Members of International Association of Machinists Local 771 and the International Brotherhood of Electrical Workers 1744 are fighting AbitibiBowater regarding changes to their pensions which they say they have not agreed to.
Union reps are in Thunder Bay this week to begin arbitration regarding the “biomass agreement” struck in early 2007 and whether it applies to a new pension plan.
IAM Grand Lodge rep Brian Short, along with IAM 771 past president Herman Pruys, who organized a rally here last Wednesday, said in an interview that AbitibiBowater is imposing terms of a new pension plan on IAM and IBEW members which goes against the terms of this so-called “biomass agreement.”
“In that agreement, we gave up our right to strike in this collective agreement and, in return, the company got the big boiler and it would afford them an uninterrupted payback period over the term of the collective agreement,” noted Pruys.
“So in this biomass agreement, it said specifically what could be bargained and what could not, and there was an unambiguous exclusivity on pension,” he stressed.
“The last collective agreement had a moratorium on pensions through to 2014,” said Short.
“Part of that, from that period of time when the collective agreement expired in 2009 to 2014, there was some pension plan improvements that were negotiated and part of those pension plan improvements were a couple of indexing increases,” he explained.
The company has notified all unions that it is not going to pay the indexation payments for 2011 or 2013.
An indexing increase is a sort of pension increase, whereby the retiree gets 50 percent of the Consumer Price Index (CPI) every two years.
The indexation rate is set at 0.8 percent.
“We’re not talking big dollars. It’s principle,” argued Short.
“But you get somebody who’s been retired a long time, the extra $10 or $15 is huge for some of those people,” stressed Pruys.
“It aught not to be taken away arbitrarily.”
Short said the company has negotiated with the Communications, Energy and Paperworkers (CEP) union for a new pension plan, but IAM and IBEW stand fast that this new plan—which does not include the aforementioned indexing—does not apply to them.
“By going into this new pension plan, part of the deal was that indexing for the old pension plan would go away,” noted Short.
“We’re in the throes of a dispute; the IAM and the IBEW are in the throes of a dispute with the employer.
“The employer wants to impose upon us the new pension plan and what we are saying is that the biomass deal does not allow the company to open up talks for pension,” Short added.
“It specifically says that only the unions have the right to open up talks for pension.”
Pierre Choquette, AbitibiBowater’s manager of Canadian Public Affairs, said it’s true that indexation payments have been put on hold, but that is only part of the greater restructuring process.
He noted that on Nov. 16, AbitibiBowater announced it had signed agreements with the Ontario government as part of its restructuring process, which allow the company’s pensioners to continue to receive 100 percent of their pension benefits “even though the company has gone through a restructuring process that has impacted thousands of shareholders, workers, and communities in the past year.”
Without these agreements and the successful completion of the restructuring process, pensioners only would have received 75 percent of their pension benefits.
“If you look at companies who are in the same position as we were, if we look at other companies that are either under restructuring or creditor filing protection, most of them do have cuts to the pension plan,” Choquette noted.
“But we actually had discussions with both governments [Ontario and Quebec] and had agreements where we continue to pay 100 percent of those pensions,” he stressed.
“We’re quite proud of that,” Choquette added. “That’s quite an achievement because we have more than 20,000 pensioners in Canada.
“So to come out of this restructuring and have that achievement is quite unique.”
Choquette pointed out the company has had to make cuts, and employees also have made concessions.
“In order for the company to have a leaner, financially sound, and successful business model, all of our employees accepted salary cuts between 10 percent and 15 percent and the company is committed to continue to lower its cost structure to remain competitive,” he remarked.
“In light of these tough decisions, the company also agreed to put indexation on hold for pensions in 2011 and 2013.”
Choquette said the indexation payment being put on hold “has been announced to all of our unions.”
“It’s not unique to one union, it’s all over the board,” he stressed.
AbitibiBowater directly employs about 8,500 workers and has some 20,000 pensioners in Canada
But Short said the unions are “pursuing all the avenues” to change the situation.
“We’re currently in the throes of an arbitration hearing,” he noted. “We’re proceeding with respect to that.
“As far as the interpretation and application of the biomass deal, we have filed an unfair labour practice with the Ontario Labour Relations Board on the employer with respect to how they’ve bargained with us this time around, with respect to how they’ve arbitrarily implemented the 10 percent wage cut, arbitrarily implemented all of their proposals to us that we’ve said they can’t do because they are not carrying over items from the pattern [agreement] in accordance with the biomass agreement,” he argued.
“We’re pursuing all of those avenues, and we’re going to do what we can,” Short vowed.
“We’re going to do what we can to maintain what these retirees negotiated, what they expect, and we’ll see what we can do.”
Pruys organized last Wednesday’s rally, which saw a group—carrying signs reading “Abitibi Don’t Play Around with Our Pensions” and “We Worked Hard For Our Pensions”—walk down Scott Street from the Legion to the mill parking lot at Scott and Central Avenue.
Pruys said IAM Local 771 represents upwards of 100 retirees while IBEW Local 1744 represents 22 retirees, with some of these machinists and electricians being 70, 80, or even more than 100 years old.
“It really bothers me . . . we’ve worked for those pensions, we’ve paid into them for many years, and we expect the company to live up to their commitments,” he remarked.
“We’ve got retirees out here who are being denied what we felt was negotiated—indexing increases in their pension,” said Short.
“The retirees got to the point where they wanted to make sure the Town of Fort Frances finally saw everything isn’t just all hunky-dory with this company.
“Just because this company is out of CCAA [Companies’ Creditors Arrangement Act] protection, it’s not just business as usual,” Short stressed.
“There’s some major disputes going on with the employees being represented by the IAM and IBEW, and we wanted to bring that to light.”