Group representing repair shops seeks injunction over terminated deal with MPI
WINNIPEG -- The Automotive Trades Association of Manitoba is seeking a court injunction over a terminated compensation agreement with Manitoba Public Insurance.
The group, which represents 232 auto body repair shops in the province, filed a statement of claim in Manitoba Court of Queen’s Bench Apr. 1. The claim alleges MPI pressured shops to enter into individual compensation agreements by Apr. 14 or face operating sanctions.
While the group now says shops are no longer facing those same sanctions from MPI if they don’t sign by next week, it wants an arbitrator to get involved to help the two sides hammer out a new deal.
MPI terminated a repair rate deal last month with accredited shops - the shops people can take their vehicles to get fixed following collisions or other damage covered by Autopac.
Customers who make a claim through MPI can still get their vehicles fixed but it’s unclear exactly what will happen when the current deal ends.
“We’re in uncharted waters here,” said Steve Dennis, executive director of the Automotive Trades Association of Manitoba. “We’ve never had a termination before.”
In mid-march MPI terminated the compensation agreement with the shops a month before it was set to expire.
The public insurer said it is now offering compensation agreements to individual shops.
The association said its members couldn’t accept earlier proposals from MPI.
Dennis said shops want labour rate increases to keep up with the costs of doing business and hiring new staff.
“If we don’t have labour rate increases we can’t increase what we pay our employees. It’s difficult to hire people when you’re paying the same wage that you were paying four years ago,” he said
For its part, MPI said it was negotiating fair and reasonable compensation for the work shops do and is now offering individual agreements.
“We have engaged in open discussions with individual repair outlets and at this point more than 100 collision and glass repair outlets from across the province have agreed to work directly with MPI,” the public insurer said in an email.
“We recognize that offering the new Light Vehicle Accreditation Agreement directly to repair shops is a change in our relationship with repair shops in Manitoba; this is common practice in other parts of Canada.”
MPI said a breakdown of the number of glass repair outlets and collision shops that have agreed to work with them wasn’t readily available Friday.
Even though the current agreement has been terminated, MPI said customers can still get their vehicles fixed at accredited shops during a 90-day notice period.
MPI said there should be little to no disruption to customers come Jun. 13, when that period ends. But the shops aren’t sure who will be fixing vehicles if they lose their accreditation.
“We don’t want to do anything that’s going to impair our ability to service customers,” said Dennis.
Johnny Vernaus, owner of Vernaus Auto Body and president of the Automotive Trades Association of Manitoba (ATAMB), said shops are facing financial challenges.
“To keep up with the technology nowadays in repairing cars, the cost of doing business has gone up tenfold,” he said.
The ATAMB said as far as it is aware, very few collision shops have signed an agreement with MPI.
Vernaus’ shop hasn’t signed on. He hopes something can be worked out soon.
“Hopefully everyone gets back to the table,” he said. “That’s what we want.”
MPI said it’s not commenting on the application for an injunction, outside of what’s said in court.