Judge orders unions and Algoma back to the table

A judge has ordered Algoma and its consenting creditors and the unions representing the majority of the steelmaker’s employees back to the table.

Judge J. Hainey has ordered that negotiations between the Steelworkers unions 2251 and 2724 resume as soon as possible and that mediator Warren Winkler be available to assist in the process as necessary.

Winkler has also been instructed to keep Hainey informed as to the progress of negotiations.

If the judge does not see progress being made, the parties have been informed that their lawyers should be prepared to address “the full range of options” available to the court to resolve the problems.

Earlier this month Algoma Inc. and its consenting creditors filed a motion with the courts asking a judge to lift a stay of proceedings to allow collective bargaining efforts with its unions to resume.

The company argued that the order to resume negotiations and secure collective agreements with the unions is necessary in order to bring Algoma's Companies Creditors Arrangement Act (CCAA) proceedings to a close and complete the asset purchase agreement.

Timing, the company argues, is imperative and an agreement must be reached before the provincial government rises for the spring election.

"Consenting creditors have reached a confidential agreement in principle with the City of Sault Ste. Marie and are optimistic that agreements with the Province of Ontario and the federal government with respect to capital expenditure programs and environmental issues will be finalized on a timely basis," the 13 page motion reads.

Algoma Inc. has been under CCAA protection for more than 26 months and the operation is vital to the community as the city’s economic engine, Hainey reports in his decision.

“The complete lack of progress of these labour negotiations is entirely unacceptable to the court. As the CCAA supervising judge I have an obligation to protect Algoma’s value and the interests of all of the stakeholders, particularly Algoma’s employees and the community of Sault Ste. Marie,” the decision reads. “These non-productive labour negotiations cannot continue. The lack of progress is directly contrary to the interests of all of the company’s stakeholders.”

He also noted that the City of Sault Ste. Marie’s lawyer also expressed concern about the current deadlock in the negotiations.

“In my view, the city’s concerns are well-founded,” Hainey wrote.

As a result of a stalemate between the parties last year, mediation was ordered but deemed unsuccessful.

Further attempts to negotiate between the two parties since last March have also been unsuccessful.

The unions argue that lifting the labour stay could result in the issuance of a no-board report and launch a work stoppage at Algoma. They also argue that a work stoppage would be detrimental because the facilities at the steelmaker do not have independent heating and rely on the heat given off during the steel manufacturing process.

In addition, a work stoppage would divert the union’s attention to its organizing efforts and prevent further negotiations from continuing.

The consenting creditors have reached a confidential agreement in principle with the City of Sault Ste. Marie. Similar agreements pertaining to other issues under the province’s jurisdiction like environmental issues, capital expenditure programs and amendments to pension funding are also nearing conclusion but final agreements can’t be made until contract negotiations are also finalized.

Mike DaPrat, president of Local 2251 said the union will follow the judge’s order and get back to the table in the hopes of getting a fair agreement signed for its members.

“We’ve proven we’re ready to reach an agreement that’s fair to our workers but health and safety is paramount and that’s the issue,” DaPrat said when contacted late Friday by The Sault Star.

He said Local 2251 had support agreements with three other parties, none of which had an issue with the health and safety manual included in the collective agreement.

“This is very important to us. We’ll go back and meet with them but it may be that the court will have to make a decision,” he said.

Local 2724 president Lisa Dale refused comment.

Mayor Christian Provenzano said he believes the judge is concerned that negotiations haven’t progressed.

“That’s a legitimate concern and from his decision, he clearly expects them to get together and enter into some meaningful negotiations,” Provenzano said.

Provenzano said the mediator, Winkler, is a competent and capable person whom he hopes will help the parties find some common ground.

“There are significant and legitimate concerns with this time line. A lot of work has been done with the provincial government on issues of environmental liability, capital investments and pensions and when you have that commitment from the province and an election is approaching, you run a risk,” Provenzano said.

If a new government is formed by another party, it takes time to get the staff in place and familiar with the issues.

“It’s like starting over,” Provenzano said.

Even if the same government were to be elected, it may take less time to reopen the files, but time where Algoma can’t emerge from CCAA, he said.

“This process is costing millions of dollars and that is money that is profits being filtered from Algoma that can’t be put away for a rainy day when the markets are not as good,” Provenzano said.

Algoma filed for CCAA protection in November 2015.