Pulp, Paper and Woodworkers of Canada union members at Crofton’s mill have accepted a new tentative agreement.
PPWC Local 2 members voted 55 per cent in favour of the new contract offer with Catalyst.
The five-year contract goes into effect on May 1.
The local, which represents approximately 380 employees at the local mill, had previously rejected a contract offer that had been crucial to Catalyst Paper’s financial restructuring, which Catalyst bosses said contributed to the firm having to apply for creditor protection.
And in addition to the PPWC members, Catalyst has also reached five-year labour agreements with five CEP locals representing 700 employees at three mills.
Combined, the agreements mean a 10-per-cent reduction in hourly rates, along with various adjustments to vacation, health benefits and work rules, and annual savings in the range of $18 to $20 million.
“There are some differences (between the rejected and the approved contract) but basically it’s still a concessionary offer,” Local 2 president Paul Zarry said on Monday.
The major difference this time around, of course, is Catalyst’s move into creditor protection.
“The last scenario you want to have is the mill going down, and from my perspective, the most important thing is maintaining the work for my members,” said Zarry. “And the spin-off effect from the failure of this company means huge devastation for all our communities.
“That’s what the membership had to weigh. I believed this was the last kick at the can to be able to do that.”
Still, Zarry said it’s not an ideal scenario either way and added there’s still no guarantee of employment at the mill.
“We weren’t the sole rejectors (of the previous offer) — there were a group of bondholders that weren’t on board, too,” he said.
“There are a still a couple of unsecured bond holders that need to agree to this for the plan of arrangement to go forward. It’s not up to the unions, or the company. It takes all of them to come to that agreement.”
Catalyst spokeswoman Lyn Brown noted the new labour agreements are crucial in the company’s successful restructuring.
“I think it’s important to recognize that everyone who voted in support of the new agreements is helping our company reposition, and that’s helping save jobs and keep mills running,” she said.
“That’s an enormously important step and an enormously important signal to our customers, who are depending on us to continue to deliver to them on time and in quality.
“We also appreciate this decision was not taken lightly by any involved in the process,” Brown added. “It’s an important step that will support our efforts to emerge from creditor protection on a stronger footing.”
Catalyst CEO Kevin Clarke added in a media release: “We appreciate there is still an enormous amount of work to do to complete the restructuring plan that will enable the company to exit creditor protection on solid footing going forward.”
Catalyst announced last week it had entered into an agreement under the Companies’ Creditors Arrangement Act, which it believes will address current debt plus preserve jobs and business.
“The proposed plan of arrangement provides the opportunity to reposition Catalyst Paper for the future at this very challenging time for the entire paper and pulp industry,” Clarke said.
“There are many interested parties involved and we are continuing to work hard to address the requirements that will enable us to finalize this transaction in a timely and effective manner.”