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November 7th, 2009
- General
Hamilton Ontario - U.S. Steel recalls 63 workers.
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It sounds like good news but the Stelco Union sees the move as a bid to bypass severance payments for its Nanticoke employees. Labor relations have historically been bad at Stelco, a company that grew fat and complacent behind a tariff wall and where the Union resorted to extortion tactics to achieve contracts that were the envy of Canadian workers. Anyone that is familiar with steel making would agree the workers were worth every penny they made. The problem was not labor cost as nearby Dofasco paid the same salary and benefits. What made the wheels fall off the cart was the “them versus us” attitude between management and labor. As profit dwindled Stelco piled on debt. The Ontario government stepped in and bailed the bankers out. U.S. Steel saw an opportunity to acquire Stelco’s Lake Erie plant, one of North Americas most modern flat steel facilities built to supply the auto industry. Now US Steel are stuck with a plant they need like a hole in the head, legislation that calls for a costly severance package, and a Canadian government that expects US Steel to live up to its contractual obligation to keep the plant operating. The Hamilton spectator had an article this week that we would like to highlight.
U.S. Steel will bus 63 laid-off steelworkers from Nanticoke to Hamilton this morning in a bid to avoid paying millions in permanent severance, union leaders say. The workers were laid off from the pickling lines at U.S. Steel's Lake Erie plant in March, when the firm shut down its Canadian operations.
Under the Employment Standards Act, companies must offer permanent severance to employees who are laid off for 35 weeks. "We're coming up to that point now," said Rob Newstead, unit chair for the employees.
"We asked if they were doing this to avoid severance and they said, 'Yes.' Point-blank."
Without a recall, U.S. Steel would have to pay one week's severance for each year of employee service, or about $30,000 to $34,000 per worker, said Newstead.
The recall will probably only last 17 weeks, long enough to satisfy requirements under Ontario labour law, he added.
"They're hoping it'll be longer, but that's what we've been told to expect."
Newstead believes it's likely that after 17 weeks, they would be laid off and left to rely on employment insurance again.
The employees -- who usually treat steel headed for finishing lines -- will work four 10-hour shifts a week in Hamilton, performing general labour including maintenance and janitorial duties.
"They're stuck between a rock and a hard place," said Bill Ferguson, president of the United Steelworkers Local 8782 representing workers at U.S. Steel's Lake Erie plant. "If they turn it down, their (employment insurance) will run out and they may be without a job."
The workers joined U.S. Steel in 2008, shortly after the Pittsburgh steelmaker bought their employer, Nelson Steel. Though they are members of the United Steelworkers Local 8782, they are protected by a separate labor agreement.
The 1,000 laid-off workers at the Lake Erie plant have been locked out by U.S. Steel since August, when talks for a new labor contract failed.
"We would have been at 35 weeks on Nov. 11," Ferguson said. "The clock stopped on the 35 weeks when they locked us out."
U.S. Steel began cutting Hamilton workers last November, shortly after it shut down its blast furnace due to slumping demand. It resumed production at its Hamilton plant in July, just as the first group of laid-off workers approached their 35-week deadline.
U.S. Steel is embroiled in a Federal Court battle with the Canadian government over the shutdown of the former Stelco.
Industry Minister Tony Clement says the move violated commitments the company made under the Investment Canada Act when it bought the Hamilton and Nanticoke plants in 2007.
U.S. Steel declined to comment.
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