If workers at Essar Steel Algoma Inc. must take cuts during the company's hard times, they should also benefit in times of prosperity.
That's the position that the steel mill's biggest bargaining group, United Steelworkers Local 2251, has taken in contract talks.
Negotiating between unionized staff and the term lenders and senior noteholders looking to acquire Algoma always occurs behind closed doors.
But fresh details of the talks are coming to light in court documents filed last week in the Sault steelmaker's insolvency proceedings.
"It was made clear... during the December 2016 negotiations with the consenting creditors that if the members were called upon to make monetary concessions and/or to help Algoma mitigate business risk, then in keeping with prior restructurings, they would want to receive some form of equity interest in the restructured entity that was commensurate with the concessions being made and/or risk being assumed," Mike Da Prat, Local 2251's president, says in an affidavit sworn on Friday.
"Local 2251 addressed this point specifically in one of their meetings and it was not well received by the consenting creditors," Da Prat advised the court.
'It was shortly after this, in December 2016, that the consenting creditors halted negotiations," he said.
As SooToday reported last week, some of the most contentious concession demands have since been taken off the table.
Withdrawn this past October, according to court documents filed by Jim Rennie, Algoma's vice-president of human resources, are requests for a 10 per cent wage concession, a 10 per cent co-pay on health benefits, mandatory use of therapeutic substitution for prescription drugs and elimination of a vacation bonus.
Unusual bargaining tactics?
Rennie's conduct during recent contact talks has itself drawn criticism from sister Steelworkers Local 2724, Algoma's second-largest bargaining group.
"In my view, Mr. Rennie's approach to bargaining involves a lot of bluster, hard bargaining and – in Justice Newbould's words – 'strategic manoeuvering' but little, if any, meaningful dialogue or progress," Lisa Dale, local 2724 president, advised the court.
Negotiations on behalf of the steel mill's prospective new owners seem to be be driven by Algoma's current management, with Rennie sometimes the sole representative at the table, Dale says.
"Attendance by the consenting creditors' representatives at bargaining sessions was inconsistent. They often attended by video conference facility and they did not seem well versed (or sometimes even interested in) the issues being discussed."
The Steelworkers view this conduct as highly unusual.
"Bidders typically do their own negotiating and do not typically defer to the leadership of the entrenched management that captained the failure of the business," Dale added.
Health and safety issues
Last week's court filings suggest health and safety issues have emerged as a major sticking point between the Steelworkers and Algoma management.
"Local 2251 members are routinely responsible for the following safety-sensitive issues: the operation of heavy machinery including overhead cranes, heavy lift transports, Kress [slag pot] carriers, large dump trucks, forklifts, small cat trucks, tractor-trailer dump trucks, road sanders, road graders, road sweepers, backhoes, straddle trucks, dino trucks, road flushers, excavators, large mining trucks, Terex [off-highway dump] trucks, pay loaders, IT loaders, water trucks, 15-ton boom trucks and 26-ton boom trucks," Da Prat says in his Friday affidavit.
Coke ovens, coke batteries, blast furnaces, the slabcaster, direct strip production complex and ladle metallurgy furnace operate at temperatures ranging from 1,519 F to 2,710 F and raise obvious safety issues.
"Due to the highly safety-sensitive nature of the workplace, Algoma and Local 2251 have an extensive history of negotiating and resolving safety issues and safety policies at the facilities," Da Prat says. "Prior to and since obtaining protection under the Companies' Creditors Arrangement Act, Algoma has repeatedly violated the negotiated health and safety provisions of the collective agreement."
Lisa Dale at Steelworkers Local 2724 also flags this as a major concern.
"My observation is that health and safety practices at Algoma have deteriorated materially since Essar acquired Algoma in or about 2007 or 2008, and that these are legitimate concerns on the part of Local 2251, which are shared by Local 2724," Dale says.
The Steelworkers are fighting to have a joint health safety and environment manual formally incorporated into collective agreements and they refuse to discuss monetary issues until this non-monetary issue is resolved.
"The reason we have taken this position is because, in my experience, in collective agreement negotiation, it is very difficult to maintain focus on non-monetary issues once discussions of monetary issues commence, and health and safety issues are too important at this time to risk losing this focus," Da Prat advised the court.
Da Prat is also expressing concern about communications restrictions imposed on the Steelworkers last year by Superior Court Judge Frank Newbould.
"The success of Local 2251's efforts in collective bargaining depends in large part on its ability and its practice of open and candid communication with its members, and in turn with the community in which its members live," Da Prat says in his most recent affidavit.
"If Local 2251 determines that it is appropriate to have a communications blackout during a portion of the collective bargaining process, that must be a decision made by Local 2251, and cannot be imposed by a court or any other person or body. Free collective bargaining cannot be subject to such constraints."
"Local 2251 is... strongly opposed to any order or terms of an order that would in any way limit or restrict its ability to conduct collective bargaining in the manner it determines is in the best interests of its members, subject to the Labour Relations Act."
For much of last year, a gag order imposed by the now-retired Judge Newbould severely restricted the ability of SooToday to report on the interest of Tom Cooke and his MAGA Steel Corp. in acquiring the Sault steelworks.
