Safeguards needed for laid-off workers

Lana
Lana Payne
Send to a friend

Send this article to a friend.

For the workers and their families, it was like a stake in the heart.
The blows keep coming for the hundreds of central Newfoundland forestry and mill workers who have been caught up in the high-stakes gamble of a corporate giant that got too big too fast, made too many bad decisions, took on too much debt and bet heavily on a newsprint industry that was in a downward spiral.
Just days after being thrown out of work by their papermaking boss, hundreds of Grand Falls-Windsor workers received the news that millions of dollars owed to them in severance would not be paid and might never be paid in full by their former employer, AbitibiBowater.

For the workers and their families, it was like a stake in the heart.

The blows keep coming for the hundreds of central Newfoundland forestry and mill workers who have been caught up in the high-stakes gamble of a corporate giant that got too big too fast, made too many bad decisions, took on too much debt and bet heavily on a newsprint industry that was in a downward spiral.


Just days after being thrown out of work by their papermaking boss, hundreds of Grand Falls-Windsor workers received the news that millions of dollars owed to them in severance would not be paid and might never be paid in full by their former employer, AbitibiBowater.

That decision is now in the hands of a bankruptcy judge, forcing their union to fight for the workers' money in court.

But there are no guarantees. Moneys owed to workers - such as severance, termination or unpaid vacation - are often unsecured debts, unlike bank debt and loans. And this company owes a lot - reports in business journals peg the debt at more than US $6 billion.

AbitibiBowater's financial woes are not just because newsprint markets are tanking.

The company's dire straits are also a result of a few bad management decisions.

At the top of the list is the 2007 merger between Canadian-owned Abitibi Consolidated and U.S.-based Bowater. Both brought a pile of debt to the merger.

The two paper companies had sought to control the newsprint market by putting their rivalry behind them and joining forces to cut supply and in turn, boost newsprint prices.

But it was a gamble from the beginning - a gamble that today has some pretty hefty consequences for the company's more than 11,000 workers across Canada, their families and communities, most in the province of Quebec.

And despite the carnage, the debt, the layoffs, AbitibiBowater lawyers still had the nerve to tell the courts that the 2007 merger has been successful and the goal was to get through the restructuring with "as little collateral damage as can be managed."

Damage is already here

The workers in this province are already collateral damage and it appears, before all is said and done, that thousands of other Canadian workers will find themselves in the same boat as the corporation shuts down even more Canadian mills.

According to some newspaper reports, the company's list of creditors filed in U.S. bankruptcy court was 2,500 pages long and contained more than 60,000 creditors.

Among those owed money are the Abitibi workers in this province.

The current recession has highlighted the total failure of the many of the economic policies touted in the last two decades - policies like deregulated financial and labour markets, privatization and unchecked globalization.

And what has become glaringly obvious is there is very little protection for the working people who did not cause this recession. But they are being blamed for it nonetheless as government and corporate leaders try to shift responsibility for the crisis to wages and benefits rather than take responsibility for their inaction and greed.

This deficit of responsibility and real action will only serve to bolster disenfranchisement with the federal government and its role in not just the economy, but in our lives.


The AbitibiBowater situation has also highlighted the lack of safeguards for working people such as severance and wage-earner protection programs or pension guarantees.

The labour movement, after many years of advocacy, managed to get the federal government to implement and include severance pay in a wage-earner protection program, which applies in cases of bankruptcies or receiverships.

But the total amount of moneys a worker can recover remains at just over $3,000.

Some Abitibi workers are owed 10 and 20 times that in severance pay, which is little more than deferred wages - moneys that were negotiated by their union to help bridge the gap in the event of a layoff.


Provincially, there is no such severance or wage-earner protection. In fact, there is no onus on companies to even pay severance under provincial law unless it has been negotiated in a collective agreement or promised in writing by an employer.

Newfoundland and Labrador's labour laws need a makeover. Working people do not have the protection they deserve, leaving them vulnerable when companies walk away or kick them to the curb.

Perhaps this recession will do more than highlight the tattered worker safety.

Perhaps some progressivethinking governments will see this as an opportunity to repair the safety net and end a quarter-century attack on unions and their ability to provide a counterbalance to corporate power.

Lana Payne is president of the Newfoundland and Labrador Federation of Labour. She can be reached by e-mail at lanapayne@nl.rogers.com. Her column returns May 9.

Organizations: AbitibiBowater, Abitibi Consolidated, Bowater Newfoundland and Labrador Federation of Labour

Geographic location: Newfoundland and Labrador, U.S., Abitibi Canada Province of Quebec

  • 1
  • 2
  • 3
  • 4
  • 5

Thanks for voting!

Top of page

Comments

Comments

Recent comments

  • Andrea
    July 02, 2010 - 13:23

    Lana my dear it was the Union who helped create this mess in the first place. No concessions no talks nothing and now no mill. AB wanted to make cuts in an effort to save the mill but the union said NO we want everything. Now they have nothing. Look in the mirror Gary Healey theres the problem YOU.

  • Beatrice
    July 02, 2010 - 13:22

    Oh Lana Ha Ha Ha will youn ever grow up girl

  • Eugene
    July 02, 2010 - 13:09

    I have to agree completely with you this week, Lana. It shouldn't be the government's responsibility to constantly pick clean up the human detritus of late-capitalism's failures; the government should be regulating these operations so that workers are considered more than just an item in the accounting cycle to be whiddled down and out-sourced. Unfortunately, the vast majority of workers are not protected by any collective agreements and the labour movement needs to start protecting more workers rights, not just those who are unionized. We need to (as a collective) start looking at Scandanavian models that see government, labour AND business acknowledging their common interests in keeping society functioning and the populace happy. Unfortunately the cards are stacked heavily against workers in North America with governments largely on the business side applauding the 'efficiencies' that have largely been borne out of workers' losses.

  • Andrea
    July 01, 2010 - 20:08

    Lana my dear it was the Union who helped create this mess in the first place. No concessions no talks nothing and now no mill. AB wanted to make cuts in an effort to save the mill but the union said NO we want everything. Now they have nothing. Look in the mirror Gary Healey theres the problem YOU.

  • Beatrice
    July 01, 2010 - 20:06

    Oh Lana Ha Ha Ha will youn ever grow up girl

  • Eugene
    July 01, 2010 - 19:44

    I have to agree completely with you this week, Lana. It shouldn't be the government's responsibility to constantly pick clean up the human detritus of late-capitalism's failures; the government should be regulating these operations so that workers are considered more than just an item in the accounting cycle to be whiddled down and out-sourced. Unfortunately, the vast majority of workers are not protected by any collective agreements and the labour movement needs to start protecting more workers rights, not just those who are unionized. We need to (as a collective) start looking at Scandanavian models that see government, labour AND business acknowledging their common interests in keeping society functioning and the populace happy. Unfortunately the cards are stacked heavily against workers in North America with governments largely on the business side applauding the 'efficiencies' that have largely been borne out of workers' losses.