Shock to the sys­tem

Feds, prov­ince op­ti­mistic po­ten­tial buyer will re­open bank­rupt call cen­tre

Cape Breton Post - - FRONT PAGE - BY CHRIS SHAN­NON

the Syd­ney call cen­tre will move ahead with a plan in the com­ing days.

The com­pany sus­pended op­er­a­tions mid-af­ter­noon Thurs­day af­ter a last-ditch at­tempt to save the op­er­a­tion — owned by New Jersey-based JNET Com­mu­ni­ca­tions — fell through Wed­nes­day night.

The clo­sure threw at least 600 em­ploy­ees out of work with just over two weeks to go be­fore Christ­mas. ServiCom and JNET had pre­vi­ously filed for Chap­ter 11 bank­ruptcy pro­tec­tion in a Con­necti­cut court on Oct. 19.

The com­pany’s other call cen­tre in Mach­es­ney Park, Illi­nois, closed down Thurs­day as well.

Politi­cians briefed on the mass lay­off at ServiCom are con­fi­dent an in­vestor in­ter­ested in buy­ing

Two oth­ers in the state were shut­tered on Sept. 29.

Cape Bre­ton politi­cians at the fed­eral and pro­vin­cial lev­els met with for­mer ServiCom site direc­tor Todd Ri­ley and bu­reau­crats from the At­lantic Canada Op­por­tu­ni­ties Agency and Ser­vice Canada on Fri­day at the ACOA of­fice in Syd­ney.

An Amer­i­can in­vestor who was in­volved in the process to pur­chase the com­pany over the past few weeks is still in­ter­ested in tak­ing over the Syd­ney call cen­tre de­spite the deal fall­ing apart ear­lier this week.

Busi­ness Min­is­ter Ge­off MacLel­lan said he found it “very en­cour­ag­ing” the call cen­tre may have a fu­ture but he cau­tioned the bank­ruptcy process has yet to fully un­fold.

“It’s clearly con­nected to a court pro­ceed­ings process in the U.S. around the dis­sem­i­na­tion of the as­sets and what hap­pens with some of the funds that are in place from this par­tic­u­lar en­tity,” he said fol­low­ing the meet­ing.

“There’s a lot of mov­ing parts and lo­gis­tics to man­age around the re-es­tab­lish­ment of this cen­tre in Syd­ney but that is cer­tainly look­ing promis­ing at this point.”

He said the prov­ince will be “very cre­ative” when it comes to of­fer­ing a com­pany em­ploy­ment in­cen­tives if the call cen­tre re­opens.

Like MacLel­lan, Syd­ney-Vic­to­ria MP Mark Eyking spoke with Ri­ley and found out more de­tails about the po­ten­tial buyer of the call cen­tre.

Eyking said he liked what he heard from Ri­ley. There’s the pos­si­bil­ity the fed­eral gov­ern­ment will work with an in­vestor, pro­vid­ing loans if needed, to get the op­er­a­tion run­ning again, the MP said.

“We’ll sit down with this new op­er­a­tor, of course. And maybe it’s new tech­nol­ogy. We’d like them to come back to the same place. I think that’s doable from Mr. Ri­ley’s per­spec­tive be­cause it’s all there.”

Eyking said ACOA could also pro­vide money for train­ing up­grades for em­ploy­ees.

Ac­cord­ing to Ri­ley, news on whether the in­vestor wants to re­open the call cen­tre could come as early as Mon­day or Tues­day.

ServiCom has made use of fed­eral gov­ern­ment loans and pro­vin­cial pay­roll re­bates in the past.

The call cen­tre re­ceived fed­eral gov­ern­ment sup­port in 2010 for cap­i­tal up­grades and to ex­pand its op­er­a­tions.

ACOA pro­vided a $500,000 loan, while En­ter­prise Cape Bre­ton Corp. also wrote a loan for $138,360. It was part of a to­tal project cost of $1.2 mil­lion.

