Davie and union agree on five-year labor deal

Raphaël Jobin, President of the CSN (left) and Jared Newcombe, CEO of Davie Raphaël Jobin, President of the CSN (left) and Jared Newcombe, CEO of Davie

JULY 25, 2016 —  Canadian shipbuilder Chantier Davie Canada, Inc., Levis, Quebec, and its labor union agreed a new 5-year collective agreement on July 22.

The news comes after the failure, earlier this month, of negotiations on an interim 18-month collective agreement that would allow the shipbuilder to meet the conditions of participation in upcoming Canadian Federal government contract programs. The interim agreement was rejected by 91 percent of the workforce, with trade union CSN (Confédération des Syndicats Nationaux) saying that they felt "insulted" by the offer.

In contrast, agreement in principle on the new five year offer was adopted with 61.3% of members voting in its favor, says  the union.

Raphaël Jobin, President of the CSN said the new agreement "includes several gains for members and allow the site to bid on federal government contracts, including one for the refit of the icebreaker Pierre Radisson."

Davie says that the new agreement not only provides a solution to the immediate needs of the company, but also ensures that Canada's largest shipbuilder can maintain its competitive edge both domestically and internationally throughout the long-term.

"Our people have spoken," said Jared Newcombe, Davie's CEO. "They made it clear what they wanted and we listened. They want a long-term, stable future for themselves, their families, the local community and the business. And they understand that means ensuring Davie can maintain itself as the most competitive, flexible and most efficient shipbuilder in this country. That is exactly what we have agreed to today. We have a common cause and we will pursue it together as one team whereby all of Davie's stakeholders will benefit from the future success of the company."

"This is a win-win situation," said Alan Bowen, Davie's Chairman."We will maintain the flexibility and manufacturing productivity that has, to a large degree, made Davie so successful since we acquired the business in 2012 and our people get to share in our future success. We went in hoping for a minimum of 18 months and we came out with a full collective agreement ensuring labor stability for the next five years. I am proud of everyone involved. Davie has never been stronger in its collective resolve to win new contracts from our number one client, the government of Canada."

Highlights of the new agreement, according to Davie, are:

  • Davie's initial proposal involved a 4.5% salary increase within a 12 month period. The salary will be increased by 5% over the next 12 months and will increase by 2% each year throughout the period of the agreement. Davie's labor rates will remain as the most competitive of all Canadian shipbuilders ensuring it can continue to undercut others on fixed price contracts. As well as Davie's workers sharing in the company's future success in terms of salary, the company will continue to provide further perks outside of the collective agreement to recognize their superior workmanship.
  • Night shifts will consist of four, ten-hour shifts per week instead of five, eight-hour shifts. This will continue to increase Davie's productivity while providing its night workers with more quality family time.
  • Trade flexibility is maintained as per the status quo. Davie says it has the most trade flexibility of any shipbuilder in Canada, meaning that performance during working hours is optimized, contributing to an overall greater efficiency.
  • The ability to sub-contract work is maintained, allowing the company to compete effectively in terms of cost, technology, innovation and efficiency.Under the new collective agreement, the company will provide for a progressive retirement for senior employees, allowing for the recruitment, training and mentoring of Davie's next generation of shipbuilders. Senior employees will also receive greater vacation allowances.

The union's comment on the agreement, in French, is available HERE

Want more? Subscribe now!

News from NASDAQ