Unionized workers at the Iron Ore of Company of Canada (IOC) in Labrador City are on the picket line, after voting Monday to reject the latest contract offer from the company.

United Steelworkers Union Local 5795 voted overwhelmingly to strike, and by 3 a.m. were on their way to the IOC gates to begin picketing at three different location at the IOC site.

"We're on strike, 91.9 per cent in favour," a union member declared from the front steps of the Steelworkers hall following the vote.

In a statement to media, IOC said it regrets the union's decision to strike, saying it believed the offer it made was reasonable.

"We believe our offer was competitive and included improvements for employees across a range of areas from increased pay and pension contributions to health benefits and the use of temporary workers," it read.

Talks between IOC and the United Steelworkers broke down earlier in the month when the company hoped to introduce a two-tiered pension system in which new employees would get one third of the pension value. The company also wanted to change how sick leave is managed.

Temporary workers proposal

In its latest offer, IOC offered wage increases of 2.4 per cent every year for five years, along with increased contributions to the defined pension plan and a reduction of temporary workers from 12.5 to six per cent.

The strike is on outside IOC in Labrador City <a href="https://twitter.com/hashtag/cbcnl?src=hash&ref_src=twsrc%5Etfw">#cbcnl</a> <a href="https://t.co/53UgIX1hk5">pic.twitter.com/53UgIX1hk5</a> —@AlysonSamsonCBC

Local 5795 President Ron Thomas said they couldn't agree to the temporary workforce proposal given what he says are the company's unfair treatment of temporary workers in the past.

"I know it sounds difficult for the media to listen to [our complaints about] a temporary workforce and say 'You know what, it's only six per cent Ron, what's the problem with that'?" he told CBC's Labrador Morning.

"When you've got someone coming in doing the exact same job you're doing, working side by side, they should be able to get the exact same benefits our members fought for over the years."

Elaine Caines and Keri Johnson who was a temporary worker are here to support the other non permanent employees <a href="https://t.co/6I7mRJRB81">pic.twitter.com/6I7mRJRB81</a> —@AlysonSamsonCBC

Thomas said he could point to countless horror stories where temporary workers were treated poorly and were pushed to their limits by the company.

He said the company did not bargain in good faith from the very start, and that the union was put on the defensive during first set of talks when IOC proposed concessions that the union did not expect.

"Right from the start we had to walk away from the table," he said. "This is a strike that should not have happened but we feel this company has forced us in the corner to do it."

USW 5795 workers on the picket line early Tuesday morning outside the IOC mine in Labrador City. (Jolene Brideau)

With the union's rejection of the new offer, IOC says it will now focus on ensuring people are safe and the mine's assets are maintained.

"The site has been placed on care and maintenance, and staff will be undertaking essential duties," the statement read.

"This strike will unfortunately not only affect IOC, it will have significant economic and social impacts for employees and the community."