The United Steelworkers union has reached a tentative contract agreement with U.S. Steel Canada Inc. that covers workers in Hamilton, marking the first time the steel company has not locked out workers at one of its two major Canadian mills.

Since the 2007 purchase by United States Steel Corp. of what was then Stelco Inc., the company locked out workers once after failing to reach an agreement covering its Hamilton workers, and twice at its Lake Erie operations in Nanticoke, Ont.

The agreement, which covers about 600 active workers in Hamilton and about 10,000 retirees from the Hamilton Works, was reached before the expiry of the current contract on Wednesday and about one month after U.S. Steel Canada was granted bankruptcy protection under the Companies' Creditors Arrangement Act.

Story continues below advertisement

That protection was extended last week until next January after lawyers for the company, the Ontario government and the United Steelworkers reached a deal on how U.S. Steel Canada will be financed while the company is operating in CCAA protection.

The company has said in court filings that it expects CCAA protection to last until at least the end of 2015.

U.S. Steel was granted approval last week by Justice Herman Wilton-Siegel of the Ontario Superior Court to provide debtor-in-possession financing of $185-million for its Canadian unit.

The Ontario government and the union opposed that financing, but the government relented during the negotiations after it was awarded the ability to challenge U.S. Steel if the company uses the debtor-in-possession financing to avoid a pension guarantee it made to the government when it took over Stelco.

The union did not support the deal, but said it would not oppose the financing plan.

That was also the stance taken by United Steelworkers Local 1005, which represents the workers and retirees in Hamilton and has separate legal representation from USW Local 8782 at the Lake Erie works.

The court ruling made last week also permitted U.S. Steel to begin a sales process for the two units.