17 May, 2010
Pulp and paper mill staff belonging to the Communications, Energy, Paperworkers (CEP) Union of Canada saved their pensions at AbitibiBowater, but more importantly, they assured a future for the world’s largest newsprint producer.
And in the US, the United Steelworkers (USW) did its part to keep AbitibiBowater solvent and operating. USW members ratified a four-year agreement that grants the company immediate financial relief, but aligns four US mills into a first-time master labour contract and gives workers future job and union security, as well as preserving some of the best terms in the American paper industry.
CEP members at 12 AbitibiBowater mills in eastern Canada ratified a five-year agreement in recent days with a 63.5% vote that grants cost reductions to AbitibiBowater, currently in creditor protection proceedings both in Canada and the US, but preserving pensions for both current and future retirees.
A full year after pulp and paper collective agreements expired in Canada’s east, the CEP declared at its Eastern Pulp and Paper Caucus on 14 May that the AbitibiBowater contract – covering 3,500 workers – is “extraordinary” because the Montreal-based firm is in Canada’s Companies’ Creditors Arrangements Act (CCAA). But the contract terms and future wage increases negotiated a month earlier with AbitibiBowater will set the standard for the eastern pulp and paper industry.
“CEP members remain committed to pattern bargaining and this declaration of our pattern for the industry is our best effort to negotiate a fair and balanced standard for the industry,” said President Dave Coles.
CEP President, Dave Coles
Provincial finance ministries in both Ontario and Quebec must still approve the company’s restructuring under CCAA before the CEP agreement goes into effect. The agreement, dating back to April 2009 and extending until April 2014, calls on AbitibiBowater to contribute C$500 million into a union-operated pension fund over the next ten years.
Coles said a newly-established defined benefit pension plan guarantees that “never again” will AbitibiBowater workers have their pension savings jeopardized. The agreement also includes a 10% wage cut, with wage increases to resume in 2012 and 2013.
“Our feeling is that you can always get wages back, but retrieving lost benefits, particularly on pensions is something else,” stated Coles.
In the US, USW-represented workers will take an immediate 3% wage cut, but will also recoup those cuts in 2012 and 2013. The master labour agreement, covering four mills in the US southeastern states of Alabama, Georgia, South Carolina, and Tennessee, will have mill-level expiration dates within months of each other in 2014.
USW VP Jon Geenen
It also contains a “successorship” clause, meaning in the event a plant is sold, union representation remains, and neutrality language guaranteeing AbitibiBowater’s non-interference when USW attempts to recruit workers at non-union worksites. International Vice President Jon Geenen, who heads USW’s pulp and paper sector, said that although negotiations were difficult due to the company being in bankruptcy, the new agreement gives the USW important bargaining table leverage for the future.