CANADIAN LABOUR TORONTO:
NORTEL RETIREES SUPPORT RALLY:

Here's another support rally coming up next week, this one from the Canadian Auto Workers (CAW). The Nortel company has been using Canada's bankruptcy laws to avoid their pension obligations. Former Nortel workers are demanding that alternatives to the usual pension plan wind-up be found. One such alternative is the Financial Support Model as proposed by the Nortel Retiree's Protection Committee. Please go to their website for more details and also to see how you can support the Nortel pensioners. Here's the announcement.

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Nortel Workers Rally at Queen's Park: September 15
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The CAW national union is calling on all retired workers, local unions and other allies to come to Queen's Park in Toronto on Wednesday, September 15 at 12 noon to support former Nortel workers.

The rally is part of the on-going CAW and CLC campaign to demand "Retirement Security for All Workers."

The Nortel Retirees and former employees Protection Canada (NRPC) have been lobbying the Ontario government to explore alternatives to a conventional pension plan wind-up.

The CAW is asking that all local unions, Retired Workers chapters and area councils organize buses in their respective areas. Jenny Ahn, director of the CAW retired workers department, said the rally highlights the importance of government action on the issue.

"We need to keep the pressure on all levels of government to fulfill their moral obligation to ensure our pensions are funded and fully protected," said Ahn.

For more information and bus locations contact CAW National Coordinator Dean Lindsay at 1-800-268-5763, ext. 3791 or (416) 497-4110, ext. 3791.
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The Nortel retirees protection Association has a rather restricted mandate, mostly dealing only with ex-employees of Nortel in Ontario. There is, however, a new national organization of pensioners the Silver Fox Alliance that is more national and not company restricted. Check out their website, especially in regard to the following petition regarding the federal Bill C-501. This is a motion before Parliament that has passed second reading despite the fact that it has the support of only 12 Conservative MPs. It aims to reform federal bankruptcy legislation such that workers' pensions are secured during the bankruptcy process. Go to the Silver Fox website to sign the following petition.
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To: The Rt. Hon. Stephen Harper, The Hon. Jim Flaherty, The Hon. Tony Clement.
We the undersigned implore you to pass Bill C-501 third reading before Sept. 30. It is time to stop the unconscionable harm inflicted by current bankruptcy laws on Canadian pensioners. We have a voice.
Let it not be said, " Sirs, you had a choice"

CANADIAN LABOUR:

PROTECTING PENSIONS:

Molly has blogged on the matter of pension protection in the case of corporate bankruptcy before, particularly in the case of Nortel retirees- the most egregious recent case in Canada. The following is another entry on this subject, this time from an open letter on the part of two labour organizations to the last Finance Ministers' meeting last December. What I found more interesting about the following is the glancing reference as to how Canada's bankruptcy laws can actually be used to not just dodge legitimate debts but even to make money. Now I have always associated 'living off bankruptcy' with the usual low flying scam artist type, but it stands to reason that the high fliers can make money off this as well-in much bigger batches. Here's the story from the online progressive Canadian newsjournal Public Values. People interested in following this issue might consider checking in now and then with the Congress of Union Retirees Canada.

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Unions tell finance ministers of social, economic risks of failing to support retirees:
Companies hiding behind bankruptcy courts to reduce pension benefits.
On the eve of a meeting of federal, provincial and territorial finance ministers' that was held in December in Whitehorse, two groups sent a letter urging them to fix the pension system that is allowing companies that go bankrupt or that are sold to discontinue benefits to retirees.

The letter, signed by Dave Coles, president of the Communications, Energy and Paperworkers Union of Canada (CEC)( CEP Union actually-Molly ), and Don Sproule, national chair of the Nortel Retirees and former employees Protection Canada (NRPC) pointing out the social and economic risks of failing to provide support for seniors while companies hide behind the protection of bankruptcy courts.

"As a result, tens of thousands of pensioners are facing drastic pension benefit reductions. Retirees are particularly vulnerable people as they cannot replace their benefits by re-entering the workforce or further reducing their living costs. Most of them are already living on a tight budget, many are in ill-health and these cuts will drive them into poverty and despair."

The letter expresses concern that pension funds be financed at a solvency level and that the funds should come from the assets of bankrupt companies, not the taxpayer. It further examines how Canada has outdated bankruptcy laws that can sometimes be manipulated by bondholders to trigger failure in order to collect insurance and other payments. As well, they are uncomfortable with the thought of pensioners having to suddenly manage their own pensions in a difficult market.

Before the same meeting, the Professional Institute of the Public Service of Canada (PIPSC) issued a press release stating how they were "appalled" with the C. D. Howe Institute's Pension Paper released in time for the meeting. Fearful of the influence of right wing commentators, PIPSC pointed out how public sector pensions are actually "deferred salary" where members contribute between 8.4 and 10.15 per cent of their annual salary.

