The Essar Steel Algoma union (Local 2724) which represents approximately 600 field supervisors and technical support staff have agreed to take a mediator's contract proposal (mediator's recommendation) to their membership for a vote. If the membership agrees a strike at Algoma will be averted. Failure to ratify will result in a strike by local 2724. However, the hourly workers which just ratified their contract would be required to cross the picket line and work.

Here is how the information has been flowing over the past 24 hours or so:

Essar Steel Algoma and the union which represents approximately 600 supervisions and technical staff (USW Local 2724) have agreed to take the mediator’s recommendation to settle to their principals and membership for ratification.

SMU is not an expert in labor laws or negotiations so we asked Essar Steel Algoma to explain what the “mediator’s recommendation” means and here is their response:

“A mediator’s recommendation to settle is a document (Memorandum of Settlement) that the mediator believes is the best settlement possible without a strike. The final document differs somewhat from that posted on the Company blog on July 29, 2:35 pm. We understand L2724 will take this document to their membership for a ratification vote today and tomorrow. We are hopeful that the mediator’s recommendation to settle will be ratified.”

According to information on the Essar website (blog), “Should this mediator’s recommendation to settle fail to be ratified by midnight July 31, 2010 it shall be rendered null and void.” In other words, the Company has agreed in principle to accept the terms and conditions of the mediator’s recommendations. Those recommendations are not necessarily the same as those posted on the Essar blog and re-printed below. If the vote by the union members fails to accept the mediator’s recommendations there will most likely be a strike by Local 2724.

Here are the terms and conditions Essar Steel Algoma last posted on July 29th:

At 2 pm today the Company presented a settlement offer to the bargaining committee for USW Local 2724. This offer affects all USW 2724 and includes some certain provisions specific only to Front Line Supervisors (FLS).

This settlement offer includes some changes from the offer we shared with you yesterday.

THIS HAS NOT CHANGED

For all USW 2724 members:

•

3.5 % wage increase over three years, • Continuing COLA rolled in quarterly throughout the life of the agreement, • Extending the pension windows, • Introducing a defined contribution pension plan for new hires, • Increasing the shift premium and boot allowance, and • Improvements to extended health benefits.

For the FLS’ only:

• A one-time salary increase of 5% for all FLS in operating and maintenance roles, • Two additional “C” days for all FLS, • Giving FLS the right to receive the special discretionary bonus provided to exempt staff, and • At the Company’s discretion improved health care benefits to FLS.

These FLS’ only improvements are in recognition of the following changes to FLS only:

• Enhancing the Company’s ability to fully utilize each FLS’ talent and abilities to maximize operational and succession planning goals, • Providing that FLS may not serve in a formal union capacity due to the legally recognized inherent conflict of interest between union and management responsibilities, and

THIS HAS CHANGED

For FLS’ only:

Overtime compensation will be paid when the 8 hours between 40 and 48 are worked consecutively. In the event that they are not worked consecutively there is no overtime up to 48 hours worked in a week, and for hours worked beyond 48 in a week, “C” time or overtime will be paid at the option of the FLS.

Before any FLS’ employment is terminated, the decision must be reviewed and approved by the department Vice President, the Vice President Human Resources, the Vice President Legal and the Chief Executive Officer. In the case of dismissal without just cause, an FLS will receive either severance of up to 18 months salary or may be reassigned by the Company to an alternate position in ESSAR Steel Algoma.

For all of USW 2724:

A contract term of 2.5 years, with a proposed expiry of January 31, 2013. We do not have the ability to stop and restart our operations and therefore need to take measures to ensure the preservation of the assets so that in the event of a labour disruption there is a business to go back to. A 2.5 year term ensures that at minimum the integrity of the assets will always be preserved in the event of a labour dispute with either union local.

We don’t want a strike. But we require change.

The fact remains that the Company needs to be competitive. The steel business has changed and will continue to change and ESSAR Steel Algoma needs to be able to adapt to these changes so we can be competitive.

This settlement offer is the best balance between achieving that competitiveness and recognizing the role our employees play in the organization. Posted by ESSAR! at 2:35 PM

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