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Last Updated: Dec 29, 2011 - 2:18:31 AM |
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Nassau, The Bahamas - The Industrial Agreement between KFC Nassau, Restaurants (Bahamas) Limited, and the Bahamas Hotel Catering and Allied Workers Union (Union) expired on September 24, 2011. As no proposal was received from the Union prior to the expiration of the Industrial Agreement, the company submitted a new, five year Industrial Agreement proposal on October 10 to the union. The company's management has explained that KFC is operating at great disadvantage to competitors in The Bahamas. While the company is subject to the same operating costs as its competitors, its wage and benefits package is more than two times higher. This is unsustainable, and the Union is well aware of KFC's financial predicament. KFC has emphasised that a reduction in the compensation package must be central to any new five-year contract that is to be negotiated.
Regrettably there was no response to the October 10 proposal. Accordingly three weeks later KFC sought to advance the matter and requested to meet with the Union on November 9 to begin negotiations. The company was told by the Union that this date was not convenient, and no alternative date was suggested. Accordingly, KFC suggested meetings during the following week. In response, the Union said that they would send their own proposal on November 29, and suggested meeting in early
January, 2012. KFC responded that the January, 2012 dates were unacceptable, and insisted on a meeting no later than November 30, explaining that after that date the company would have to resort to cost-cutting measures that would affect some benefits.
”We have all been facing some tough times,” said Gabriel Sastre, General Manager of KFC. ”With the downturn brought on by the global recession, the Bahamian economy has been hard hit. We have all had to face increases in costs, which is a challenge for us all, including KFC. Our customers are also finding it difficult, and have let us know that our prices are too high by not only complaining to us directly on Facebook and via customer focus group feedback, but also by their decision to start shopping elsewhere.
”Despite the superiority of our product, the reality is that the customer can no longer afford to pay much more for KFC than other fast food offerings. As such, to save the business, we have to get our cost structure in line with the rest of the fast food industry.”
In the 27 years since KFC in Nassau came under its current ownership, competition in the fast food industry in The Bahamas has grown enormously. Several US franchises and many home-grown ones are now competing aggressively for the business.
The wage and benefits package that KFC carries is a result of a union negotiated labour contract that dates back to the earliest days of the company's presence in The Bahamas, when KFC was the only branded fast food purveyor. Since then, the contract has almost mirrored, item for item, the terms and benefits in the contracts negotiated for workers in the hotel sector, which is an onerous burden on a fast food operation. The existing labour contract imposes staffing arrangements that the competition does not have to deal with and a wage and benefits package that accounts for a significant percentage of total expense.
For more than two and a half decades KFC has enjoyed an outstanding record as a good employer and has been fair and generous to staff. KFC employees are among the better compensated workers in The Bahamas. As a testament to this, the rate of staff turnover at KFC has been lower than at other fast food establishments and much lower than other businesses in The Bahamas. The average tenure of KFC workers is approaching 10 years.
In recent years, as revenues have fallen and expenses have increased, KFC has had to secure additional financing to maintain normal operations.
The record clearly show that KFC has tried every alternative before arriving at the following position going into negotiations with the union: To remain viable, the company must adjust its compensation in line with the norms of the sector and will seek to renegotiate the wage and benefits package in the new industrial agreement.
The company is willing and anxious to enter negotiations with the union in good faith at the earliest possible date, and hopes to complete negotiations for a new agreement in the shortest possible time.
© Copyright 2011 by thebahamasweekly.com
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