He said 511 workers at the food manufacturer’s Birmingham plant were being forced to sign compromise agreements which prevent them from taking legal action against the company, or face losing £16,000 – £20,000.
John Higgins, organising regional secretary at the Midlands branch of the Bakers, Food and Allied Workers Union (BFAWU), said the workers were entitled to enhanced redundancy terms under an agreement with the company. But the workers had been told they would receive only the statutory minimum if they did not sign the compromise agreements, he claimed.
Higgins said: “Compromise agreements are used all the time in voluntary redundancy situations, where workers are choosing redundancy and sign away their legal rights to sue the company, and I’ve got no problem with that, but this is a closure.
Compromise agreements
“We can still take action against the company as a union. But the compromise agreements mean that workers would not be able to enforce any findings in their favour, as they cannot take action against the company.”
Higgins said the union had reluctantly advised its members to sign the agreements because it could not risk them losing out on payments when the factory closes on April 24.
He said that in total 900 workers had been presented with the compromise agreements because they were being imposed at the Hovis factory in Greenford, which is also being closed.
Joint legal action is now being planned by BFAWU and the Unite union, which has about 100 members affected by the closures.
Discussions with solicitors
Higgins said they were in discussions with their solicitors about challenging the consultation over the closure.
“Consultation means you sit down and discuss options for keeping the site going,” he said, “but the only option they were interested in was closing it.”
He praised local management who he said had done everything they could to keep the site going, and he blamed Premier directors who he said were determined on the closure.
But a Premier Foods spokesman said the use of compromise agreements was “pretty standard practice”.
He added: “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 employee and safeguarding the interests of both parties.”
He also pointed out that Premier Foods pays for employees to seek their own legal advice prior to signing the agreements.
Meanwhile, earlier this month City analyst Investec warned that Premier’s share value had been driven down by one newspaper story.