October 16, 2008 / 5:59 PM / 9 years ago

Wal-Mart Canada closes auto shop after union win

TORONTO, Oct 16 (Reuters) - Wal-Mart Canada (WMT.N) closed an auto center in one of its stores in Gatineau, Quebec, on Thursday, two months after employees won the right to unionize the tiny operation.

The six employees at the local Tire Lubrication Express won a three-year court battle in August to be represented by the United Food and Commercial Workers Canada, with the court imposing a 33 percent wage increase for the workers to an average C$13.76 an hour.

Wal-Mart Canada spokesman Kevin Groh said the company could not justify the wage hike.

“We think the numbers speak for themselves when the imposed contract would increase operating costs by more than 30 percent and combined with the fact that TLEs (Tire Lubrication Express) operate under very narrow profit margins, such a large increase could have raised consumer prices by more than 30 percent,” Groh said.

“No business can afford to run an unprofitable unit and it’s unlikely customers would accept a 30 percent price increase.”

In 2005, the company closed a Wal-Mart store in Jonquiere, Quebec, that had been the first in North America to win union certification. The store had employed 190 people.

Union representatives were not immediately available for comment.

Five associates and one manager of the tire and lubrication bay at the store were offered jobs at other local Wal-Mart automotive shops, Groh said. The larger retail store in Gatineau that housed the Tire Lubrication Express remains open.

$1=$1.19 Canadian Reporting by Scott Anderson; Editing by Peter Galloway

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