Telus and telecom union still battling to reach new collective agreement

Amid all the concerns of the telecom marketplace, Telus Corp. is also facing problems on the labour front. The western ILEC is attempting to forge a new contract with the Telecommunications Workers Union (TWU), the group that represents all of the company’s wireline workers. When BC Tel and Alberta’s Telus merged in 1999, the new telco inherited five collective agreements negotiated by four different unions. The TWU represented the workers in British Columbia, while the Albertans fell under the jurisdiction of the International Brotherhood of Electrical Workers, the Communications Energy and Paperworkers Union, and the Civic Service Union. A vote under auspices of the Canada Industrial Relations Board in May 2000 resulted in the TWU becoming the bargaining agent for all Telus unionized employees. The last of the contracts expired in December 2000. The company and the union have met more than 100 times since then trying to hammer out a new agreement. The telco’s EVP corporate affairs and general counsel tells Network Letter the process has not been easy."Telus has tabled 38 specific proposals to provisions in the agreement, 38 out of I believe 54 articles of the agreement that we’ve been trying to deal with, together with letters of understanding and memoranda," Jim Peters says. "We’re continuing to table written proposals. Unfortunately, to date, the union has not made any meaningful response to those written proposals by Telus." For its part, the TWU is mounting a public relations campaign to battle the job cutbacks the company has proposed. "This will have a devastating effect on an already deteriorating quality of service in communities in British Columbia and Alberta as Telus withdraws jobs and millions of dollars from the local economy, creating unemployment and instability," the union said in a news release. TWU president Rod Hiebert was unavailable for comment, despite several attempts by Network Letter to reach the union leader.Peters maintains the relationship between Telus and its workers is good. He notes that the same cannot be said for the rapport between the telco and the TWU. He has taken two extraordinary measures in response to the situation. "I took a rather unique step back on July 19 and wrote an open letter to all Telus employees in B.C. and Alberta," he reports. "I felt compelled to do that in light of what I considered to be a series of false and misleading statements by representatives of the TWU. "We did seek a legal opinion on whether or not there had been a defamation by these individuals at the TWU. The external advice was yes, there had been. We had a very strong case and could win. But in reviewing our options with Darren Entwistle, our CEO, he chose to take the high ground and he has persuaded me that that is the right way to do it. We’re going to have to live and work with the TWU once we sign our collective agreement." The union is upset that shortly after the early retirement and the voluntary departure packages were announced, some managers gave false information to workers. The bosses supposedly told the employees they had no option except to take the deal and that speed was of the essence, since Telus could soon withdraw the offer. A meeting between the TWU and Telus officials on July 19 cleared up the misunderstanding, the union told its members. Peters asserts that the company wants its employees and other stakeholders to get proper information in a timely fashion. He says the telco deliberately gave its workers plenty of time to consider their options for retirement or departure. "We’ve been pleased with the level of response and interest in those programs. And the reason we’re pleased is that if we get enough of our employees wanting to participate in those two programs we won’t have to resort to layoffs," he states. "Layoffs is something that we will resort to if we don’t get the sufficient number of people but as I say, the response to date has been very positive and we’re optimistic that we’re going to get there." The restructuring provision will cost Telus between $400 and $500 million later this year, the company said when releasing its Q2 results. It expects EBITDA savings of $15-20 million this year, $225-300 million next year and $400-500 million in 2004 as a result of the downsizing. The dispute with the union was cited by Moody’s Investors Service as one of the reasons it was slashing Telus’ bond rating from Baa2 to Ba1, with a negative outlook."The reduction of 6,000 employees, substantially in the incumbent carrier business, will allow Telus to reduce its cost structure," the rating agency noted. "However, union renewal contract negotiations may prove challenging. Moody’s believes such actions are critical for the company to turn cash flow positive on a consolidated basis by 2004." Peters concedes it’s a setback, but reminds people that other rating firms were not so pessimistic. "We’re disappointed that Moody’s chose to issue a downgrade two notches. It wasn’t too long ago that they reaffirmed our rating at BBB mid so we were disappointed Moody’s chose to downgrade us the way they did," he admits. "We take great comfort from the fact that the three other agencies—DBRS, Fitch as well as S&P—the fact that the three of them have maintained us at BBB mid we think is a more accurate reflection of the underlying fundamentals that Telus is operating on."

Telus and telecom union still battling to reach new collective agreement

News | August 13, 2002

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