Ac­cord­ing to ServiCom’s Chap­ter 11 fil­ing in Oc­to­ber, the feds still have unse­cured claims on two loans in the amounts of $43,292.68 and $12,659.02.

A Nova Sco­tia Busi­ness Inc. pay­roll re­bate pro­gram ServiCom in­vested in wrapped up when it ex­pired in 2012.

The call cen­tre earned $366,594 from the re­bate for cre­at­ing 102 full-time equiv­a­lent po­si­tions un­der the terms of the agree­ment, NSBI spokes­woman Emily Neil said in a Nov. 2 email.

The com­pany owed $205,893.91 in in­come taxes to the Canada Rev­enue Agency as of Oct. 19.

The em­ploy­ees are among the largest unse­cured cred­i­tors listed in ServiCom’s bank­ruptcy fil­ing. Some are miss­ing at least three weeks’ pay plus bonuses, with lit­tle re­course to re­cover that money.

NDP labour critic Tammy Martin in­tro­duced a pri­vate mem­bers’ bill in the leg­is­la­ture this fall seek­ing wage theft pro­tec­tion for em­ploy­ees sud­denly left with­out a job due to a com­pany’s clo­sure caused by bank­ruptcy.

A fund sup­ported by the prov­ince would dis­perse money to help em­ploy­ees make ends meet.

“This is a cri­sis and when there’s a cri­sis the gov­ern­ment needs to step in,” she said. “The gov­ern­ment has a lot more re­sources to fight these mat­ters in court than an in­di­vid­ual mak­ing, you know, min­i­mum wage, or if they’re lucky, $15 an hour.

“Most of these fam­i­lies don’t have the abil­ity to fight these mat­ters but the prov­ince does.”

As a pri­vate mem­bers’ bill, it has lit­tle chance of be­com­ing law.

MacLel­lan said he’s not sure if it takes leg­is­la­tion by the pro­vin­cial gov­ern­ment to en­sure com­pa­nies pay em­ploy­ees what they’re owed.

“I think with pri­vate sec­tor en­ti­ties, most op­er­ate un­der a cor­po­rate so­cial re­spon­si­bil­ity whereby they look af­ter their em­ploy­ees. In this case, we cer­tainly hope that money is there and ex­pect that money to be there for the work that was ren­dered to this point.”

In the short-term, he said the pri­or­ity is to pro­vide sup­port for laid-off em­ploy­ees, in­clud­ing fast­track­ing em­ploy­ment in­sur­ance ben­e­fit claims and op­tions for re­train­ing through provin­cial­ly­funded pro­grams.

ONTRIBUTED/MP MARK EYKING’S OF­FICE

Politi­cians and bu­reau­crats hud­dled Fri­day morn­ing to dis­cuss the sud­den clo­sure of ServiCom, Syd­ney’s only call cen­tre, with the com­pany’s for­mer site direc­tor Todd Ri­ley at the At­lantic Canada Op­por­tu­ni­ties Agency of­fice in Syd­ney. The com­pany shut down sud­denly Thurs­day, throw­ing more than 600 peo­ple out of work af­ter a deal to save ServiCom from bank­ruptcy fell through Wed­nes­day night. From left are Busi­ness Min­is­ter Ge­off MacLel­lan, Mines and En­ergy Min­is­ter Derek Mom­bour­quette, Ri­ley, ACOA direc­tor of en­ter­prise devel­op­ment Joe Cashin, Syd­ney-Vic­to­ria MP Mark Eyking, Ser­vice Canada home­less part­ner­ing strat­egy rep­re­sen­ta­tive Jim Clarke, Ser­vice Canada in­tegrity ser­vices in­ves­ti­ga­tor Don­nie MacIsaac, Cape Bre­ton-Canso MP Rodger Cuzner’s ex­ec­u­tive as­sis­tant Kris Kolanko and ACOA direc­tor gen­eral of com­mu­nity devel­op­ment Tom Plum­ridge.

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