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A transport truck carries a cargo container from the Centerm Container Terminal at port in Vancouver, on July 14.DARRYL DYCK/The Canadian Press

B.C. port workers returned to the picket lines instead of reporting for their scheduled night shifts on Tuesday after their union leadership rejected a tentative four-year deal announced last week.

About 7,400 members of the International Longshore & Warehouse Union Canada (ILWU) halted their 13-day strike on Thursday, but the resumption of work didn’t last long.

The ILWU listed contracting out as one of its three main issues, along with cost-of-living wage increases and the impact of automation on job security. The union sought a two-year agreement, while employers proposed a four-year deal.

Even before picket lines went back up on Tuesday, business groups warned that it could take until late September or even longer to fully clear the backlog of cargo that has been piling up since Canada Day.

Peter Simpson, director-general of the Federal Mediation and Conciliation Service, drafted the recommended collective agreement that led to last week’s tentative settlement.

“The ILWU Canada longshore caucus does not believe the recommendations had the ability to protect our jobs now or into the future,” the union said in a statement late on Tuesday.

The ILWU’s caucus that includes representatives of locals rejected the tentative pact that had been given the green light on Thursday by the union’s bargaining unit.

The tentative settlement, which had been intended to end the strike, has a compounded wage hike of 19.2 per cent over four years, plus a signing bonus and increases to a retirement fund, according to two sources familiar with what the employers had hoped would be an acceptable pact.

It provides for wage hikes of 5 per cent in each of the first two years, followed by increases of 4 per cent in each of the final two years. The signing bonus, or what the ILWU calls an “inflation adjustment allowance,” would be about $3,000, depending on the hours worked in 2022.

The Globe and Mail is not identifying the sources, who are familiar with the proposed settlement, because they were not authorized to speak publicly on the matter.

The BC Maritime Employers Association (BCMEA), which represents 49 private-sector companies such as shipowners and terminal operators, said the tentative pact wasn’t given a fair shake.

“We regret to advise that ILWU Canada has communicated that ILWU’s internal caucus leadership rejected the tentative agreement, before it was even taken to a vote of the full union membership,” the BCMEA said in a statement on Tuesday.

Railway container shipments plummet in July amid B.C. port workers strike

In the past, the retirement fund has been a crucial part of keeping labour peace, with employers seeking to address concerns about job security amid waves of technological change over the decades.

The retirement payment, which varies depending on credited service, is in addition to benefits and pension.

Under the proposed deal, the retirement fund designed to compensate employees for modernization and mechanization would be gradually increased, with the payout being 18.5 per cent higher in the fourth year, compared with now. Known as M&M payments, the fund earmarked for union members has grown over the years to the current lump-sum payout of $81,250, allowing a worker with at least 25 years of service to receive the payment within 30 days of retirement, according to the sources.

During the impasse at the bargaining table, federal Labour Minister Seamus O’Regan arrived in Vancouver on June 30 and stayed until July 13, when the union agreed that its members would start going back to work.

“Ratification processes are between the employer and the union, and we do not comment on them,” Mr. O’Regan’s office said in a statement on Tuesday before the ILWU announced that it asked workers to return to the picket lines.

About 6,000 of the ILWU’s members are in the Vancouver region, 1,000 in the Prince Rupert area and the rest on Vancouver Island.

The Greater Vancouver Board of Trade estimates that the walkout resulted in the disruption of $9.9-billion worth of goods between the morning of July 1 and last Thursday afternoon, based on a rate of $800-million a day.

“We are dismayed and disappointed that the mediated deal was rejected by the ILWU and job action is recommencing at Canada’s West Coast ports,” board president Bridgitte Anderson said in a news release.

Several details of the recommended pact are contained in a “bargaining update bulletin,” dated July 14, but not signed by any ILWU leaders.

The ILWU’s Local 500, which represents employees along Burrard Inlet and Howe Sound, told union members that while the bulletin is on official letterhead, the “fake” notice should be disregarded.

“Local 500 is extremely disturbed and disgusted to learn that our letterhead has been hijacked,” said Local 500, which is one of a dozen ILWU locals.

The previous five-year contract expired on March 31.

The mediator’s proposed wage increases would apply to the general base rate that is currently $48.23 an hour for the day shift from 8 a.m. to 4:30 p.m. on weekdays, with pay rising to about $57.50 an hour in the fourth year of the proposed contract. The tentative collective agreement starts on April 1, 2023, and ends on March 31, 2027.

For the graveyard shift from Monday through Friday that runs from 1 a.m. to 8 a.m., the current wage is $75.05 an hour. Premiums are paid for shifts on weekends and holidays.

Stephen Tapp, chief economist at the Canadian Chamber of Commerce, declined to comment on the tentative agreement. But he said that, in general, there could be inflationary effects arising from increased wages in the labour force.

“The idea that settling at a higher wage rate and then also retroactively paying some bonuses or things like that – that could keep the momentum and the inflation pressures we’ve got in the economy,” Mr. Tapp said in an interview.

But a study commissioned by the ILWU played down the impact of higher wages on the broader economy.

“It is the shipping companies and terminal operators whose greed has disrupted Canada’s economy, including by contributing to the worst inflation in decades,” according to the report, released last week by Jim Stanford, economist and director at the Centre for Future Work. Five major shipping companies made US$103.3-billion in profit last year, compared with US$6.2-billion in 2019, before the COVID-19 pandemic, Mr. Stanford said.

In its statement on Tuesday, the ILWU said wages remain a concern: “With the record profits that the BCMEA’s member companies have earned over the last few years, the employers have not addressed the cost-of-living issues.”

Shipping industry observers say the strike will have significant ripple effects lasting at least several weeks because of the lengthy process for clearing the backlog of containers and other cargo, both on the import and export sides.

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