Verizon Communications and its unions announced last night that they had reached agreement on a tentative contract that includes a one-year wage freeze and retains strong job security protections that the company had sought to weaken.þþVerizon's two main unions boasted that they had achieved major victories on job security and health insurance, having beaten back Verizon's efforts to make its unionized workers pay significantly more toward their health coverage.þþWith the unions focusing on job security as their No. 1 issue, Verizon failed in its push to ease or eliminate provisions that make it hard for Verizon, the nation's largest telephone company, to lay off or involuntarily transfer any of its 78,000 current unionized workers in the Northeast. In a concession to Verizon, the unions agreed that new hires would not be covered by the job security provisions.þþExecutives at Verizon had repeatedly argued that they needed more flexibility to reduce their work force because of competition, the slump in the telecommunications industry and the decline in land-based phone service. þþÿThis settlement achieves our major goals of protecting our members' job security and the health care benefits of both active and retired employees,ÿ said Morton Bahr, president of Verizon's largest union, the Communications Workers of America. ÿIt's a victory for our communities, too, by preserving good hometown jobs.ÿþþOfficials at Verizon asserted that the contract would go far to keep the company competitive. They said that the wage freeze and a series of modest changes in health coverage would save the company $1 billion during the five-year deal.þþÿThis is a good deal for everyone,ÿ said Lawrence T. Babbio, Verizon's vice chairman. ÿWe met our employees' needs, helped the company control its costs and gave everyone five years of stability.ÿþþOfficials involved in the negotiations said that in the first year the workers would receive a one-time payment averaging $1,600, equal to 3 percent of annual pay. In addition, unionized employees will receive annual 2 percent raises in the last four years of the deal, as well as modest cost-of-living increases that union officials said could add another 2 percent in wages by the end of the contract.þþThe agreement was reached more than a month after the old contract expired and after the unions had threatened a walkout that would have disrupted phone repairs and installations for thousands of customers. The agreement covers workers in Verizon's territory in 13 states and Washington.þþOfficials at the company said that they expected the contract to have little effect on phone rates.þþMr. Babbio said that with the wage freeze, the other modest wage increases and the saving in health coverage, the contract would increase Verizon's costs by an average of $240 million each year, considerably less than what he said was the $570 million annual cost of the three-year contract that just expired.þþVerizon reached the agreement after weeks of intense talks in Washington with the Communications Workers of America and the company's other main union, the International Brotherhood of Electrical Workers. The nation's top mediator, Peter Hurtgen, director of the Federal Mediation and Conciliation Service, was involved in the talks for more than a month.þþThroughout the talks, Verizon executives had insisted that with health costs soaring, its employees should pay more than the 5 percent to 6 percent of health care costs they were paying under the old contract. Under the new agreement, the unionized workers will pay slightly more for co-payments and deductibles, but these officials said unionized employees would still pay only about 6 percent of their health costs.þþThe new agreement, like the old one, will not require unionized employees or retirees to pay any premiums for their health insurance. Under the new agreement, when the spouse of a unionized worker earns more than $25,000 a year, the spouse will have to pay a $40 monthly premium for Verizon health insurance, unless the spouse already pays more than $75 a month for health insurance premiums.þþBut officials close to the negotiations said the company had achieved some of its goals.þþTo save money, Verizon gained more freedom to negotiate with health care providers to overhaul plans or otherwise reduce costs. Company officials said that provision, along with the higher co-payments and deductibles, would save $500 million. They said the freeze in base pay in the first year, which would lower the wage base in later years, would save Verizon another $500 million during the contract.þþSalaries for unionized operators and technicians under the old contract generally were $45,000 to $60,000 a year.þþThe agreement gives Verizon the go-ahead to begin an aggressive buyout program aimed at encouraging several thousand unionized workers to retire.þþIn fighting any dilution of job protections, union officials noted that the company had been able to cut its unionized work force by 15,000 over the last three years through buyouts and attrition.þþBoth sides acknowledged last night that an arbitrator's decision in July greatly undercut Verizon's efforts to weaken the job security provisions. The arbitrator ordered Verizon to rehire 2,300 unionized workers, ruling that the company had violated a contractual provision that barred layoffs unless they were tied to an external event that directly reduced the need for employees. An example of such an external event would be a regulatory change that forced Verizon to abandon a line of business. The arbitrator ruled the layoffs were mere cost-cutting measures and not tied to an external event.þþWith the contract expiring Aug. 3 and with the company rehiring those 2,300 workers on July 30, it was awkward, officials on both sides said, for Verizon to argue that it needed contractual flexibility to lay those same workers off again. þþThus, officials in the negotiations said, Verizon changed its focus from easing job security protections to finding ways to cut the contract's overall costs. Several officials said that even before the Aug. 3 strike deadline, the company had agreed to retain the job security provisions and the union had agreed to the first-year wage freeze.þþVerizon officials said they expected to hire several thousand workers over the next five years, and since those employees would not have job security, Verizon would have more flexibility than before to lay off workers and adjust its work force. þþA major snag was negotiating an agreement for 51 unionized technicians at Verizon Wireless, an entity owned 55 percent by Verizon Communications and 45 percent by Vodafone, based in Britain. The communications workers were eager to obtain a contract that would impress more than 20,000 Verizon Wireless workers the union wants to organize.þþLast Tuesday, after several weeks of intense talks, Verizon Wireless and the communications workers reached an agreement for the 51 technicians, but only after the company abandoned its opposition to using seniority rights as a basis for layoffs and rehiring.þþThe new contract does not achieve the unions' goal of getting Verizon Wireless to pledge not to oppose future unionization efforts at its operation. Union officials said that the company's insistence on retaining the right to fight unionization there set a bad tone over the negotiations.þþUnder the accord, the sides will hold discussions every April, joined by Mr. Hurtgen, the mediator, to address wages and the company's concerns about easing job security provisions.þþ
Source: NY Times
