Kellogg, provisional labor agreement for access to unions

Kellogg, provisional labor agreement for access to unions

One major point of contention has been the company’s two-tiered wage system, where workers are divided into “transitional” and “legacy” employees, the latter earning higher wages and receiving better retirement benefits.

Grain creator Kellogg Co. (K) said it has reached a tentative agreement with the association for a new five-year labor contract. Kellogg and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union are engaged in negotiations to conclude a master labor contract for its four U.S. Prepared to Eat Cereal or RTEC plants. The tentative agreement covers 1,400 employees at the organization’s U.S. cereal plants in Battle Creek, Michigan, Lancaster, Pennsylvania, Memphis, Tennessee, and Omaha, Nebraska. The strike started Oct. 5 after the expiration on the one-year expansion of the past master contract.

“Among other things, the tentative agreement includes an accelerated, defined path to legacy wages and benefits for transitional employees, and wage increases and enhanced benefits for all,” Kellogg’s spokesperson Kris Bahner said in a release.

The Federal Mediation and Conciliation Service assisted in negotiations.

The tentative agreement includes:

• All employees with four or more years of service graduate to legacy wages and benefits upon ratification. Each year of the contract, transitional workers graduate at the rate of 3% of the plant’s headcount.

• Wage increases for all, including 3% upon ratification for legacy employees and increases for transitional employees.

• Increased pension multiplier for legacy employees.

• Enhanced benefits for all employees. Medical and prescription drug coverage will be reinstated retroactive Oct. 5, 2021. Employees who elected and paid COBRA premiums will be reimbursed for premiums paid. • Increased severance for permanent plant closings by $10,000 for each level. The plant closure moratorium would be renewed for the term of the contract.

In September, the company informed employees it would be cutting 212 jobs in Battle Creek by 2023 as part of streamlining efforts and relocation of cereal production across its ready-to-eat cereal (RTEC) network in North America. Amid the strike, cereal production temporarily halted before Kellogg’s began using salaried employees and “third-party resources.” In November, the company announced it would hire some permanent replacement workers after negotiations broke down.

The high-profile labor dispute comes as union workers feel emboldened by a nationwide labor shortage amid the ongoing pandemic. Standing on the picket line outside of the Porter Street plant in Battle Creek on Thursday, Rob Clark said he still has some questions regarding the tentative agreement before deciding if he will vote yes.

“We need clarification from our committee before we can make a real choice. There is definitely some questions,” he said. “The uncertainty is tough for everyone. I think we’ve held together pretty well.” Kellogg’s was founded in Battle Creek by Will Keith Kellogg in 1906 as Battle Creek Toasted Corn Flake Company. In addition to the Porter Street plant, the city is home to Kellogg’s headquarters. The Porter Street plant is one of over 50 around the globe, and the company employed 31,000 workers worldwide as of 2020.

The last nationwide walkout among Kellogg’s cereal makers was in 1972 and lasted 21 days.

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