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Grocery store settlements.

Grocery store settlements

Four supermarket chains settled with the United Food and Commercial Workers for 23,000 workers at 400 stores in New Jersey and upstate New York. The chains are Pathmark, Grand Union, Shop-Rite, and Foodtown.

Weekly wage rates were increased by a total of $60 a week for full-time workers over the term, bringing the minimum to $495 in April 1988. Part-time employees received total increases of $1 an hour, bringing their maximum rate to $7.50.

The pension calculation rate was increased by $3 a month for each year of service which, with a $2 increase initiated by fund trustees in July 1986, brought the rate to $25. The employers agreed to increase their pension financing from the current $43 a month per worker to as much as $47 in the last year of the contract, if necessary to maintain benefits. Employer financing of pensions for part-time employees will go from $14.33 a month to $15.67, if necessary.

Health insurance was revised to permit employees to continue coverage into retirement if they pay the full cost. Beginning at age 62, their new benefits will consist of Blue Cross/Blue Shield coverage, major medical, a medicare supplement, a prescription drug plan, vision care up to $40 a year, and preventive dental care up to $100 a year. Retirees will pay half the cost from age 62 through 72, and the full cost beginning at age 73. Previously, employers fully paid the lifetime cost of somewhat different coverage for employees who retired prior to June 1, 1984, after at least 15 years of service or retired on or after June 1, 1984, at age 55 or later with age and service totaling at least 77.

Elsewhere, members of United Food and Commercial Workers Local 400 employed by Safeway stores in the Richmond, VA, area agreed to pay cuts in return for a company pledge to continue operating at least 20 of its 48 stores in the area. The contract, which runs to June 2, 1990, specifies that if any of the 20 stores are sold, Safeway must require the new owners to retain the employees, recognize the union, and operate under the contract terms. If more than two of the stores are closed rather than sold, terminated employees will receive severance pay of up to $2,000 for full-timers and up to $800 for part-timers. These protections do not apply to 28 other stores, and a union official said he expected that about half of them would be closed. Shortly before the employee ratification vote, Safeway announced the definite closing of five of the stores. Earlier this year, Safeway closed its Richmond warehouse.

The wage cut ranged up to $2.71 an hour and was expected to affect about one-third of the employees in the stores that remained open. The cut applied to senior employees only, and when combined with wage freezes or increases to junior employees, is expected to eliminate a two-tier pay system.

Other terms eliminated two paid personal holidays and cut paid vacation by 1 week for employees with at least 3 years of service. Employees at the top pay scale for their job will participate, on a store-by-store basis, in a new bonus incentive plan similar to one already in effect at Safeway stores elsewhere in the State.

Safeway's sale and closing of stores and entire divisions in various States result from its efforts to pay off a $4.1 billion debt it incurred in 1986 to prevent an unfriendly takeover attempt.

In Utah, 3,100 former Safeway employees were covered by a settlement between the United Food and Commercial Workers and Borman's Inc., which purchased the 34 stores in April 1987. The sale also included 26 stores in Idaho, Nevada, Oregon, Utah, and Wyoming, but the 3-year labor contract only applies to the 3,100 workers in Utah, represented by Local 711.

From the employees' view, the most important part of the new contract is a provision guaranteeing them credit for the service they had accrued as Safeway employees. Existing health, welfare, and pension benefits also were retained.

From Borman's view, the most important provision was a wage cut of 50 cents to $2.05 an hour, fulfilling a stipulation that the purchase of the Utah operations was contingent on achieving "substantial labor savings.' For food clerks, the cut was $1.86, bringing their hourly rate to $8.25; for meatcutters, the cut was 50 cents, bringing their rate to $11.18. Grocery and bakery department managers took the largest reduction, $2.05 an hour, bringing their rate to $8.75.

The employees may regain some of the lost wages under a new bonus plan linked to gross sales in the stores, now named Farmer Jack. The plan was similar to one at Borman's Farmer Jack stores in Michigan and Ohio.
COPYRIGHT 1987 U.S. Bureau of Labor Statistics
No portion of this article can be reproduced without the express written permission from the copyright holder.
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Publication:Monthly Labor Review
Date:Aug 1, 1987
Words:809
Previous Article:Are the media shortchanging organized labor?
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