A B.C. Labour Relations Board decision could mean more cash in the pockets of an estimated 130 former employees of the Valemount sawmill, after Carrier Lumber Ltd. lost an appeal to the labour board.
The ruling could force Carrier to dish out millions in severance pay to members of United Steelworkers Local 1-417 who were laid off in 2006 and never re-hired.
If Carrier does not appeal to the Supreme Court by Sept 15, the company will have to arrange payment for every employee laid off between 2006 and 2009, the value of 10 days pay for every year they were employed by the mill.
For long-standing employees, that could mean upwards of $70,000. Warren Oja, Financial Secretary for Steelworkers Local 1-417 has reported the total amount paid out would likely be just above $5 Million.
The Valemount sawmill had been in operation for half a century when it shut down in 2006 due to pressures on the logging industry.
Carrier Lumber took over the mill from Northwest Specialty Lumber in May 2006, after Northwest had laid off most of its employees
Carrier President Bill Kordyban says his company, operating under the name Valemount Forest Products, kept a dozen staff to maintain the plant while it attempted to re-open operations. It never did, and in 2009, Carrier announced the permanent closure of the mill.
Carrier submitted their appeal case saying that many workers were not entitled to severance pay because termination of employment was not “because of” the permanent closure of the Mill – the closure came later.
After an extensive review of the jurisprudence presented to him by the parties, the arbitrator concluded the mill closed permanently on May 24, 2006. He further concluded the employees had been terminated because of the permanent closure, and accordingly they were entitled to severance pay, which upheld a previous decision this past winter.
“What they’re going to have to do now is base that number on the employees on the seniority list when it shut down,” says Marty Gibbons, president of the union. “We’re forecasting this to bring millions into the Valemount community.”
Gibbons says the timing of the announcement of permanent closure in May 2009 worked in Carrier’s favour.
“One to two months after the employees fell off the seniority list, they contacted us and advised us they were tearing the mill down and closing it and it was a permanent closure and they would be paying severance only to the 12 or so workers left on the seniority list,” he says.
But Kordyban says he doesn’t see how those employees, who were laid off before Carrier even bought the mill, could be owed severance due to “permanent closure” when the mill was technically operational and still employed staff for three years after they were laid off.
“We think it’s just wrong,” Kordyban says. “When we bought the plant and tried to get it going again, we still had employees,” he says. “I think everyone would have agreed the plant was open. When the arbitrator ruled retro-actively the plant was permanently closed, you’re left with a scenario where the plant was open yet it’s permanently closed at the same time.”
If a plant is still open, workers who are laid off don’t have to be paid severance if they are not re-hired. The mill was shut down, save for a dozen employees, but no one knew whether it was temporary or permanent. The arbitrator ruled that, effectively speaking, the plant was permanently shut down when the majority of its nearly 200 employees were laid off in 2006.
“It cost us a heck of a lot of money to keep the place going,” Kordyban says. “I should have just shut the place down.”
Kordyban would not confirm the amount of severance that would be due to workers if the company accepts the ruling. Carrier Lumber Ltd. must decide within 15 days
of the ruling which occurred Sept. 3rd. This means by the end of this week, elligable mill workers will know whether they will get severance pay, or whether Carrier has launched a legal appeal to the Supreme Court.
Shirley Gonyou, who worked at the mill 33 years, was chair of the union during discussions to re-open the mill. As Chair, she was privy to meetings with Carrier between 2006 and 2009.
She says she is happy with the ruling, but the real victory would be to have a working mill.
“Through all those meetings, I never really believed that the mill would go,” she says. “You try to be positive for other people, but I don’t know if that was so good either to get people’s hopes up.”
Gonyou says most of the mill workers have moved away from Valemount after they were laid off. But the severance pay will still make a difference in the community.
“It has a big impact,” she says. “My thoughts are Kordyban should step up to the plate, be a man and pay the people.”
Gibbons says the victory is only partial. Outside companies continue to capitalize on forestry in the valley with little benefit to the people.
“While it’s great for our members, it’s not the solution to the problem in Valemount,” he says. “The problem in Valemount is those logs that are driven out of your community every day. Those logs should be providing jobs for people in the community.”
“Although we got severance, our goal was always to keep the mill, keep people employed.”
