Royal Oak Mines

The Royal Oak Mines Incorporated was a gold mining company, founded in 1990 by Peggy Witte in Kirkland, Washington. They held numerous gold and base metal properties in Canada, including the Giant Mine in the Northwest Territories, Pamour Mine in Ontario, Hope Brook Mine in Newfoundland, Colomac Mine in the Northwest Territories, and the Kemess Mine in British Columbia. The company also had significant interests in minerals in China through Asia Materials (44% share) and Highwood Resources (39% share). The company reported nearly $600 million (US) in assets, and loss of $4.4 million on revenues of $187 million (US) for fiscal 1996. Its Hopebrook and Colomac mines were closed in 1997. Low gold prices of 1997-1998 caused Royal Oak to go bankrupt in April 1999, and its mining assets were liquidated.¹

Royal Oak Mines and Canadian Labour Relations

Royal Oak Mines' operations at the Giant Mine in Yellowknife became infamous in Canada during the 1990s as the site of a protracted and violent industrial relations dispute. An eighteen month strike was punctuated in 1992 by the bombing deaths of 9 miners. In addition, a handful of workers were dismissed for picket-line violence. The employer's steadfast refusal to discuss grievance arbitration for these and other dismissed employees constituted the single largest sticking-point in the negotiations. The Canada Labour Relations Board intervened several times during the bargaining process and eventually forced Royal Oak Mines to return to the negotiation table with a previously withdrawn proposal. Royal Oak Mines sought judicial review of this order, with the dispute winding its way through the court system during the first half of the 1990s. This set the stage for significant changes in Canadian labour law as evident in the Supreme Court's 1996 decision in Royal Oak Mines v. Canada (Labour Relations Board), [1996] 1 S.C.R. 369. In his majority decision Peter Cory, J., formulated a distinction between the subjective and objective aspects of the duty to bargain. A 'good faith' requirement forms the subjective aspect of this duty, while a requirement to 'make every reasonable effort' to conclude a collective agreement injects an objective standard into the analysis. In this decision Royal Oak Mines was compelled to return to the bargaining table on the basis that its refusal to discuss grievance arbitration with the Canadian Association of Smelter and Allied Workers, Local No. 4 constituted an unreasonable limitation on the bargaining process and thereby represented a lack of good faith. In coming to this conclusion the Court observed that grievance arbitration for dismissed employees was a nearly universal characteristic of collective agreements in Canada.²

¹ Some data obtained from Morningstar, Inc. 1997.

² See The Labour Law Casebook Group, Labour and Employment Law: Cases Materials and Commentary 7/e. Toronto: Irwin law, 2004.