As one Alberta labour dispute is being diffused by handshakes over a negotiating table, another potentially more explosive confrontation has been ignited.

And the slaughterhouse strike in Brooks could inflict serious collateral damage on local businesses and the beef industry from across the province, observers say.

Unionized employees from Lakeside Packers in Brooks last week traded in their meat cleavers and power saws for picket signs after the two sides failed to hammer out a new contract.

"It's definitely going to filter down to every business," says Kimberley Sharkey, president of the Brooks & District Chamber of Commerce.

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"There're both sides of it: The farmers and the ranchers who are involved in bringing their product to Lakeside on the one side; on the other side obviously are the employees who bring home their paycheques and who spend their paycheques in our community - no one wins."

The strike - which is already provoking heated picket-line confrontations and orders from the provincial Labour Relations Board - comes on the heels of a tentative agreement struck between Telus Corp. and the Telecommunications Workers Union (TWU) early last week.

In the Lakeside dispute, the small city of 12,000 is bracing itself for a long and bitter strike, and Sharkey predicts few in the community will remain unscathed.

Alberta Beef Producers vice-chairman Erik Butters says a walkout at one of Alberta's largest packing plants is the last thing the cattle industry needs as it struggles to recover from the effects of the two-year U.S. border closure following the mad-cow crisis.

"We just got back in business again over the last couple months and for a labour disruption to come along now - it's not an opportune time for us," says Butters, a Cochrane-area rancher. "Lakeside handles about 40 per cent of the processing in Alberta. We need them hitting on all cylinders."

Things could be worse, Butters concedes. He says the industry is better able to handle the loss than it would have been before the border closure due to new packing capacity that has come onstream since 2003.

Doug O'Halloran, president of the United Food and Commercial Workers Local 401 (UFCW), says the last thing the union wants to do is hurt the cattle industry. He blames U.S.-based plant owner Tyson Foods after the company rejected an arbitrated proposal from an Alberta government-appointed mediator earlier this month.

The arbitrator recommended a raise of $1.45 an hour over a 42-month period, a $100 annual boot allowance and two 15-minute coffee breaks during a regular shift, along with suggestions for worker benefits. Employees currently make between $12 and $15 per hour.

"We accepted the (arbitrator's) report - which we didn't like, but which we thought was best for the industry, all the ranchers and farmers, the workers and the company," O'Halloran says. "We thought we were being fair in accepting that even though it certainly wasn't a Cadillac and it didn't address all of our concerns."

The UFCW subsequently dismissed what the company called a "modified labour contract" because it fell far short of the union's demands and smacked of union busting, O'Halloran says.

Tyson Foods spokesman Gary Mickelson said last week that 1,000 employees showed up on the first day of the strike wanting to work.

The company says it is determined to keep the plant going with whatever staff cross the picket line, and late last week was considering shipping cattle to Tyson-owned plants in the U.S.

Allen Ponak, a professor of industrial relations at the University of Calgary's Haskayne School of Business, says in some ways it's a surprise the two parties couldn't reach an agreement because "they weren't that far apart."

Ponak adds, however, that both sides have much to gain and a lot to lose. For the UFCW, it's the first contract with Tyson Foods, making it important to give the recently unionized workforce the best bang for its buck; for the company it could represent an opportunity to strike a blow against the union.

"It could turn ugly," Ponak says. "It's in a small community, you have emotions that are running high, it's a first contract, which is always difficult as the union is trying to establish itself, and the company maybe thinking that ... if there's a work stoppage maybe people will tire of the union and it will go away."

O'Halloran tries to allay widespread fears that the strikers will become violent. He adds, though, he cannot speak for the company. "You're not going to see any violence from our side. We're going to picket peacefully and we hope the employer will not try to run the picket line with buses."

The Alberta Labour Relations Board has issued a ruling that limits the number of pickets at any one time to 50 and has ordered the strikers not to physically touch or impede any vehicles entering or leaving the jobsite.

The day the strike began some strikers reported minor injuries after a bus driven by a manager tried to enter the Lakeside plant where 2,100 workers are employed.

Meanwhile, officials from Telus and the TWU are looking to pick up the pieces following five years of contract negotiations and a three-month labour dispute that ended with a tentative deal. Union members will vote on the proposed contract by Oct. 23.

The package concludes a five-year process of merging six separate collective agreements into one at the Vancouver-area company, which had merged separate predecessor companies Telus and BC Tel into what is now the biggest phone operator in Western Canada.

The deal covers a national bargaining unit of about 14,000 employees, predominantly located in British Columbia and Alberta. The two sides say the tentative contract provides Telus and its workers the flexibility the company has sought to compete more effectively against bigger rival Bell Canada and other competitors.

The two sides have imposed a media blackout and will not comment on details of the deal until after the vote, but in a joint press release both the company and union called the deal a collective and constructive way forward.

"Together, we were able to negotiate an agreement that benefits Telus, our team members, our customers and our investors," said Darren Entwistle, president and CEO of the company. "It is my hope and desire that this marks the beginning of a positive and co-operative relationship.

"Reaching an agreement has been a long and complex process, but I am convinced the outcome will help enshrine the future success of Telus and our team. We now have a significant opportunity to move forward with an agreement that recognizes our team members' tremendous contributions and provides Telus with the flexibility needed to continue our leadership position in a highly-competitive market."

Bruce Bell, president of the union, said the agreement is also good for unionized workers at the company.

"We are pleased that we have been able to reach a negotiated tentative agreement that we feel is good for our members," he said. "Their support has allowed us to work hard on their behalf throughout this difficult period."

Telus says it expects to bring back workers who have been off the job within three days after the new contract is ratified.

The U of C's Ponak says that while it is difficult to analyse who came out ahead without seeing the final agreement, he believes both the TWU and Telus were motivated to make a deal.

"Both sides were hurting," says Ponak. "Telus continued to operate, but they were having some problem as the business conditions changed and they need to expand into new areas. The absence of the regular experienced staff was starting to bite."

Ponak adds that the company may have to take measures to deal with any ill will that can arise from bitter labour disputes, especially ones where the company continues to operate.

"Things can be said in the heat of the battle, so it may not be just straight 'business as usual.' There are ways to go forward productively and taking steps to deal with things in advance."

- with files from The Canadian Press (John Ludwick can be reached at ludwick@businessedge.ca)