Essar Steel Algoma may face its first strike in more than a quarter century after asking its hourly workers to accept a 10 per cent wage reduction and other concessions.
Terms of the company's negotiating position are being presented to members of the United Steelworkers Local 2251 at a series of emergency information meetings today at the Quattro Hotel and Conference Centre.
In addition to wage cuts, local president Michael Da Prat said that Essar Steel Algoma is also seeking elimination of cost of living increases and reduction of paid vacations.
According to Da Prat, the company has served notice that it may seek a no-board report and unilaterally impose contract terms some time around Feb. 20.
"If the company requests a no-board report, we have to take a strike vote," Da Prat told SooToday.
Essar Steel Algoma and its predecessor company Algoma Steel have had their share of fiscal misfortunes in recent years but have been remarkably free of labour disruptions.
The last strike was in 1990 when Algoma Steel workers were off the job for 110 days.
That disruption was serious enough that it persuaded then-owner Dofasco that providing further support to the Sault steelmaker would jeopardize its own viability.
The following year, Dofasco abandoned its interest in the Algoma mill, forcing it to seek protection from its creditors under the Companies' Creditors Arrangement Act (CCAA).
The operation now known as Essar Steel Algoma spent two other periods under CCAA insolvency protection: one in 2002, the other starting Nov. 9, 2015 and continuing until now.
The Steelworkers union is currently in contract talks with Essar Steel Algoma.
Last year, Local 2251 also signed a letter of intent to negotiate with Ontario Steel Investments Ltd., a new company set up by parent company Essar Global to acquire Essar Steel Algoma and U. S. Steel Canada Inc. steelworks in Hamilton and Nanticoke.
However, U. S. Steel Canada rejected Essar Global, saying it wasn’t qualified to bid for the Ontario steel properties.
Da Prat says Local 2251 is now unable to hold discussions with Essar Global.
“They won’t talk to us because of what happened in Hamilton, unless the [court-appointed insolvency] monitor provides agreement that we can talk to them. And the monitor has refused,” Da Prat told us.
As for talks with Essar Steel Algoma, Da Prat doesn’t believe the Sault-based company is bargaining in good faith.
“We’ve worked with the company on a number of CCAA proceedings. This is the first time that the company has treated us in the way they have, demanding these kind of concessions.”
“We’ve always tried to work things through. This time, it appears there’s no way through.”
Da Prat says Local 2251 gave the company notice to commence bargaining on May 3, 2016.
“Nothing was said to us and in fact when we requested that they be involved in some things they said, no, it was inappropriate, because they could not do anything that could bind the new owners.”
“Out of the blue, on Jan. 9, they’re claiming that the notice to bargain was made in 2016 and it’s still in effect.”
That opens the door for Essar Algoma to request a no-board report, indicating a failure to resolve differences between the parties.
“Once the no-board report is issued, there are 14 days before the company can lock out, the union can strike, or there could be terms imposed unilaterally by the company,” Da Prat said.
The company has advised that it wishes to impose unilateral contract terms on its Sault workers on or about Feb. 20, he said.
“Management needs to act responsibly. It’s wintertime. They are the ones that are initiating this course of action. They’re saying either give us what we want or we’re going to impose them. And the timeline is so tight that it’s predetermined.”
Da Prat described reaction to the concession proposals among union members at today’s information sessions as “not good.”
“Once the no-board report is issued, we will definitely be calling a vote. Now, we have to put in motion all those issues and practices that are required for a strike.”
“Under normal conditions, the notice is given three months in advance of the collective agreement expiring. There’s time to do these things. Right now, the timeline is so tight that we have to start right away.”
Da Prat says that any decision to strike will be made by the rank-and-file of Local 2251 in a vote by secret ballot.