When AbitibiBowater workers are laid off in March, they will get severance pay packages - or will they?
Politicians and employees are wondering if the workers will still receive their severance if the paper giant files for bankruptcy.
The issue was raised in the House of Assembly earlier this week, when both the Tories and the Opposition noted that bankruptcy was a real possibility, giving the current global economic climate and the decreasing demand for newsprint.
"Back in March of this year, AbitibiBowater sold almost $500 million in bonds in an attempt to restructure a $1.4 billion corporate debt," said Liberal leader Yvonne Jones. "At that time there was some speculation as to whether the corporation would be able to repay its creditors or if they would be forced into a bankruptcy position. Now we have seen the stock in this company fall from $26.13 down to ...41 cents."
She asked what would be the impact on the workers' severance pay and their pension plans, and if there are safeguards in their contract to protect those people if AbitibiBowater claims bankruptcy.
Shawn Skinner, the minister for Innovation, Trade and Rural Development - and a member of the ministerial task force to handle the AbitibiBowater affair, didn't have a clear answer to the severance issue. However, he told the House that government is looking at options regarding the employees' rights to make sure that everyone is covered.
He later told the Advertiser that issues related to workers' severance and pension plans in relation to possible bankruptcy are best directed to the unions.
"Such matters are directly related to collective agreements," he said.
But Minister Skinner also stated in the House that AbitibiBowater may bounce back and become a "very profitable and productive" company.
"They are still operating and we will monitor the situation as we have done to ensure that our rights as a government and the rights of the people who work with Abitibi, who are residents of this province, are protected," he said.
"Speculation can be a dangerous thing. So, I am not going to propose to enter into a debate about what other people are speculating is going to happen or is not going to happen to Abitibi. What I will say is that this government is very much engaged in the process...We will look at the options as they present themselves to us. We have alternatives that we are looking at and as we need to play our cards, we will play them."
Gary Healey is the national representative for the Communications, Energy and Paper Workers union (CEP).
While he said that the meeting union leaders had with Minister Dunderdale this past Tuesday was "great" and informative, he was less than forthcoming about the issue of severance packages.
"They have to find some resolution," he said. "Things that may impact certain requirements around the collective agreement, and those requirements have to be met and if there's extenuating circumstances, we'll have to deal with those circumstances when we find out what they are."
Possible AbitibiBowater bankruptcy may affect severance
-
- Published on December 15th, 2008
- Published on June 22nd, 2010
- SUE HICKEY
When AbitibiBowater workers are laid off in March, they will get severance pay packages - or will they?
Politicians and employees are wondering if the workers will still receive their severance if the paper giant files for bankruptcy.
- Number of views : 55
- Rate
- Top of the page
Comments
-
- Mary
- - June 28th, 2010 at 14:49:46
If this Abitibi Consolidated which is closing the Mill in Grand Falls for good in March of 09, has retirees all over the world, living on their pensions after working for 25 or more years, files for Bankruptcy, then what happens to the Penions of these people?? Are they buried, and just forgotten about, or do they have some sort of Contingency in place, as should have been done ages ago, just in case situations of this nature happen. Not being an Economist, one has to wonder what happens to their Penions, if they are frozen, or they can still go on collecting their pensions. One has to wonder about these things. This closing of this Mill after 100 years of Operation, certainly makes one stand up and take notice of what can happen in an economic downturn such as these present bad, economic times, globally and domestically.
-
- Bill
- - June 28th, 2010 at 14:49:37
Welcome to big business here boys, where no holds are barred.
Obviously Minister Skinner didn't do his homework. Au contraire to his opinion, such matters are not related to the collective agreement. The collective agreement stipulates terms and conditions of severance amount and triggering of payments but all with the assumption that the comapny is solvent and has the liquidity to pay. If it doesn't through bankruptcy proceedings, then other rules apply which nullify the collective agreement language. The employees have no rights over other creditors - most time courts see them as having less rights. Minister Skinner should check his own government labor standards around severance and see if their is any law to protect the workers. If there is not anything written, the employees will have to stand in line like all other creditors and get at best, 10 cents on the dollar. That is about the order of magnitute I have seen judges award - maybe less in the case of Grand Falls as he will be influenced in his decision as to how the mill closed.
