A union representing Premier Foods plc workers has questioned whether the UK company entered into “meaningful” discussions ahead of its move to close its Birmingham Hovis bakery tomorrow (23 April).
The site will cease manufacturing tomorrow and only a skeleton staff will remain.
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However, John Higgins of the Bakers, Food and Allied Workers Union (BFAWU) suggested the company failed to look at whether the site could continue to operate on a viable basis during the mandatory 90-day worker consultation process.
“Are the consultation periods meaningful? The decision to shut the facility was taken before consultation began and therefore consultation became meaningless,” Higgins told just-food.
“The reason for the closure was given as the loss of The Co-op order, which was worth GBP75m (US$114.6m) over a three-year period. But that only impacted 80 bodies on that site… Was it just down to The Co-op? If it was just the Co-op order surely they could have restructured the shifts and stop using agency workers,” Higgins suggested.
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Last autumn, Premier’s contract to supply own-label bread to UK retailer The Co-operative Group ended. Rival Associated British Foods won the order and will start supplies this week.
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By GlobalDataAccording to the union official, Premier has placed pressure on the workers it has made redundant to sign compromise agreements that say staff will not take legal action against the company.
“They came to the people at the eleventh hour and asked them to sign compromise agreements, or they would lose their enhanced redundancy terms [and] only receive a statutory severance package,” Higgins said. “They have said it draws a line underneath the closure. But what they are trying to protect themselves against? Because these closures are happening very quickly are the consultation periods meaningful?”
Higgins suggested that while the union could take legal action questioning the validity of the closure process, individual employees would be blocked from participating in legal action against the company.
A spokesperson for Premier insisted the closure came amid a range of moves designed to take costs out of the business. The spokesperson added the move is necessary if Premier is to ensure the long-term viability of the bread unit.
“Towards the end of 2012 Premier Foods announced a number of critical steps to assure the long-term future of the bread division. As a consequence, the company made a decision, following consultation, to close its bakery operations in Birmingham,” the spokesperson told just-food.
“Employees affected by the closure will be receiving redundancy terms in excess of statutory requirements. They are also required to sign a compromise agreement. The use of compromise agreements is standard practise right across the business, from top to bottom. It is a way of achieving a degree of finality between the employer and employee and safeguarding the interests of both parties.”
In November, Premier announced plans to close two bakeries – including Birmingham – cut over 100 distribution routes and revamp its logistics operations to cut costs from its bread business.
Earlier today, Premier reported an increase in first-quarter sales. Bread sales were up 0.8%, with Hovis’s market share “broadly unchanged”.
Speaking to analysts after Premier’s sales were announced, CEO Gavin Darby said the company was looking at removing more costs throughout the business.
