A key element in the proposed contract is a “stabilization agreement,” which gives Save Mart temporary labor-cost reductions to assist it “in its current economic challenges,” the union said in the joint statement.
According to Henneberry, the stabilization agreement “creates an atmosphere in which Save Mart can become more competitive and have a chance to get back its place in the market.”
He said it also includes a provision not to bump up the company’s contribution to the health and welfare plan until next January.
Henneberry told SN the stabilization agreement will remain in place until Aug. 10, 2014, though the full contract will expire on Oct. 12, 2013. “That will give us the ability to look at the impact of the stabilization agreement on the market and re-negotiate new contract language,” he explained.
He said Safeway is working to negotiate a longer-term contract “because it has a stronger market position and wants to get its costs locked in for a longer period.”
However, when the union renegotiates with Save Mart in 2013, the subsequent contract would probably expire simultaneously with the Safeway contract, he noted.
Commenting on the tentative contract, Steve Junquiero, president and chief operating officer of Save Mart, said, “We believe this agreement will allow us to be more competitive in the retail food market while providing enhanced job security and additional hours to our associates.
“We also believe that, with this agreement, we can intensify our focus on the needs of our customers while remaining vigilant in working toward managing costs and growing sales.”
The agreement with Save Mart was disclosed the day after the date the two sides had set a week earlier as the final deadline for reaching an agreement — a contract extension that followed a vote by Save Mart employees to authorize a strike. The last few days of bargaining were overseen by a federal mediator.
At the time the deadline was set, the union said Save Mart had agreed to a three-point process for reaching a settlement, which included an audit to justify the company’s claims of need of financial relief; instruction to accountants and actuaries to establish a projected cost structure for labor costs based on the audit findings; and the empowering of the union and employer bargaining committees to structure a stabilization agreement and to allow the union the discretion to design an overall health and welfare plan.