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U.S. rail strike averted after Joe Biden signs bill blocking job action

WATCH: "Catastrophic" US rail strike averted after Biden signs bill blocking job action

President Joe Biden signed legislation Friday to block a national U.S. railroad strike that could have devastated the American economy.

The U.S. Senate voted 80 to 15 on Thursday to impose a tentative contract deal reached in September on a dozen unions representing 115,000 workers, who could have gone on strike on Dec. 9. But the Senate failed to approve a measure that would have provided paid sick days to railroad workers.

Eight of 12 unions had ratified the deal. But some labour leaders have criticized Biden, a self-described friend of labour, for asking Congress to impose a contract that workers in four unions have rejected over its lack of paid sick leave.
Click to play video: 'Imperative for tentative agreement to go into effect amid U.S. rail strike: Transportation Secretary Buttigieg'
Imperative for tentative agreement to go into effect amid U.S. rail strike: Transportation Secretary Buttigieg

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Railroads have slashed labour and other costs to bolster profits in recent years, and have been fiercely opposed to adding paid sick time that would require them to hire more staff.

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A rail strike could have frozen almost 30 per cent of U.S. cargo shipments by weight, stoked already surging inflation, cost the American economy as much as US$2 billion a day, and stranded millions of rail passengers.

There are no paid short-term sick days under the tentative deal after unions asked for 15 and railroads settled on one personal day.

Click to play video: 'Biden has spoken to lawmakers about a possible rail strike: White House'
Biden has spoken to lawmakers about a possible rail strike: White House

Teamsters President Sean O’Brien harshly criticized the Senate vote on sick leave. “Rail carriers make record profits. Rail workers get zero paid sick days. Is this OK? Paid sick leave is a basic human right. This system is failing,” O’Brien wrote on Twitter.

Congress invoked its sweeping powers to block strikes involving transportation – authority it does not have in other labour disputes.

The contract that will take effect with Biden’s signature includes a 24 per cent compounded pay increase over five years and five annual US$1,000 lump-sum payments.

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American Association of Railroads CEO Ian Jefferies said “none of the parties achieved everything they advocated for” but added, “without a doubt, there is more to be done to further address our employees’ work-life balance concerns.”

Without the legislation, rail workers could have gone out next week, but the impacts would be felt as soon as this weekend as railroads stopped accepting hazardous materials shipments and commuter railroads began canceling passenger service.

The contracts cover workers at carriers including Union Pacific, Berkshire Hathaway Inc’s BNSF, CSX, Norfolk Southern Corp and Kansas City Southern.

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