Premium Brands Inc. (Toronto: FFF) Vice President George Paleologou today confirmed that the 400 hourly employees at its Vancouver processing plant were locked out at 8:00 a.m. Saturday, August 19, 2000.

The lockout follows a “no” vote from the union employees (local 1518 of the Union of Food and Commercial Workers (UFCW)) to the company’s final vote offer of a new wage scale comparable to those introduced at Premium Brands’ major competitors.

Paleologou explained that a series of contracts negotiated in the past two years by the national UFCW with much larger competitors has created a new industry standard wage scale that has left the Vancouver operation uncompetitive.

“Premium Brands needs a level playing field,” he said. “Our Vancouver operation simply cannot deliver product at competitive prices in the marketplace when other plants have a 25 per cent advantage in labour costs.”

The company’s final offer proposed to raise the hourly Start Rate from $8.00 to $9.50 and lower the Base Rate for non-specialized workers from $16.50 to $10.00, in line with the rates negotiated for similar work by the UFCW at the other major competitive Canadian facilities.

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The company said that the rejection of this final offer — at the local UFCW’s recommendation — left it with no choice at this point except a lockout because the Vancouver plant cannot continue to compete in the marketplace under the terms of the current contract.

According to Paleologou, the company’s proposal is designed to preserve the jobs of all current employees.

“We sincerely regret the necessity of taking this step,” he said. “We value our employees, we are proud of our 80-year record of stoppage-free labour relations, and we realize that wage reductions are painful. But without them, there will be no jobs at all in Vancouver.”

The company said the Vancouver plant will not re-open until a contract is reached that will allow the plant to operate competitively. Impact on customers will be kept to a minimum through arrangements with a combination of Premium Brands’ other 12 plants outside British Columbia and a number of other processors.

“We can and will maintain our products on the grocery store shelves, regardless of how long this shutdown continues,” said Paleologou.

“We hope the lockout will give our employees the opportunity to consider what is in their best long-term interests, and we urge the UFCW to show leadership in helping this facility manage the competitive challenges that it helped to create.”

Premium Brands Inc. has been engaged in the food processing business since 1917 and has manufacturing facilities in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Washington and Oregon.