Canadian farmers back workers in Co-op Refinery lock-out dispute

The workers went on strike in December last year over disagreements about their pension contributions

Canada’s National Union of Farmers (NFU) has published a statement in support for workers of Co-op Refinery Complex in their dispute with Federated Co-operatives Ltd (FCL).

Eight hundred workers went on strike in December, over disagreements about their pension contributions.

In response, FCL, the federation of retail co-ops which owns the complex, locked the workers out, arguing this was necessary to keep the site operational and protect fuel supplies to 170 local co-ops and their communities across Western Canada.

On 17 January NFU sent a letter to FCL urging it to end the lockout and return to the bargaining table. NFU is particularly concerned about the lockout since many of its members choose to use Co-op Refinery products such as diesel fuel, gas and oil.

“One reason for using Co-op products is that co-operatives are businesses that are not just about the bottom line, but have made commitment to uphold the internationally accepted co-operative principles, which include concern for community. With this lockout, it has become harder to see how the Federated Co-operatives is different from other companies,” said the letter.

NFU also claims Federated Cooperatives is looking to lower workers’ pension benefits and has prepared for a lockout in advanced by investing in operating with replacement workers during a prolonged dispute.

Responding to the letter, the chair of FCL, Sharon Alford, said in a statement that the board understood the criticality of the CRC’s fuel supply to agricultural producers and had “an effective business continuity plan’’ in place.

In terms of pension plans, FCL argues that the workers’ union, Unifor 594, is demanding an “irrevocable clause” guaranteeing no changes at present or in the future to the defined benefits (DB) pension plan before any further talks could take place.

According to FCL, employees who are members of Unifor 594 currently have two pensions, a fully employer-funded DB plan, and a “savings plan” wherein the employer matches employee contributions of 6.5% (for a total contribution of 13% per year). The employer argues the current Defined Benefit Plan is unsustainable with its 2019 Annual Report reflecting a CA$168m pension liability.

“These are monies that would otherwise be available to share back with local co-ops and their members as patronage, or be re-invested in our long-term plans to enhance the CRC’s ability to be a leader in low-carbon, liquid transportation fuels production. Put simply, the current formula is not sustainable if we are going to succeed over the long term,” Ms Alford, a farmer herself, said in a statement.

FCL is also suggesting replacing the savings plan with a performance bonus based on the CRC’s performance in safety, reliability and utilisation rates.

The co-op has offered a 11.75% wage increase over four years with the option for unionised employees to remain on their current pension plan or move to its Defined Contribution (DC) Pension Plan – which is used by management and all new hirings. Regardless of the pension choice employees make, the co-op says it will contribute up to 10% employees’ salary in pension. 

“Our members have invested in the CRC, and as a consumers’ co-operative, it is incumbent upon us to ensure that those members get a fair rate of return on their investment. We are proud of our ability to remunerate all our employees fairly and competitively, including those at the CRC. But remuneration of employees is not our only measure of success. Our duty of care is to the whole membership – all 1.9 million individual members of co-operatives across western Canada – not only to a select group of employees who already enjoy a total rewards package in excess of competitors in the industry,” she added.

But Unifor argues FCL which reported $959m profit in 2019, can afford to save employee pensions.

“Rogue corporate executives at Co-op have picked a fight with our entire union,” said Unifor presidentJerry Dias. “We will continue to escalate job action and do whatever it takes to protect our members’ pensions from corporate greed.”

Mr Dias was among the seven Unifor members who were arrested in Regina after the blocked traffic in and out of the refinery despite a court injunction limiting traffic delays to 10 minutes.

The refinery complex was built in the 1930s by farmers who formed oil co-ops to reduce the cost of oil.

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