Companies challenging protection given to bargaining unit work by re-employing retirees
Intergenerational conflict is brewing in Canadian workplaces as more pensioners are supplementing their incomes by returning to work for their former employers.
The use of retired employees as contract workers by U.S. Steel in Hamilton is another example of a corporation “dictating” the terms of the workplace while “blatantly disregarding” a negotiated collective agreement, according to Rolf Gerstenberger, president of United Steelworkers (USW) Local 1005.
In April, the company let 46 workers go and, at the same time, hired 50 retired workers on contract, he says, noting 11 employees on layoff have since been called back.
The laid-off employees worked in the plant’s production area, which is not currently operating, while the retirees are working in the finishing end where there is a shortage of workers, Gerstenberger says.
Previous collective agreements have included a letter of understanding allowing U.S. Steel to hire retirees to train younger workers but this is a different scenario because none of the laid-off workers are being trained, he says. The union withdrew the letter of understanding earlier this year.
“They should be calling back those on layoff and training them in that area,” he says. “Our view is that the way things are going, there never should have been layoffs. It’s short-sighted. How long will the company keep retired salaried employees there?”
This latest hiring move raises doubts about the future of U.S. Steel and puts the union in a difficult situation in future collective bargaining, Gerstenberger says. The current agreement, reached last fall following a lengthy lockout, expires in 2014. It removed pension indexing and closed off pensions to new hires.
This could “incite” retirees and those nearing retirement to turn their backs on the union, he says, adding the 50 retired workers under contract will “have to look elsewhere for help” if they run into problems with the company.
“People are not very happy,” Gerstenberger says.
U.S. Steel did not return calls. However, a spokesperson has said in the past the company “fundamentally disagrees” with the characterization of Local 1005 on this matter.
The issue of hiring retirees on contract is something other unions are also facing more frequently, including Canadian Office and Professional Employees Union (COPE) Local 378.
Last fall, it successfully challenged a move by Fortis B.C. Inc. to hire two former employees into the same jobs from which they retired. The arbitrator agreed with the union’s position they were doing work that could only be assigned to those in the bargaining unit.
However, the union says the decision was only a partial victory.
Employers may be tempted to look at the decision as a blueprint for how to get through loopholes in the collective agreement in future, says Local 378 representative Kevin Smyth.
“So maybe I won’t bring them into the building, but I’ll do it again in another building,” he says. “Or I won’t give them access fobs, schedules or a supervisor — all of these indicators of employee status.”
The other part of the issue is dealing with the retired union members themselves, Smyth says.
Although pensions were initially designed to encourage older workers to leave and make way for younger employees, that’s not what’s happening.
“If we were less successful with our pensions and benefits, we wouldn’t be having this problem,” he says. “We’ve got this bubble of people around 55 years old with 25 years of service. They’re looking at their pensions and realizing their time is becoming less valuable so they retire and come back as a contractor at a higher rate.”
This issue will “flavour” the next round of negotiations, with COPE asking for more firm language on contracting out, Smyth says, adding there is mounting frustration among current workers.
“The members were really hot under the collar on this one,” he says. “We (union executives) are looking at the legal issues but the members don’t care. They just see this jerk here who was a member for 25 years and is now back as a vampire.”
While neither COPE nor USW have concerns about physical harm, a situation involving threats toward a retired railway worker in Saskatoon in 2007 led to the firing — and eventual reinstatement — of another union member.
In that case, the use of retirees was sanctioned by the union during the previous negotiations. It was seen as a way to cut down on weekend work and to improve the work-life balance of hourly employees.
However, in the workplace, it was not perceived in such a positive light.
