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Safeway sells stores, new contract negotiated.

Safeway sells stores, new contract negotiated

Safeway Stores' efforts to reduce debt resulting from a successful fend-off of a hostile takeover bid in 1986 continued, as the grocery chain completed the sale of its Kansas City division. The final condition of the sale was met when the new owners negotiated an initial labor contract with the United Food and Commercial Workers, the incumbent union. The new owners are a group of former Safeway division managers and a New York City investment firm, Morgan, Lewis, Githens and Ahn. The 66 stores will be operated under the name Food Barn Stores, Inc.

The 3-year accord included some employee "give backs." But, according to the president of the largest of the three local unions, i"the best possible contract we could have gotten under the circumstances." One area of cost reduction was premium pay for work on Sundays, which was reduced to the employee's regular hourly pay rate plus $1, from time-and-one-half All employees will be paid at time-and-one-quarter for working on holidays, down from double-time for meatcutters and time-andone-half for clerks.

Wage rates were frozen for all employees except wrappers, whose rate was cut 74 cents, to $9.50 an hour, and clerks at the top of the pay scale, whose rate was cut 68 cents, to $9 an hour. A union official estimated that the 68-cent cut would affect 500 employees, but 1,500 clerks would benefit by moving up to the new $9 rate. These employees had been receiving less than $9 because they were at the lower end of a two-tier pay system that was abolished under the settlement. Also, the starting rate for clerks was increased to $4.50 from $4.19. Other provisions included:

* Elimination of paid personal leave, which had totaled 3 or 4 days per year.

* Shortening of the time intervals between steps in the pay progression schedule.

* Equalization of the employer's pension financing at 52 cents for all hours worked by all employees. Previously, the rate ranged from 22 cents to 52 cents.

* Requirements that at least 50 percent of all work hours be given to full-time workers and that part-time workers must be assured of a least 20 hours a week.

* Elimination of credits for service with Safeway in determining the duration of paid vacations. However, all employees will receive I week of paid vacation beginning in the first year.

* Retention of credits for service with Safeway in setting work schedules, job bumping, and transfers.

At the time of the settlement, Safeway was also proceeding with plans to sell its Little Rock, AR, division, comprising 51 stores. Earlier, Safeway had sold its Dallas, TX, division, which led the company and the Food and Commercial Workers to adopt a national severance plan providing for benefits to employees losing their jobs as a result of the sale of an entire division. (See Monthly Labor Review, January 1988, p. 35.)
COPYRIGHT 1988 U.S. Bureau of Labor Statistics
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Title Annotation:Developments in Industrial Relations
Author:Ruben, George
Publication:Monthly Labor Review
Date:May 1, 1988
Words:484
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