Almost 4,000 union members at Algoma Steel in Sault Ste. Marie, Ont., were expected to vote on Dec. 21 on a 32-month contract that would avoid layoffs and protect pensions yet reduce wages by an average of 7.5% over the length of the deal.
If approved, the two-and-a-half-year contract would see workers and management receive an immediate 15% wage cut; wages would then be gradually restored to current levels by Dec. 1, 2003. In addition, $20 million of the wage reductions will be returned to employees in 2004 and 2005, in $10-million instalments.
The proposal was developed under the Companies’ Creditors Arrangement Act and is designed to put Algoma on secure economic footing. The company has been under court-ordered bankruptcy protection since April.
The proposal also calls for temporary reductions in vacation entitlement, suspension of vacation bonus, and changes to the pension plans.
Current early-retirement provisions would be continued, as would benefits available to any employee who retires during the proposed agreement.
A retiree transition program would encourage Algoma employees to accept early retirement while continue working for 1-3 years at 80% of their pay.
“This is no normal set of negotiations,” says Henry Hynd, director of District 6 of the United Steelworkers of America. “The bargaining committees are confident the tentative agreements we have reached is the best settlement we could make.”
The union is recommending the agreement to its members.
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