Actually this has happened many times in the past - particularly in the textile manufacturing sector in southern Ontario in the 60s and 70s. A company on the verge of bankruptcy announces a closure of different plants but pushs out the closure date to after the bankruptcy occurs, they then let the employees fight over severance with the rest of the creditors. No point in paying out that money beforehand - that means there is less in the coffers for management severence.
I've attached the website of the Ontario governments position on it - which I'm sure the NFLD government officials will now scramble to copy and scope out. http://www.labour.gov.on.ca/english/es/guide/guide_16.html
Also please remember, these creditors that AB owes over $6 billion to are representing people no different than the employees of the Grand Falls Mill...in fact some may actually be employees of the Grand Falls Mill or residents of the town. Many people have invested their lifes savings in the money lent to AB as debt and will feel no remorse whatsover recovering that before AB employees - actually many will blame the employees for the mills demise and their losses.
Bill P. retired
Bankruptcy Section Oakville
Government Accounting Ont. -
- Tom
- - June 28th, 2010 at 14:49:30
Danny ,don't forget their mineral rights in Buchans
-
- Mike
- - June 28th, 2010 at 14:49:25
The seizing of the water, timber, and hydro assets can actually backfire on the union with severance. If those assets were needed to pay down debt in 2009 maybe just maybe this will push creditors away and the company will indeed go bankrupt - hence not paying any severance to the employees of the mill.
MJ -
- Mary
- - June 22nd, 2010 at 16:05:15
If this Abitibi Consolidated which is closing the Mill in Grand Falls for good in March of 09, has retirees all over the world, living on their pensions after working for 25 or more years, files for Bankruptcy, then what happens to the Penions of these people?? Are they buried, and just forgotten about, or do they have some sort of Contingency in place, as should have been done ages ago, just in case situations of this nature happen. Not being an Economist, one has to wonder what happens to their Penions, if they are frozen, or they can still go on collecting their pensions. One has to wonder about these things. This closing of this Mill after 100 years of Operation, certainly makes one stand up and take notice of what can happen in an economic downturn such as these present bad, economic times, globally and domestically.
-
- Bill
- - June 22nd, 2010 at 16:05:03
Welcome to big business here boys, where no holds are barred.
Obviously Minister Skinner didn't do his homework. Au contraire to his opinion, such matters are not related to the collective agreement. The collective agreement stipulates terms and conditions of severance amount and triggering of payments but all with the assumption that the comapny is solvent and has the liquidity to pay. If it doesn't through bankruptcy proceedings, then other rules apply which nullify the collective agreement language. The employees have no rights over other creditors - most time courts see them as having less rights. Minister Skinner should check his own government labor standards around severance and see if their is any law to protect the workers. If there is not anything written, the employees will have to stand in line like all other creditors and get at best, 10 cents on the dollar. That is about the order of magnitute I have seen judges award - maybe less in the case of Grand Falls as he will be influenced in his decision as to how the mill closed.
Actually this has happened many times in the past - particularly in the textile manufacturing sector in southern Ontario in the 60s and 70s. A company on the verge of bankruptcy announces a closure of different plants but pushs out the closure date to after the bankruptcy occurs, they then let the employees fight over severance with the rest of the creditors. No point in paying out that money beforehand - that means there is less in the coffers for management severence.
I've attached the website of the Ontario governments position on it - which I'm sure the NFLD government officials will now scramble to copy and scope out. http://www.labour.gov.on.ca/english/es/guide/guide_16.html
Also please remember, these creditors that AB owes over $6 billion to are representing people no different than the employees of the Grand Falls Mill...in fact some may actually be employees of the Grand Falls Mill or residents of the town. Many people have invested their lifes savings in the money lent to AB as debt and will feel no remorse whatsover recovering that before AB employees - actually many will blame the employees for the mills demise and their losses.
Bill P. retired
Bankruptcy Section Oakville
Government Accounting Ont. -
- Tom
- - June 22nd, 2010 at 16:04:55
Danny ,don't forget their mineral rights in Buchans
-
- Mike
- - June 22nd, 2010 at 16:04:48
The seizing of the water, timber, and hydro assets can actually backfire on the union with severance. If those assets were needed to pay down debt in 2009 maybe just maybe this will push creditors away and the company will indeed go bankrupt - hence not paying any severance to the employees of the mill.
MJ
