A report by the special mediator appointed to oversee discussions between Federated Cooperative Ltd. (FCL) and Unifor Local 594 has now been released.

The special mediator, Vince Ready, was appointed in February. Parties met for 20 days of negotiations, starting on Feb 18.

As of Sunday, both parties had responded to the report. Unifor accepted the recommendations, while FCL did not accept the recommendations in full.

Unifor 594 represents about 800 employees at the Co-op Refinery Complex, who were locked out in December after issuing a 48-hour strike notice.

As a result the union picketed and blockaded the refinery property, resulting in multiple court disputes and arrests involving union leadership at the national and local level.

Employee pensions are at the heart of the dispute.

Some of the locked out employees were on a defined benefit plan, which was fully funded by FCL.

In previous rounds of bargaining, both sides agreed to enroll new employees on a defined contribution plan, where they paid into their pension plans with a six per cent contribution by FCL.

Just before employees were locked out, FCL proposed to allow employees to keep their defined benefit plan if they started making payments into their pension, among other changes.

Unifor rejected that proposal.

Report suggests employee pension contributions

The report said the special mediator's recommendations "go a long way to meeting the cost savings and efficiency targets" sought by FCL in the bargaining process.

The report said upon ratification, employees currently enrolled in the defined benefit plan would start to contribute four per cent of their average earnings into their pension plans.

As of Feb. 1, 2022, members of the defined benefit plan would start contributing eight per cent of their earnings to their pension plan.

Like the current defined benefit plan, the report recommended the accrual rate be maintained at two per cent of final average earnings, with no Canada Pension Plan-related reduction at 65.

It also recommended that there be no indexation on service after June 30, 2020, with the consumer price index capped at a maximum of 2 per cent for service before July 1, 2020.

Tensions continue to rise between the Co-op refinery and its workers, as an employee lockout that started in December continues. The main issue — a proposed change to workers' pension plan. We hear from both sides of the dispute and an industrial relations expert. 51:57

In addition to these recommendations, the report suggested employees who chose to move from the defined benefit plan to the defined contribution plan during the term of the collective agreement be eligible for early retirement allowance.

During special mediator negotiations, Unifor proposed moving employees to an already-existing negotiated cost defined benefit plan, similar to that in the pulp and paper industry.

Unifor members and supporters chant during a rally outside the legislative building in Regina, where leaders called on the government to be leaders in a dispute between the union and the Co-op Refinery Complex on Jan. 30, 2020. (Bryan Eneas/CBC)

The report said that idea had merit, although it was rejected by FCL.

"In our view, merging bargaining unit employee pensions with the [Pulp and Paper Industry Plan] would provide the cost savings and financial certainty the Employer seeks and pose little risk in terms of future diminished benefits or increased employee contributions," the report said.

The report also explored FCL's proposed changes to employee's savings plans, which Unifor opposed.

"Approximately half of energy sector bargaining units – including Imperial Oil, Suncor, Spectre Energy, Enbridge and Chevron – have some type of savings plan available to employees," the report said. "Consequently, we recommend no changes."

Other recommendations

The report recommended a wage increase over the four year term of the collective agreement.

In the first year, employees would see a 2.5 per cent raise. In the second year, there would be a 2.75 per cent increase. In the third year, employees would see a three per cent increase. In the fourth year there would be a 3.5 per cent increase.

Both parties agreed to increase severance pay from 1.15 per cent to 1.3 per cent. Both parties also agreed to add language to the collective agreement addressing domestic violence. FCL recommended creating a womens' advocate, which the report supported.

The tires of cars were deflated, adding vehicles to fences that blockaded enterances into the Co-op Refinery in Regina. (Bryan Eneas/CBC)

The report said the mediator accepted a proposal made by the employer to eliminate language in the agreement and recommended a clause around minimum staffing be eliminated, creating savings for FCL.

"The elimination of the minimum maintenance staffing requirement in no way enhances the Employer's ability to contract out this work," the report said.

The report also recommended a change in wording in the agreement that would allow FCL to assign different work to Unifor members.

FCL proposed an elimination of master operator positions; the union argued that could "blur the line" between supervisor and operational duties, and maintained the distinction was "vital for maintaining a safe work environment."

The report found the proposal to eliminate the master operator position to be unwarranted, but noted it could go before a labour relations board if conditions supported an application.

Regina police monitored the Unifor picket lines at the Co-op Refinery Complex on Friday, Jan. 31, 2020. (Heidi Atter/CBC)

Should both parties accept the report's recommendations, an orderly return to work order would be put in place.

Unifor issued a statement on Friday that said it accepted the recommendations.

"Our committee is not thrilled with the final report and the significant changes that are recommended," Jerry Dias, Unifor National President said.

A statement from the refinery complex said it was still analyzing the decision as of March 20.

"This is obviously an important decision and it requires some additional time to thoroughly review and evaluate the report," the statement said.

Memo calls for modifications

On Sunday afternoon, after this story was first published, CBC News obtained a memo sent to managers that said the refinery complex could not accept the special mediator's recommendations in full.

"The mediator's report does contain a number of helpful recommendations, such as the language changes around operational efficiencies, which we hope will stand to move negotiations toward a resolution and a signed deal with Unifor 594," the memo said.

"There are, however, some recommendations that we are unable to accept without some further modifications."

A statement posted to Co-op Refinery Complex social media pages cited "stark world developments" and changing global economic circumstances which have resulted in declines in oil demand and oil prices.

"Our inability to accept the report in full stems from our responsibility to you – our employees, our local co-op owners, our customers, and the broader communities that depend on a long-term, sustainable future for our Refinery," the statement said.

Read the full report here: