UPDATE 1-Canada's XL Foods reverses layoffs at plant hit by tainted beef

Sun Oct 14, 2012 6:14pm EDT

* Alberta meat packer now wants to satisfy conditions of license

By Russ Blinch

TORONTO Oct 14 (Reuters) - The company responsible for one of the biggest beef recalls in Canadian history on Sunday said it was recalling 800 workers just a day after a mass layoff had jeopardized its efforts to resume production.

XL Foods said on Saturday it was laying off 2,000 workers at its Brooks, Alberta plant, prompting the Canadian food regulatory agency on the same day to announce it could not complete its safety assessment if the plant was not in production.

But the privately held company said on Sunday it was now recalling hundreds of employees "to satisfy the condition of the temporary license to demonstrate the implementation of the enhanced protocols."

XL Foods was given the green light to resume beef production at its plant last Thursday under the close inspection of the Canadian Food Inspection Agency, or CFIA, after a massive recall of beef suspected of being tainted with the E. coli bacteria.

On Saturday XL Foods' announcement of temporary layoff of most of its staff, prompted the CFIA to say it could not continue to assess the plant's operations because the cutting of carcasses had stopped.

"Unfortunately, the company decided to stop operations after only cutting about half the carcasses," CFIA said in a statement late Saturday. "At this time, we are unable to complete our assessment."

The CFIA suspended the plant's operating license on Sept. 27, after a recall of millions of pounds of beef suspected of being contaminated with E. coli bacteria. At least 12 people in Canada are recovering from eating meat contaminated with the bacteria.

Doug O'Halloran, president of the plant's local union, said earlier on Sunday that it was a "stupid move" by XL Foods to layoff workers and called on the company to explain its actions.

"So it doesn't make sense why they would lay these workers off if CFIA says that they need to see more processing," O'Halloran, president of United Food and Commercial Workers Local 401, told CTV News on Sunday.

Millions of pounds of beef have been recalled across Canada and the United States, hitting food stores such as Wal-Mart Stores Inc, Costco Wholesale Corp, Safeway and Loblaw Companies Ltd. Some of the tainted beef also reached Hong Kong.

Both the plant's operators and the Canadian food inspection system have come under withering attack from Canadian opposition leaders and consumers for being slow to contain the crisis that they believe should also have been prevented.

CFIA has criticized the privately-held company for not following its own plan to ensure the safety of the beef it produces.

XL Foods said in a statement last week that it has addressed the problems raised by federal regulators, such as the need for better analysis detecting E. coli and improved record-keeping and monitoring.

But the plant's union said the culture at the plant needed to change to make food and worker safety the highest priority. The high speed production lines were "a serious problem," along with sloppy practices such as in the sterilizing of knives, the union said.

As the plant shutdown drags on, Western Canadian ranchers and feedlots were holding back cattle from the market, incurring extra costs. Some Canadian ranchers were shipping cattle to slaughter houses in Nebraska, Utah and Washington.

Canada is the world's sixth-largest exporter of beef and veal.

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