Catalyst Contests Post-Retirement Successorship

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Catalyst Paper, Richmond, B.C., Canada, said this week that it will contest an application to the Labour Relations Board of British Columbia regarding certain post-retirement benefits for some retirees formerly employed by MacMillan Bloedel Ltd., now doing business as Weyerhaeuser Company Ltd.

The Communications, Energy and Paperworkers Union of Canada Locals 1, 76, 592, and 686, representing hourly employees at Powell River and Port Alberni mills, have applied to the Labour Relations Board for a declaration that Catalyst is responsible for certain post-retirement medical and extended health benefits for some retired employees represented by the Locals and who retired from MacMillan Bloedel Ltd.

Pacifica Papers Inc. acquired the Powell River and Port Alberni mills from MacMillan Bloedel Ltd. in 1998. At the time of that transaction, MacMillan Bloedel reportedly agreed to retain responsibility for any benefits for eligible employees who retired prior to the acquisition by Pacifica of the mills. Catalyst subsequently amalgamated with Pacifica in 2001.

The Locals claim the contractual relationships between Catalyst, Pacifica, and MacMillan Bloedel Ltd. do not absolve Catalyst from successorship provisions of the Labour Relations Code imposed on Pacifica at the time Pacifica acquired the mills. If the Locals' application is successful, Catalyst could incur additional costs of up to $4 million annually.

Catalyst says that it does not agree with the Locals' position and has been advised that a number of defenses are available that are expected to eliminate or significantly reduce any financial exposure, including seeking indemnification from Weyerhaeuser. Proceedings are at a very early stage and a date for a hearing has not been set.