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B.C. mill workers still fighting for wages 3 years after cyberattack hit payroll system

Unions representing hundreds of paper mill workers in British Columbia are fighting to resolve payment issues three years after a cyberattack compromised the system that kept track of workers' pay, court documents show.

Several unions for workers at mills in Crofton, Port Alberni, and Powell River sought out a B.C. Supreme Court order this month to force Paper Excellence Canada to pay employees wages they've missed since the hack in February 2020.

Crofton is about 75 kilometres north of Victoria and Port Alberni, also on Vancouver Island, is about 195 kilometres northwest of the capital. Powell River is about 170 kilometres northwest of Vancouver.

"The parties all agree that this issue ... has gone on too long without a complete solution and understand there has been an impact on employees, union executives and employer staff," read an arbitration decision over the issue in late 2021.

The court filing is the latest step in a three-year fight between the unions and one of the country's leading paper and pulp exporters. The unions have gone to court because Paper Excellence has not remedied the payroll problems, despite an arbitrator ordering the company to do so more than a year ago.

Neither the unions nor the company responded to a request for comment.

Hackers locked company out of old payroll system

Mill workers' pay was first disrupted when hackers infiltrated Paper Excellence's IT systems on Feb. 24, 2020. The attack affected the company's online communications and software systems, down to its email system.

Hackers encrypted servers hosting the payroll system -- called HSI -- and locked the company out.

Paper Excellence "had to rapidly" switch over to a different payroll system, documents said. The company settled on a program called PGI, but unions said vital payroll information was lost in the migration.

"Because of the differences between the PGI and HSI systems, there were a high number of errors in payroll following PGI's implementation," the arbitration decision said.

The unions brought the issue before an arbitrator in 2021 after the problems persisted.

In a decision on Oct. 22, 2021, arbitrator Ken Saunders found Paper Excellence missed its obligations to pay employees accurately and on time under collective agreements.

The decision ordered the company to fix the errors and pay workers what they were owed, including their wages, pension contributions, vacation accruals, sick pay and other compensation.

Paper Excellence was also ordered to compensate any employee who brought forward proof of financial suffering as a result of the payroll problems, including interest payments or out-of-pocket expenses caused by the issues.

The arbitrator also said the company should pay employees general damages for "harm and frustration" they've experienced since 2020, but did not settle on an amount.

Since the hack, operations at the mills in Crofton and Powell River have been curtailed indefinitely as the company cited ongoing financial issues. The mill in Port Alberni switched from producing paper products to manufacturing food packaging in 2021.

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