U.S. Markets closed

UPDATE 1-PES layoffs accelerate as Philadelphia refinery closes

By Laila Kearney

(Updates with comments from PES)

By Laila Kearney

Aug 20 (Reuters) - Refiner Philadelphia Energy Solutions is laying off the majority of its unionized workforce on Tuesday and Wednesday, the union's president said, ahead of an initial layoff deadline.

PES began dismissing a small number of union workers last Thursday, before an earlier-stated Aug. 25 termination date, as the company idles its fire-damaged refinery after filing for bankruptcy.

Union employees are expected to be paid through Aug. 25, but the company has so far not offered severance pay or continued health benefits, sources have said.

"I'm concerned about the lack of benefits, and I'm concerned that a whole culture is being wiped out at this refinery," said Ryan O'Callaghan, head of the refinery union. "It's a 24-7 operation and people spend most of their lives working in the refinery."

Roughly 280 of the facility's 640 steelworkers were dismissed on Tuesday, said O'Callaghan, who works as an operator at the plant.

O'Callaghan and a team of negotiators are currently bargaining with PES to retain a crew of union workers trained to run the plant's wastewater system and conduct other work to safeguard the site while it is closed.

An 80-member caretaker force at the PES refinery for up to 18 months was being considered, a source familiar with the company's plans said. However, it was not clear whether they would be union members.

"The refining complex has completed the idling of a majority of the equipment. We are releasing employees this week in accordance with previous announcements," the company said in a statement.

"PES will maintain a caretaker staff at the facility to complete a number of ongoing projects and ensure the safe and environmentally compliant operations at the refinery site."

The company has said it hopes to sell the plant to a buyer that would restart it, but it has not said whether it is in talks with any prospective buyers.

PES entered Chapter 11 bankruptcy on July 21, a month after a fire at the 335,000-barrel-per-day plant destroyed an alkylation unit used in the production of gasoline. The company had emerged from a previous bankruptcy last year.

PES initially said it would dismiss union and non-union employees by mid-July following the fire, but it later extended the employment of the plant's union workers.

The refinery's last crude unit was shut late last month. (Reporting by Laila Kearney in New York, Additional reporting by Erwin Seba in Houston, Editing by Rosalba O'Brien and Cynthia Osterman)