CANADA SAFEWAY, OVERWAITEA REOPEN

JENNIFER L. BALJKO

VANCOUVER, B.C. -- Canada Safeway, Calgary, Alberta, and Overwaitea Food Group, Langley, British Columbia, reopened their stores here last week after striking union members accepted a new two-year contract.

Ratification, though, did not come easy. While members of the United Food and Commercial Workers Local 1518, which represents about 12,000 Safeway and Overwaitea retail clerks, approved a tentative agreement July 5, their counterparts -- the Safeway meatcutters of UFCW Local 2000 -- narrowly defeated the proposal.

The rejection forced Safeway and Local 2000 back to the bargaining table, where they reached a resolution on some grievance and severance pay matters early last week, union and company officials said. With those changes in place, Local 2000 approved the accord in an 84% vote and employees at 86 Safeway stores returned to work on July 10. The 49 Overwaitea stores opened July 7 following ratification by their clerks and meatcutters, company officials reported. The stores closed May 31 when the chains ordered a provincewide employee lockout. The lockout followed a strike notice the unions issued for the Vancouver stores. After weeks of stalled negotiations, Canada's Assistant Deputy Minister of Labor Don Cott stepped in to act as facilitator, and a tentative settlement was reached July 1.

Although the contract is a status quo extension of the existing pact that expired on March 31, Safeway officials said they will have to address the issue of cost reductions in the future or face the possibility of liquidating assets in the province. "We have said that we do need cost reductions for our business to remain viable in British Columbia. Obviously, we did not get that in this contract, but it is still something we still need to look at," Linda "Toby" Oswald, Canada Safeway's vice president of public and government affairs, told SN. "In the future, we will have to address the cost disparities that exist between us and nonunion stores and stores with substandard contracts. Hopefully with this two-year leeway, there may be a chance to work out those issues."

The threat of liquidation, announced late last month by Safeway, may have influenced the contract's ratification, according to officials on both sides. "I think that once we sent out a release that said we would consider liquidation, it sent a message to employees that this may be a reality, where previously they may have thought it was just a tactic, which it wasn't," said Oswald.

Though he could not be reached for comment, Leif Hansen, president of Local 2000, said in a statement, "Safeway's threat to liquidate its B.C. stores became a significant factor. They have done it in several U.S. Divisions.

"Given those circumstances the union negotiating committee is recommending acceptance of Mr. Don Cott's recommended settlement," he added.