Pension funding behind unrest at Co-op Refinery Complex
On December 3, 2019, 729 unionized workers at Regina’s Co-op Refinery Complex, an 800-acre site in the city’s northeast sector that produces up to 145,000 barrels per day, went on strike to protect what they saw as a challenge from management on their pensions. Two days later, workers were locked out of the facility after management determined their presence constituted a threat to safety. Non-unionized staff has been brought in to maintain production, a move that has angered Unifor Local 594 members who have since organized boycotts of Federated Co-operatives Limited (FCL) locations such as grocery stores, gas bars and cardlocks as well as convenience stores and car washes.
Unifor’s position is that it’s all about the integrity of their negotiated contract that ensures pension security for those who choose to remain in the Defined Benefits Pension Plan (DB). The stated goal for workers is to be able to choose whether or not a Defined Contribution Pension Plan (DC) or the DB option is the right way for workers to go and whether those who choose the DB plan will have their pensions protected.
Unifor points to statements from Federated Co-op’s executive vice-president, Vic Huard who is quoted as saying, “Every single employee who currently is in the Defined Benefits Plan will remain in that plan from now until when they retire.” They argue that the company is now reneging on this in a move that will cost workers money and pension security.
Federated Co-op has countered by saying that workers are being asked to make a choice. The first option asks unionized employees to contribute to their current Defined Benefits Pension Plan, as most employees enrolled in pension plans in Canada already do. The second option is to move to a Defined Contribution Pension Plan, which is the same as the one offered to management staff, whereby FCL contributes 10%.
Currently, FCL funds the entire DB for unionized workers. In the DC scenario, workers would see the company shell out as much as 14% of the costs, while workers paid the rest. Terms of the 2016 contract froze out new workers from the DB side and received agreement to continue full pension funding for its legacy employees.
Since the 2016 agreement was inked, Federated has had a second look at the DB option and suggests that the funding of this benefit places it in a competitive disadvantage with other refineries. They claim that the benefits are impacting profits and costing big dollars to members, as well as associated Co-operatives across Western Canada. They report that their unionized employees currently earn, on average, a base wage of $104,000 per year. With overtime, that increases to $123,000.
When the Defined Benefits Pension Plan and other benefits are factored in, the total average compensation rises to $172,000 per year. They also report they are offering an increase of 11.75% over four years to the employees’ base wage before overtime, pension and benefit considerations. And, FCL has offered workers access to the company’s performance plan that pays an annual incentive bonus based on the refinery’s performance.
The union has said no deal, citing 75 years of profits at FCL and a refinery that has made close to $3 billion in profit since 2016. They comment that the profits are the result of the skilled labour and their workers are entitled to a share in the form of continued DB pension plan contributions by FCL. Workers are now picketing retail locations and the union has been running a billboard campaign in cities across the West.
The Refinery Complex has also been the recipient of a blockade, where fuel trucks have been prevented from entering the plant. Videos that seek to ‘out’ replacement workers have also been hitting the Internet. On January 13, 2020, Unifor 594 blockaded the Prairie Sky Co-op’s Crossroads location in Weyburn. There, picketers permitted customers of the gas bar, cardlock and restaurant to come and go, but employees were only allowed in, making it difficult for the business. Other locations such as Winnipeg’s Pembina and Taylor gas bar, car wash and c-store have seen Unifor teams picket and distribute information as the strike moves toward a third month of action.
Octane editor Kelly Gray can be reached at email@example.com