Recommendations from two provincially appointed special mediators have failed to quell the labour dispute between Federated Co-operatives Ltd. and the union representing its refinery employees.
On Sunday, Unifor Local 594 said it filed an unfair labour practice complaint with the Saskatchewan Labour Board in early March, alleging that Co-op undertook a “concerted campaign of psychological attacks on union members,” including following members to their homes and preventing workers from receiving benefits from their annual savings plan. The union also argued the company has “utterly abandon[ed] the bargaining process.”
The announcement comes days after Co-op tabled new pension concessions, calling it a “final offer.” Unifor Local 594 said in a press release the changes are a significant cut to the company’s pension responsibilities, going beyond what the mediators proposed in their March 19 report.
Co-op employees’ defined benefit pension plan is at the heart of the ongoing dispute. Historically, the plan was fully funded by Co-op, but the company said it wanted employees to begin paying 11 per cent of total contributions. It also wanted to reduce the benefit multiplier from two to 1.75 per cent and cut the indexing maximum for retirees from five to three per cent.
At present, the employer is paying about 23 per cent of each bargaining unit employees’ gross annual earnings to meet its obligation to fund the DB plan, according to the mediator’s report. In the previous round of collective bargaining, the parties agreed new employees would join a defined contribution plan. Under the new plan, Co-op would make a six per cent contribution and employees would contribute up to four per cent of their earnings. In addition, the company would be required to match employee contributions for a total combined contribution of up to 14 per cent of employees’ annual earnings.
In the last round of negotiations, the parties also agreed that current members of the bargaining unit would have the option to move from a DB to a DC plan. As an incentive to do so, Co-op offered to pay a retirement allowance to employees who make the switch. According to the employer, the retirement allowance was meant to compensate employees transitioning into the DC plan for loss of the bridging benefit available under the DB plan.
The mediators recommended that employees in the DB plan contribute up to eight per cent to the pension by February 2022. In addition, they said the accrual rate should be maintained at two per cent of final average earnings with no Canada Pension Plan-related reduction applied at age 65 — as presently exists in the DB plan — and that there should be no indexation on service after June 30, 2020. They also recommended that the consumer price index be capped at a maximum of two per cent for pre-July 1, 2020 service.
On March 23, Unifor said its members had voted 98 per cent in favour of the mediators’ recommendations, with Local 594 president Kevin Bittman calling them a “reasonable compromise that the company has little excuse to reject.”
However, on March 22, Co-op said it couldn’t accept the recommendations in full, noting it would need to make modifications “out of our responsibility to our employees, our co-op owners, our customers and the broader communities that depend on the long-term sustainability of the [company].”
The organization’s new proposal would see employees in the DB plan contributing eight per cent by February 2021, one year earlier than suggested, and for employees to share current services costs 50-50 by February 2022, which Unifor said would mean employees would contribute 11.7 per cent to the plan.
Co-op also proposed bringing back the 50 per cent CPP reduction at age 65, as well as reducing its contributions to the company savings plan by 2.5 per cent, to four per cent, for existing employees and closing the plan to any new hires. Those hires would instead be in the Co-op’s performance plan, which isn’t part of the collective bargaining agreement.
“Right from the beginning, we called for mediation to be binding, not a friendly suggestion for Co-op to ignore,” said Jerry Dias, Unifor national president, in the release. “The province must introduce legislation to end to this dispute and force this rogue employer to restore safe operation of Saskatchewan’s largest refinery.”
Co-op shared a summary of its proposal over Twitter on March 25. “Today, we have provided Unifor 594 a fair and final deal,” it wrote. “We encourage Unifor 594 to accept our final offer.”