Talk about a public relations blunder – a decision by a Newfoundland and Labrador company is putting hundreds of seniors at risk.
American-based Cliffs Natural Resources is discontinuing health and life insurance benefits for hundreds of pensioners in Labrador.
Estimates say between 700 and 800 retirees, going back over several generations of workers have been paying into the benefit program for a half-century.
"It's going to put some people in very difficult positions," Jason Penney, outgoing president of Local 6285 of the USW in Wabush, said to the CBC.
Cliffs’ Canadian assets have been in trouble recently, with the company beginning debt restructuring under the Companies' Creditors Arrangement Act.
On June 1, the benefits will end, leaving many scrambling to find alternative coverage and fill prescriptions. The plan also had a death benefit that paid out between $10,000 and $12,500.
But the union is considering a legal challenge. Penney said he’s not confident of a favourable outcome because creditor protection "laws in Canada allow workers to be the last ones on the list."
The outgoing president also pointed out the injustice that although the company is succeeding in the States, since Cliffs’ Canadian subsidiary is going bankrupt, the pensioners are the ones to suffer.
"If the parent company is still operating, they should have to pay their obligations," Penney said to the CBC.