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Save Mart’s New Contract Could Adopt Co-Pay

“There’s no way to sugar-coat this. Many people will be asked to step down." — Ron Lind, president of UFCW Local 5

MODESTO, Calif. — Workers at three Northern California chains may have to accept a co-pay to their health care coverage, though a final decision will depend on a new plan design that cannot be completed until all three companies in the bargaining unit sign new labor contracts.

Save Mart Supermarkets here reached an agreement last week on new contract terms when the executive board of United Food and Commercial Workers Union Local 5 accepted the chain’s final offer after 52% of the membership voted to reject that offer. Because the vote fell far short of the two-thirds majority needed for the union to sanction a strike, the board voted to accept the contract — as it did in a similar situation in 2001 during negotiations with Safeway.

The contract is identical to one that was accepted last month by members of UFCW Local 8, which also represents Save Mart workers.

Under terms of the new contract, Save Mart tentatively agreed to increase its health care contribution of $6.50 an hour by 30 cents per employee pending contract settlements with Pleasanton, Calif.-based Safeway and West Sacramento-based Raley’s.

Read more: Raley's Shuts Two More Stores

Ron Lind, president of Local 5, said the $6.50 per employee per hour is the highest employer contribution in the industry, adding that the actual cost of the plan is probably closer to $7, which is expected to rise to $9 within two years.

Under the plan contained in the Save Mart agreement, the company will pay $1,100 a month for employees working 40 hours a week and $600 a month for those working 24 hours, though all will have identical benefits.

A union spokesman told SN the joint administrators of the health care trust believe they can redesign the plan to lower its cost, though the redesign is likely to include an employee co-pay — the major stumbling block that has delayed settlement of the Northern California contracts since last October.

The spokesman said the union has scheduled several negotiating sessions with Safeway later this month, “though the company is hanging tough on the issue of the co-pay,” he told SN. Raley’s, which suspended talks with the union in June, held a single meeting with the UFCW late last month but remained at an impasse, a chain spokesman said.

Read more: Save Mart Demotes Senior Clerks

The contract with Save Mart, which does not include any wage increases, will expire Oct. 13, 2013.

It gives Save Mart the right to lay off senior clerks to a level of 65%, rather than the 44% level under the former agreement. It was Save Mart’s threat to start reducing the number of senior clerks that prompted the union to resubmit Save Mart’s offer to its members earlier this month after 64% had voted to reject it last month.

“There’s no way to sugar-coat this,” Lind said in a recorded message on the local’s website. “Many people will be asked to step down. But we fought as hard as we could, and I got a personal promise from Bob Piccinini [Save Mart chairman and chief executive officer] that the company will look for ways to minimize the impact on most senior members.

'To Be Blunt...'

“To be blunt, this situation sucks,” Lind added. “But we will work hard to improve it when this contract expires, particularly if Save Mart is able to turn itself around.”

To help Save Mart do so, the union negotiated a temporary stabilization agreement with the chain that will extend for an additional year past the contract expiration, “though it is only temporary and when it expires, it cannot be extended unless the company requests additional relief — and even then, it would stay in force only if the members vote to extend it,” Lind said in the recording.

Read more: Union Board to Vote on Save Mart Contract

Among the terms of the stabilization agreement: 50% of senior clerks are guaranteed 40 hours a week and another 25% are guaranteed 32 hours; the employer can schedule split shifts for greater flexibility; employees will get one less week of paid vacation, with vacation payments being made in lump sums on the employee’s anniversary date; four annual holidays will be temporarily suspended; and holiday wages will be straight time plus holiday pay rather than double time plus holiday pay.

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