Ultimatum to Birmingham Hovis Factory Workers: 'Sign Compromise Agreement or Lose Enhanced Redundancy Pay'

(Newswire.net — April 22, 2013) Birmingham, UK — Union leaders of the workers at the Hovis factory at Garretts Green expressed outrage at Premier Foods decision requiring redundant workers to enter into compromise agreements in order to claim the enhanced redundancy package that was agreed with the workers’ unions.

John Higgins, the Bakers, Food & Allied Workers Union regional official, expressed “utter contempt for the directors who have pushed this process forward. We are going to take legal advice to see if we can take them to court over the compromise agreements”.

With the imminent date of closure of the factory fixed for 24th April 2013, the unions latest move to escalate the dispute with possible legal action against Premier Foods could leave many workers in an uncertain situation.

The dispute over the forced compromise agreement and the consultation process could drag out the final conclusion to the redundancies.

The unions are accusing the company of following a meaningless consultation process in the lead up to a final decision on redundancies.

Mr Higgins stated that he believed “the closure was already pre-ordained – they never had any thoughts of keeping the site open and the consultation was meaningless.”

The company’s decision to tie the enhanced compensation package to a compromise agreement, looks to have caused uproar with the union and pushed it to consider legal action against the company.

In response, Corporate Affairs Director for Premier Foods, Richard Johnson, said: “This is pretty standard practice – we use compromise agreements right across the business from top to bottom. It is a way of achieving a degree of finality between the employer and the employee and safeguarding the interests of both parties.”

According to employment and compromise agreement solicitor, Graham Cardona of Cardona & Co solicitors, redundancy compromise agreements have been increasingly used over the last few year in redundancy situations in order to bring finality to the employment contract.

“A compromise agreement is the only safe way for a company to bring a final conclusion to an employment contract between the employer and worker. The principal terms of a compromise agreement is that in exchange for a financial sweetener from the company, the employee agrees to waive his employment rights and not to sue the company”, explains Graham Cardona. “However, the offer of a compromise agreement should not be construed as evidence that the employer has done anything wrong”.

“Premier Foods decision to make the enhanced redundancy conditional on the workers signing a compromise agreement is simply the company wanting to avoid a legacy of employment claims after the closure of the factory. However, that is not to say that the Unions’ position is untenable”.

“If the company is found by the courts to have simply gone through the motions of consultation in disregard of the objective of consultation, it could be ordered to pay substantial compensation to the workers” explains Graham Cardona

The difficulty however is that it may be a high risk strategy for the unions to advise its members not to sign the compromise agreement as there is £15,000 to £20,000 at stake for each worker if they do not.

Therefore, any subsequent legal action by the union may not make any difference to those workers that sign their compromise agreements as it will preclude them from benefiting from any later court order or award.

Graham Cardona speculates that maybe the only viable option available to the union is to push the company to make the best redundancy package possible for its workers by using the threaten of legal action, since Premier Foods will no doubt want to avoid prolonging the dispute or dragging the matter through the courts.

 

About Cardona & Co

Cardona & Co solicitors are a firm of Milton Keynes solicitors that specialise in employment and negotiating terms of compromise agreement for employees facing dismissal. For further information and answers to many of the frequently asked questions on redundancy and compromise agreement, go to http://cardonaandco.co.uk/compromiseagreement.

 

(by Graham Cardona)