David Gray, CGA and vice-president of PIPSC, wrote: "The data presented includes total debts for the public service pensions but only includes the amounts paid in from 2000 forward. It fails to include the $30B paid in by public service employees, or the $62B set aside by the employer as its contribution. Finally it fails to mention the additional $30B pension surplus that was seized by the government in 1999 and used to pay down the national debt."
Links and sources

Full text of CEC/NRPC letter

The Professional Institute of the Public Service of Canada press release

CANADIAN LABOUR:
NORTEL MANAGEMENT SNEAKS AWAY WITH BONUSES:
The arrogance and dishonesty is almost unbelievable. Bonuses paid for driving a company into bankruptcy. Unless, of course, you believe, like Molly does, that managers are a parasitic class who contribute nothing to the production of goods and services and who have replaced the nominal owners of most companies (the shareholders represented by diversified stock in RRSPs and pension funds) as the real "ruling class". If you believe as Molly does then looting a bankrupt corporation is pretty well much par for the course, and thus I am not surprised by the following. Merely disgusted. First, from the Toronto Star is the mainsteam media report on what has happened.
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Ex-Nortel staff slam executive bonuses
Payment in leaked file to keep bosses on board:
Iain Marlow Business Reporter
Nortel Networks Corp. pensioners reacted with disgust on Friday to reports of new lavish bonuses for the company's top executives.





It was yet another blow to Nortel's distressed pensioners, retirees and long-term disabled former employees, who have dealt with financial uncertainty since the former Canadian tech darling declared bankruptcy in January.





"It seems so aberrant, in terms of the executive of the company awarding themselves really, really rich pay raises for doing the job of taking the company apart," said Tony Marsh, who retired from Nortel in 2000 after 30 years.





"Those of us who built the company up, into arguably the world's No. 1 telecom company, could never have dreamed of such riches," Marsh added.





An internal Nortel file "outlines a new compensation scheme for 72 Nortel executives that will see them get a total of $7.5 million U.S. on top of their current salaries in 2009," according to CBC News.





The company has argued that bonuses are necessary to keep executives aboard what is essentially a sinking ship following Nortel's filing for bankruptcy protection and the subsequent selling off of the company's assets. ( Molly would suggest the least educated, experienced and effective accountants in the whole country of Canada as better people "on board" than the past Nortel executives. Wanna argue ? )





Nortel would not comment on details of the plan. It issued a statement saying: "As Nortel works through the highly complex tasks of this restructuring, it is critical to have the right specialist resources in place ... Any steps taken around these individuals has been within the context of a previously approved compensation plan, taken in consultation with the creditor committees, external legal counsel and the Canadian Monitor."





Earlier, former CEO Mike Zafirovski claimed $12.3 million (U.S.) for back pay and bonuses. In March, some 100 executives were awarded $45 million in retention bonuses.





The company's divisions are being auctioned off in a process dragged out by bankruptcy court approvals. Retirees are worried that when Nortel's various global divisions are entirely sold off, they will be stuck with even less than they are now, which is not much, Marsh said.
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Here's what the Canadian Auto Workers (CAW) who have the misfortune of representing the Nortel workers and the pensioners/disabled workers have to say about the subject.

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CAW Condemns Corporate Bonuses at Nortel, while Retirees and Former Workers Left for Broke:
November 27, 2009, 10:55 AM EST
CAW President Ken Lewenza is denouncing the news of more corporate bonuses and salary increases at Nortel Networks Corp, while workers are still fighting to get their due severance, termination pay and pensions.





"This is the worst kind of abuse of corporate power - laying off workers and leaving them with nothing while the executives who drove the company into the ground fill their pockets," said CAW President Ken Lewenza. "This is deplorable and must be stopped."





Lewenza criticized yesterday's Ontario court ruling that Nortel retirees and former employees will not receive the severance or termination pay as set out in their separation packages.





"This is another example of why we need urgent changes to the bankruptcy laws in this country," said Lewenza. "Companies like Nortel can go into bankruptcy protection and eliminate their financial responsibilities towards former workers. In the case of Nortel, it is even more offensive since they are still paying out huge corporate bonuses, while completely ripping off retired or laid-off workers."





"It is exactly this kind of manipulation of the system that plunged the world economy into crisis last fall - it's truly repugnant that we've learned nothing from this experience."





Lewenza said that the union will continue to fight on behalf of the current and former Nortel workers. The union will be ramping up pressure on government to bring about necessary changes to the bankruptcy legislation, which currently sees workers bumped to the end of the line when companies go into bankruptcy. The union is also pressing for a national guaranteed pension fund which would help cover the pensions of workers whose employers go into bankruptcy protection or bankrupt.





In the company's heyday in the mid 1980s, the CAW represented approximately 5,000 Nortel workers in five locations.





The story of a new round of corporate bonuses at Nortel surfaced yesterday through a report by the CBC, who obtained the internal corporate document.