Catalyst Paper has reached a new labour agreement with its unions, a company news release said.
The contracts apply to more than 1,000 workers at the company’s Port Alberni, Crofton, and Powell River mills. The new contracts are effective after the existing contract expires on April 30, 2012.
According to CEP Local 592’s blog, officials reported on March 16 that the local chapter joined others in voting in favour of the agreement.
Officials further reported that a tentative deal was reached on March 11.
The agreements are a step in the right direction, but there are more steps to take yet, said Catalyst President and CEO Kevin J. Clarke.
“Approval of the new labour agreements lets everyone know that the people who make up Catalyst are taking the actions necessary to save jobs and ensure we have a viable and competitive business for the future,” Clarke said “We appreciate there is still an enormous amount of work to do to complete the restructuring plan that will enable the company to exit creditor protection on solid footing going forward.”
The agreements include a 10 per cent reduction in hourly rates along with adjustments to vacation, health benefits and work rules necessary to provide Catalyst with a competitive labour cost structure. The agreements also maintain hourly retiree health benefits. Annual savings in the range of $18 to $20 million are expected.
According to a letter from the CEP’s lawyer, the company’s creditor protection status does have in impact.
In response to questions from CEP members, the lawyer clarified that there is a stay of all legal actions against the company while they work out their affairs. The stay includes all arbitrations.
There are also potential impacts to pensions.
Catalyst may try to discontinue pension top-ups to employees age 55-59 under and enhanced package. The creditor protection status doesn’t require the company to cease the payments but its a possibility, the lawyer noted.
As well, employees who retire after age 55 are eligible for a bridging benefit from age 60-65.
Catalyst isn’t required to discontinue the benefit under creditor protection but it’s a possibility. “The issue is not whether the amount is “owed”, it is whether the person to whom it is owed has some priority so they can be certain to be paid,” the letter noted.