A complicated merger

As part of its ongoing reorganization, Essar Steel in Sault Ste. Marie, Ont., eliminated and recreated a number of positions — a move well within their rights, an arbitrator has decided.

But the United Steelworkers (USW) local 2251 disagreed, launching a grievance in which they claimed the company violated the collective agreement.

The case began when Essar Steel decentralized a certain number of fitter/welder positions by posting a number of department-specific fitter/welder jobs and eliminating the original positions.

The relationship between Essar and USW is a complicated one, involving a number of union mergers and the company's bankruptcy.

In 1995, employees signed a collective agreement which included them as partial owners of the company as well as a new management rights clause dictating the plant’s operations would be "jointly administered."

That came to an end in 2004, and the most recent collective agreement reflects the fact that employees are no longer involved in ownership over Essar.

If nothing else, arbitrator John Stout noted, previous collective agreements serve as a testament to the unique and mature bargaining relationship. However, when Essar Steel decentralized the 87 jobs, it was to put accountability along with required resources in the hands of the operating departments. As well, the company indicated the new structure would improve health and safety.

The 87 fitter/welder positions were posted, but qualifications were listed as "nil" and each of the 87 workers successfully applied for the jobs, but not without adding they signed "under duress."

According to the USW, the company did not create new jobs, but instead reassigned the same employees to perform the same work they had always done, just within a different department. The move had an adverse affect on employees’ seniority rights. Though the USW agreed management had the right to assign and reassign workers as they please, it did not have the right to circumvent seniority lists pertaining to vacations, days off and preferred schedules.

But Essar Steel maintained the management rights provision gave it the power to create new department-specific jobs.

As it currently stands, the collective agreement outlines job swapping. When an existing job is changed or a new job established affecting job seniority lists, the company and union will develop a new seniority list together.

In his decision, Stout sided with Essar Steel, saying the company was within its rights when it created the new jobs. The main focus of the decentralization was to put accountability and resources within operating departments, which eliminated inefficiencies and problems under the old structure.

"Language cannot be examined in isolation. Rather, language must be interpreted in light of other provisions in the collective agreement," Stout said, adding that while this particular management rights clause was broadly worded, the collective agreement had additional provisions pertaining to new jobs and seniority lists.

"In this case, the reorganization did not involve layoffs or eliminating any positions. Rather, the company chose to redeploy employees to specific departments performing more specialized jobs," Stout continued.

Although the 87 workers were permitted to exercise seniority rights from the master or intermingled lists, the situation was not as dire as the union claimed.

"There is no doubt that some employees may lose some opportunities based on seniority. However, they are not left without recourse as the collective agreement specifically contemplates situations where reorganization may affect job seniority lists for existing jobs. Scheduling, including vacation and overtime, will be affected by the reorganization. However, that is not much different than the affect of any reorganization upon affected employees who may have to exercise their seniority rights to bump to different positions," he said.