Vale workers in Ontario vote to approve new contract at former Inco operations

By The Canadian Press

http://ca.news.finance.yahoo.com/print/s/08072010/2/biz-finance-vale-workers-ontario-vote-approve-new-contract-former.html

SUDBURY, Ont. - Workers at international mining giant Vale in Ontario have approved a new labour agreement, ending a year-long strike.

"Our members have spoken and I believe everyone respects the decisions they have made in extremely difficult circumstances," said Wayne Fraser, the United Steelworkers' district director for Ontario and Atlantic Canada.

"For the last 12 months our members have stood together in the face of incredible adversity," Fraser said. "They demonstrated tremendous character and they can hold their heads high as they return to work."

Workers at Steelworkers Local 6500 in Sudbury voted 75 per cent in favour of the proposal, while Steelworkers Local 6200 in Port Colborne voted 74 per cent in favour of the deal.

"We are very pleased that our production and maintenance employees have ratified these new collective agreements and we look forward to their return to work and a resumption of normal operations," said John Pollesel, general manager of Vale's Ontario operations.

"It's been a long, hard year for everyone involved, and it's now time to come together and focus on building the strong and sustainable operations that Sudbury and Port Colborne require."

The strike at the former Inco Ltd. began on July 13, 2009, and was markedly bitter at times, with the union accusing the Vale of bad faith bargaining and the company taking the union to court over a variety of alleged incidents on the picket lines.

Vale said it needed to cut labour costs to keep its operations competitive, but workers argued the Brazilian company makes billions of dollars a year and doesn't need concessions from workers.

The company raised the ire of workers when it used non-striking office, clerical and technical employees as well as replacement workers to restart some operations during the strike. Despite this, the output from Vale's Canadian operations — which account for more than 10 per cent of the world's nickel mine supply — has been significantly lower than normal for the past year.

The agreement will see more than 3,000 workers get a raise and a big signing bonus.

However, it will also see new employees put on a defined-contribution pension plan, as opposed to the existing defined-benefit plan. Defined-contribution plans depend on market returns and don't guarantee a steady income the way defined-benefit plans do.

To offset this, existing workers under the current defined-benefit plan will get a boost in their post-retirement income, and the existing long-term disability plan will also be improved.

Workers will get incremental raises totalling an estimated $2.46 an hour by 2014, and will receive a back-to-work bonus of $2,000, plus another $2,000 if production reaches 95 per cent of its maximum for 42 days within six months of ratification.

The new contract will also raise the price at which the nickel bonus kicks in to US$3.75 a pound from the current level of $2.25 a pound, and it will cap the nickel bonus at 25 per cent of workers' wages. The concession means workers making $29.40 an hour could earn a maximum annual bonus of $15,288.

Vale says it intends to eliminate 113 of the more than 3,000 people who worked for the company's Sudbury operations before the strike, but it is hopeful that number will be covered by retirements and workers who quit over the past year.

All employees will be back at work within six weeks, and both sides will drop lawsuits launched during the strike.

Brazil-based Vale acquired Inco Ltd. for $19 billion in 2006 and recently dropped the "Inco" from its name.

This was the longest strike at the Sudbury operations in their century-long history, exceeding a lengthy 1978-79 dispute by about three months. It has raised questions of the responsibilities foreign companies take on when they acquire Canadian assets.

About 200 striking employees at a mine in Voisey's Bay, N.L., have not yet reached an agreement.

Vale's Canadian operations include six nickel mines, a mill, a smelter and a refinery in Sudbury; a refinery in Port Colborne; a nickel-cobalt-copper mine in Voisey's Bay; and three nickel mines, a mill, a smelter and a refinery in Thompson, Man.

Vale has more than 100,000 employees around the world and is a global leader in the production of iron ore pellets, aluminum, coal, nickel, copper, steel and other resources.