Ontario cookie plant saved from closure

Union bargains buy-outs and buy-downs
By Zachary Pedersen
|Canadian Labour Reporter|Last Updated: 03/01/2011

Fewer than half of the employees at the Colonial Cookies plant in Kitchener, Ont. will be back to work at the end of the month, according to a deal reached Monday between workers and the company’s prospective new owners. Those who do return to work will see a pay cut of $1 to $2.

Workers have been out of work since December 2010 when the company did not resume production after the Christmas shutdown. Instead, it was placed in receivership in January 2011.

The prospective owners, Weston Foods Canada, were the only bidders for the plant, and have agreed to offer reduced-wage employment to only 100 to 150 of the original 370 employees. Senior staff will be offered a buy-out package and remaining staff who choose to leave the plant will be offered a “buy-down” option — a lump sum of money, up to a maximum, to make up for some of the pay that was lost during the shutdown.

United Food and Commercial Workers Local 175 representative Rob Nicholas told the Kitchener-Waterloo Record the “buy-down” option is better than what would be offered in severance under the Ontario Employment Standards Act. He also indicated that Weston will assume any pension liabilities.

The plant’s two-tier wage system had staff employed before 1996 earning around $17.50 an hour. The new deal will see this wage reduced to about $15.50 an hour. Staff hired after 1996 had been making around $14.38 an hour, but will now take home an average of $13.50 an hour.

An action centre is also being set up to help those who will not be returning to work with résumé writing, job searching and retraining opportunities.

Under the agreement of sale, Weston will pay approximately $13.5 million for Colonial’s assets; the deal should close by mid-March. The plant should resume production at the end of March.

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