Employees of Canfor in British Columbia who are represented by the United Steelworkers are pitching in to help the company out.
A tentative agreement now out for ratification would permit employees to “invest” in the company, but this investment will be in terms of an interest-free loan to the company and not in stock ownership.
The investment will be made up of three percentage points of vacation pay above Employment Standards Act minimum, vacation pay accrued on vacation pay, floating holiday pay and statutory holiday pay for Boxing Day. It is being defended as an alternative to wage rollbacks.
The investment will continue until the earlier of December 31, 2011 and the date the average price of 1,000 board feet of 2X4s over a six-month period reaches $300.
The payback schedule for the money is 25 per cent when the company’s Return on Capital Employed (ROCE) in a quarter is three per cent, increasing by five percentage points of repayment for each one percentage point increase in ROCE to a maximum of 50 per cent of investment for a quarter with an eight per cent ROCE.
Though he called the deal “unique and innovative,” USW Wood Council chair Bob Matters admitted to a local TV station that it was “very difficult for us.” He also suggested it would be a template for other negotiations in the northern and southern interior of British Columbia.
Other highlights of the agreement include seniority retention during the term of the agreement for all employees who were on the recall list on July 1, 2009. In the event of plant closure, severance of two weeks’ pay per year of service is available. New hires during the term of the agreement will be paid 75 per cent of the job rate for the first six months. There will be wage increases of two per cent in the third and fourth year, after a wage freeze in the first two years.
Once the investment is repaid, a profit-sharing plan will be activated. It will provide $140 per employee in any quarter where ROCE is 3.0 per cent, increasing to a maximum of $444 when the ROCE is nine per cent.
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