Locked-out longshoremen walked a picket line at the Port of Montreal on Monday. (Ryan Remiorz/Canadian Press)Unionized longshoremen locked out of Montreal's port are demanding an end to a labour dispute that has paralyzed the shipment of goods into the city.

Commercial operations at the Port of Montreal came to a halt Monday morning after the Maritime Employers Association locked out 850 longshoremen in an ongoing labour dispute over a new collective agreement.

The lockout means no commercial activity for the port until further notice – except for the grain silos, run by the port authority itself. The longshoremen were notified of the association's move late Sunday evening, and were on picket lines early Monday morning in advance of the 8 a.m. lockout deadline.

Representatives with the Longshoremen's Union (Local 375) said they were baffled by the lockout, which they called "incomprehensible and useless."

"We think that we've been fooled by the employer," said union representative Michel Murray. "It's a shame, because we are supposed to negotiate, and we hope it's not a piece of theatre by the employers to close the door and say, 'Look what happened at the port of Montreal'."

Standby wages under dispute

At the heart of dispute is the question of income security. Workers are paid full time to be on standby when there is no ship ready to unload. But, the employer's association has decided to put an end to that practice for the 169 longshoremen with the least seniority, Murray told a news conference on Monday.

In response to the move, Murray said the longshoremen stopped working overtime.

'You need to have people waiting just in case you need them, but the amount of people we have now [waiting] is way too much for the activity there is.'—'Gilles Corriveau, Maritime Employers Association

He said the revenue security clause had been in effect for the past 30 years and costs the Maritime Employers Association between $5 million and $7 million per year.

In return, the longshoremen are available to work "24/7, 365 days a year," said Murray. "It is like a fireman. When a fire appears, you are here to combat the fire."

On Sunday evening, Murray said the union had agreed to put a stop to pressure tactics for the next two weeks. He said the association had confirmed it would be ready to respond to the union's latest offer later this week.

"We never quit the [bargaining] table," he said. The longshoremen haven't had a contract since Dec. 31, 2008.

Ships expected to dock in Montreal are being rerouted to other ports. (CBC)The association defended its lockout by saying the labour dispute was starting to impede port operations. The union's decision to stop working overtime on July 9 was "intolerable," said spokesman Gilles Corriveau.

Job and revenue security costs the association more than $10 million a year, and that there are now too many workers on call that aren't doing any work, he added.

"This is a measure we cannot accept any more because it blows the fees way out of proportion. You need to have people waiting just in case you need them, but the amount of people we have now [waiting] is way too much for the activity there is."

Corriveau also said the lockout is costing the port millions of dollars, with containers still waiting to be unloaded. In the meantime, ships that haven't docked are being redirected to other Canadian and U.S. ports.

Companies which rely on the Port of Montreal, including Ikea and Quebec's liquor board (SAQ), said they were not immediately concerned about the effect of the lockout as they have sufficiently stocked warehouses.

CN Rail spokeswoman Julie Senécal said the railway wouldn't disclose the financial impact of the lockout, or the specific content of its containers. But she did say "all kinds of merchandise" would be included in the containers. There were no CN trains going in or out of the port on Monday morning, Senécal said.

"We're monitoring the situation very closely and working with the port," she said.

The Longshoremen's Union is part of the Canadian Union of Public Employees.

With files from The Canadian Press