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Essar Algoma salaried employees are fed up. Lisa Dale is using the 's' word

Around the Sault's steel mill, if Local 2724 ain't happy, ain't nobody happy. And the Steelworkers Local 2724 president is so exasperated, she's talking about a strike
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FILE PHOTO: Steelworkers Local 2251 President Mike Da Prat and Local 2724 President Lisa Dale meet the press in February 2017. David Helwig/SooToday

Officially, they are the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union. 

The legal name is quite a mouthful. You know them simply as Steelworkers.

They're kind of a big thing around the Sault.

At Essar Steel Algoma Inc., the city's biggest employer, 95 per cent of employees are represented by two Steelworker locals: 2251 and 2724.

Local 2251 represents about 2,235 hourly workers: the people who do the heavy lifting around places like the blast furnace (2,710 degrees F), the ladle metallurgy furnace (1,580 to 1,730 F) and the direct strip production complex (1,519 to 1,570 F).

Local 2724 is exclusive bargaining agent for 470 salaried employees, including front-line supervisors and technical services staff such as metallurgists, chemists, engineers, financial and accounting workers and information technology specialists.

On the local labour relations scene, Local 2251 tends to play hardball.

Local 2724's game is more a high-level variant of noncompetitive winterball

"Historically, Local 2724 has had a productive and collaborative relationship with Algoma's management," says 2724 President Lisa Dale.

"Local 2724 has never gone on strike, and the parties have typically been able to resolve their differences through discussion and mutual agreement," Dale says in an affidavit sworn Thursday.

So around Essar Steel Algoma, if Lisa Dale isn't happy, it's a pretty safe bet that almost nobody's happy.

'It appears Algoma is done negotiating'

And in her latest submission to the Sault steelmaker's insolvency proceedings, Dale is definitely not a happy camper.

The collective agreement covering her workers expired on Mar. 31, 2016.

Employees continue to work under a statutory freeze that requires Algoma to continue applying terms of expired contracts for the two Steelworkers locals.

"It appears that Algoma is done negotiating with us, and wishes instead to impose... unilateral changes to the terms and conditions of employment of the union's employees, and/or to present a final offer for a vote by the membership," Dale advised the court.

"I am concerned that the steps being taken by Algoma may have a very negative effect on its ability to restructure and emerge from Companies' Creditors Arrangement Act (CCCA) protection."

"I do not believe that Local 2724 or Local 2251 members would tolerate a unilateral change in the terms and conditions of their employment, nor would they accept a final offer along the lines of what has been proposed to date."

The 's' word - strike

"I believe that, if Algoma chooses to proceed in this manner, there will be considerable pressure from the membership to call a strike vote, particularly if Local 2251 were to go on strike, which appears to me to be inevitable in such circumstances." Dale stated.

Dale's affidavit discloses that members of her local were starting to consider a strike early last year, when she said the steelmaker similarly tried to impose unnegotiated contract concessions through Ontario's Labour Relations Act process.

"A labour disruption of this magnitude – even the threat of one – could have a drastic impact on both Algoma's ongoing business and its efforts to restructure," she said in Thursday's affidavit.

"Further, if Algoma is seeking this relief as a means of pressuring the parties to make progress in their negotiations, a strike would have precisely the opposite effect. The Local 2724 bargaining team will not be able to spend any material time at the bargaining table if we are organizing our membership for the first strike in Local 2724's history."

Mobile workforce

Dale is also concerned that her members may jump ship in the event of a labour disruption.

"As I have stated in the past, in these uncertain times, I am concerned that a material number of Local 2724 members may begin to seek alternative employment. As professional and technical employees, the members of Local 2724 are a relatively mobile workforce."

Pensions remain an unresolved issue.

The Steelworkers' actuary reckons Algoma's three pension plans have 1,971 active members and 6,269 retirees and deferred vested members including spouses.

The wind-up deficit of the company's pensions is estimated at $494 million with additional annual payments of $106 million amortized over five years or $57 million over a decade.

All three plans are currently in deficit positions and are not guaranteed by Ontario's pension benefit guarantee fund because of changes made when Algoma restructured in 2002.

"The beneficiaries of the pension plans no longer have a safety net," Dale worries. "Therefore, a failure by Algoma to maintain payments to the pension plans is of even greater concern to the union's members than would normally be the case."

One thing everyone agrees on

There's one point on which both Algoma and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union concur.

It's time to get this thing wrapped up and move the Sault's steel mill out of insolvency protection.

"I agree that it's time to bring these proceedings to a close," Dale said in this week's affidavit.

The company is asking Ontario's Superior Court of Justice to allow collective bargaining talks to resume under Ontario's Labour Relations Act.

Dale sees a different solution.

She thinks the term lenders and senior noteholders who want to acquire Algoma "need to revisit their approach to ownership and bargaining."

If they can't do that, Dale says, they need accept that their bid isn't viable.

Instead, she hints, Essar Steel Algoma Inc. might need to re-open discussions with some previously rejected suitors.

People, she says, like Alan Kestenbaum from Bedrock Industries.

Or MAGA's Tom Clarke.

Dale says both remain interested in our steel mill.

Algoma's application to resume collective bargaining is expected to be heard on Jan. 25.