Image by Tumisu from Pixabay

For industry it is thumbs up for the workers to be aid off it is thumbs down. Industry that makes billions does not help workers.

United Steelworkers union members, who make up about half the 500-person workforce at the soon-to-be-shuttered Phillips 66 Alliance refinery near Belle Chasse, have decried the severance terms being offered by the plant’s owner, saying the 16-week cap on layoff pay hits long-serving plant workers particularly hard. The Phillips 66 Company, which is headquartered in Houston, said last month that it had abandoned efforts to sell the refinery after flooding caused by Hurricane Ida meant it would need to spend hundreds of millions of dollars to bring it back into operation. Instead, the company’s managers said they had decided to convert the refinery into an oil storage terminal, which would mean sacking all but a couple dozen of its 500 direct employees, as well as another 470 contractors.

There have been ongoing posts on this topic and this is a classic case of bosses not taking care of their workers. I closed the plant. I terminated your job. Now go away.

The USW has since been negotiating severance for its members to improve on the terms in their current contract, which allows for layoff pay of only between two and four weeks, no matter how long an employee has worked there. Union members will vote on Jan. 3 and 4 on terms that offer pay of four weeks’ severance pay for all those with up to two years employment; eight weeks of pay for those with between two and six years of service; 12 weeks for six-to-eleven years of service; and 16 weeks for those with more than 11 years of employment at the plant. David Delaneuville, the USW representative for District 13, which covers the Alliance refinery, said the terms fall well short of a deal negotiated last year for USW members at Royal Dutch Shell’s Convent plant when it was being shut down. But he said it’s the best they could do under the circumstances. “The agreement is very clear, that if it doesn’t pass (the union vote next week) then it reverts back to what we had in the old contract, which was a max four weeks severance pay,” Delaneuville said. “On top of that, we lose everything else we negotiated, such as seniority (preference for any jobs going at the oil storage terminal or at other Phillips 66 refineries), which would also go back to the original contract,” meaning Phillips 66 could pick and choose who they wanted to retain regardless of employment service.

With the plant closing the union has little to no leverage as these decisions should have been made earlier.

Delaneuville said the union doesn’t have any leverage to press Phillips 66 for more given that the plant is all but shutting down, leaving only about 20 union jobs that will survive once it’s converted to an oil storage facility. “We are just trying to get the best severance we can get to give people time to look for other jobs,” he said. But grumbling among USW workers over the terms of the deal was growing this week, with an email chain circulating among members in which some are calling for a “no” vote at next week’s meeting. “It’s not fair, especially for people who have been there for, say, 25 years and dealing with everything we’ve been dealing with at the plant,” said one hourly wage plant operator who has worked at Alliance for just over 10 years. He didn’t want to be quoted by name in case it would jeopardize payment of his severance package. He noted that the Alliance refinery has been without power since Hurricane Ida, while Phillips 66 has required employees to work overtime shifts shoveling out mud by hand with only portable toilets and few other facilities.

Inequality is the main problem especially when you have worker who have been there for years. How do you reward years of service especially since they are laid off not due to anything other than closing the plant?

The biggest concerns voiced by the USW members over the severance terms was what they described as inequity, especially for longer-serving hourly employees. Non-union salaried workers, such as plant supervisors, have been offered three weeks severance pay for every year worked, with a cap of 60 weeks. That meant there is a huge gap between employees who might be doing broadly similar work and have similar years of service but different classifications. “It’s an insulting offer,” said another Alliance USW member, who has worked there for more than 20 years and who also wanted to remain anonymous. He said that he makes just between $90,000 and $100,000 a year, whereas his supervisor makes about $115,000. But the terms of the severance means that he will get about $28,000 compared to $133,000 for his salaried colleague with the same length of service. “I spent the better part of my life here, between my 30s and my 50s,” he said. “Bob Herman, (head of refining at Phillips 66), came to our site (last month) and said that all employees would be treated fairly. But now they’ve actually stated that they were completely okay with lowering the standards by which Big Oil companies handle severance.”

Comparing this offer with other similar ones doesn’t make the owners look too good.

Shell’s severance deal last year for the Convent refinery workers offered the same terms for hourly and salaried employees. They all received three weeks severance for each year worked, with a minimum of 12 weeks and a maximum of 78 weeks, depending on years with the plant. The deal also didn’t categorize people in wide bands of years served, as the Phillips 66 deal does. The 20-year Alliance refinery veteran said there are only about 20 workers who have worked there as long as he has, which means that the cap at 16 weeks saved a paltry amount for a company with a market value of about $32 billion. A spokesman for the Alliance refinery hadn’t responded to questions about the severance deal by press time. The 10-year refinery veteran said the immediate concern for those losing their jobs now is health insurance coverage, which runs out at the end of February for most terminated workers. “I’m just worried that the severance pay will mostly get eaten up paying for health coverage till I can get another job,” he said.

Health care is a big one. I am so grateful my retirement from the Coast Guard provided me with good health care. The money is nice but the health care is the saving grace. I am sure there will be at least one more story which I have been following.

Let’s add to income inequality – stiff the workers