FAQ's Cases - Stewart McKelvey

4[11] To track production, Mr. Holodryga testified that he reviewed actual sales ofgoods to determine what goods, which had been ordered, still needed to be produced, whatgoods were currently in inventory (i.e.: not shipped to customers) and what the Employer hadfor goods on hand for which there were no outstanding orders (the “finished goods inventory”).This finished goods inventory was the primary indicator for him as to whether production wasoutstripping sales or whether or not additional goods manufacturing was required to meetexisting sales.[12] He testified that the finished goods inventory started to rise in April and did notdecline as the year progressed. He further testified that this was unusual in this business,testifying that finished goods inventories normally did not rise until October in a normal year.From figures provided by Mr. Holodryga, the following were the finished goods inventories forJanuary to July of 2011:2011 CanLII 72774 (SK LRB)MonthFinished Goods InventoryJan. $1,539,427Feb. $ 156,886Mar. $ 824,779Apr. $1,277,615May $2,180,607June $3,017,810July $4,085,635[13] He testified that he was concerned when the finished goods inventories rose inApril. He testified when the value of the finished goods inventory almost doubled in May, thathe knew that the Employer needed to reduce its manufacturing of goods, this meant a reductionin the number of employees employed to produce those goods, principally in the grain augerarea as that was the area of weak sales.[14] Mr. Holodryga testified that a decision was taken to reduce the workforce andthereby reduce manufacturing goods. However, no steps to reduce the workforce were taken atthat time, he testified, because the Employer was participating in the Farm Progress Show inRegina from June 15 to 17, 2011. In addition, the Employer had planned, in conjunction withthe Farm Progress Show, a Plant Celebration on June 14, 2011 to showcase the improvementsmade to their manufacturing facility. As a result, it was determined to not make any layoffs untilafter the completion of the Farm Progress Show and the Plant Opening Celebration.