June 26, 2014 at 6:09 pm

Detroit's largest city employee union ratifies five-year contract

Detroit — The city’s largest union and several others announced Thursday they have ratified a five-year contract negotiated on the sidelines of Detroit’s bankruptcy case.

The deal between Detroit and the American Federation of State, County and Municipal Employees is expected to include significant wage restorations for 3,500 workers whose wages were frozen in 2010 and slashed by 10 percent two years ago.

The pay hikes may come out of the city’s capital improvements plan. Detroit’s amended reorganization plan scaled back the city’s plan to spend $1.5 billion improving services over 10 years to $1.4 billion.

The deal also was approved by a majority of city unions who joined in a labor coalition.

“Despite the challenges associated with the largest municipal bankruptcy in American history, labor and management have forged a path forward that secures the future for working people and the citizens they serve,” AFSCME Council 25 President Al Garrett said in a statement.

The union contract deal, first announced in April, followed other agreements the city had forged with retiree groups and the city’s pension funds to limit monthly reductions.

The city is trying to line up deals with creditors before a confirmation trial this summer over the feasibility of its restructuring plan and whether its debt reduction proposal is fair and equitable to creditors.

“People worked very hard to reach agreement with the city,” Garrett said. “Now working families can rest easier knowing they enjoy the protections of a negotiated contract in this uncertain period of bankruptcy.”

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