last month. The legal threat marks an escalation in the federal government's response to the job losses. Joly's letter sets a clear condition for any meeting with Stelco leadership, linking it directly to the immediate recall of the laid-off workers.

With files from Global News and CP24