June 30 promises to be an extra bitter day for current and former U.S. Steel Canada employees who have been impacted by the company’s ongoing bankruptcy proceeding.
According to court documents filed in Toronto, June 30 is the deadline for dispersing $2.57 million in retention bonuses to 28 executives deemed key to the company’s restructuring.
In light of the fact that this same court allowed U.S. Steel Canada to eliminate benefits to more than 21,000 pensioners last fall, union executives and members are not happy about it.
“They’re all going to give each other bonuses,” Bill Ferguson, president of Local 8782 of the United Steelworkers in Nanticoke, said this week. “This is for the management group while pensioners are going without benefits. It’s really sticking in everyone’s craw.”
Justice Herman Wilton-Siegel approved the “key employee retention plan” (KERP) in October, 2014. Wilton-Siegel was responding to an affidavit from William Aziz, a chartered accountant retained by the U.S. Steel Canada board of directors as an adviser to this restructuring.
In his affidavit, Aziz said the 28 employees “occupy essential management and operational roles and are considered essential to the success of USSC’s restructuring efforts and continued operation of USSC as a going concern.”
The plan cites four triggering events for the payouts.
They include the termination, without cause, of any of the affected employees; the implementation of a court-approved plan or arrangement for restructuring the company; the completion of a sale or liquidation of U.S. Steel Canada’s assets; and June 30, 2016 – whichever happens first.
Ferguson said the payout plan is contemptible, especially in light of the fact that some pensioners have become seriously ill since last fall and will have a hard time paying for their medication.
“I think it’s newsworthy that U.S. Steel Canada executives are going to be stuffing their pockets with money,” Ferguson said. “We’re really mad about it. We think it’s immoral.”
The United Steelworkers in Hamilton are also unhappy. Gary Howe, president of Local 1005, can’t square the fact that U.S. Steel Canada is in a bankruptcy proceeding while some of its “key” executives are in line for bonus payments on top of their regular wages.
“This doesn’t sit well with the people who have worked for (the former) Stelco their whole lives,” Howe said Friday.
Howe recalled how the former Hilton Works facility in Hamilton once employed 13,000 people. Today, the workforce has dwindled to 540.
Questions directed to U.S. Steel headquarters in Pittsburgh, Pennsylvania, this week, were referred Friday afternoon to U.S. Steel Canada. Comment from the Canadian subsidiary was not available at press time.