The dispute has taken place at Kelloggs Memphis cereal facility

The dispute has taken place at Kellogg's Memphis cereal facility

Kellogg has said it is "hopeful" a resolution with unions is "within reach" after a contract dispute at one of its plants in the US resulted in a staff lockout.

A dispute with Kellogg and employees represented by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) began last Tuesday (22 October) when the food giant locked out workers at its Memphis cereal facility.

The union said the dispute arose due to Kellogg wanting to replace "steady, middle-class, full-time jobs with casual, part-time employees who would make significantly lower wages and substandard benefits".

"Kellogg gave its workers in Memphis an ultimatum: agree to our proposals that will decimate your middle-class jobs, or you will be locked out. Why does a highly profitable $14bn company want to replace steady, middle-class jobs with casual, part-time workers?" the BCTGM said.

"This will hurt these working families, the Memphis community, and ultimately, the company."

It is understood the lockout, which has affected around 200 employees, will be lifted once the union agrees to Kellogg's proposal on increased use of casual workers at the plant.

In August, Kellogg announced plans to lay off 37 staff at the Memphis plant amid over-capacity at the facility. The losses were part of plans drawn up earlier this year to axe up to 70 jobs at the site. In June, 33 posts were cut.

A spokesperson for Kellogg said the proposed contract "does not impact current employees' wages and benefits", and would provide "competitive wages for any future hires".

"Regrettably, the union has not agreed to our proposals, the contract expired on 20 October, and the company made the difficult decision to implement a lockout.

"It is frustrating and disappointing to be in this position, but we must carefully consider every aspect of how we do business - including this labor contract - to help ensure our long-term viability. We are hopeful that an agreement remains within reach, and remain available to meet with the union."

No agreement between Kellogg and the union has been agreed to date.