KFC gives 'facts from the real world'

However, for some Bermudians, Bermuda is different than everywhere else – in their world business decisions shouldn’t be made based on economics; union presidents shouldn’t have to take wage cuts while demanding that other people do so; contracts one has negotiated need not be honoured if the provisions become inconvenient; it’s okay to say you want to protect jobs one moment and then ask everyone to stop buying the product that supports those jobs the next; it’s okay to break the law (illegal pickets come to mind) so long as you falsely accuse someone else of breaking the law first; and the whole truth is often less important than a headline. Let’s call this “Another World”.

Kentucky Fried Chicken (Bermuda) Limited (“KFC”) has no choice but to operate in the Real World. In the Real World a business exists to generate a fair profit for its investors. In order to succeed, the business must treat all of its investors, staff and customers fairly and with respect. Without investors, there are no funds to operate the business. Without staff, there is no one to serve customers. Without customers, there is no point in being in business.

In the Real World, differences of opinion arise from time to time and it often takes much discussion and honest effort to work out those differences. Almost always, successful resolution of such differences requires honesty, and respect from all sides together with a genuine effort to understand and appreciate an opposing point of view. The present dispute between KFC and the Bermuda Industrial Union (“BIU”) is no different.

In recent months, the BIU has held press conferences, printed flyers, and made public statements listing “facts” that exist in Another World. It’s time for KFC to share the facts from the Real World:

1) Most non-management workers at KFC have been represented by the BIU as the workers’ bargaining agent for decades. Certification or de-certification of a union is a technical process that results from the majority of workers choosing union representation or choosing to discontinue union representation. An employer cannot unilaterally de-certify a union and, contrary to the BIU’s erroneous statements, KFC has never attempted and has no desire to do so.

2) Once certified, a union has a responsibility to bargain (i.e. negotiate) in good faith on behalf of its employees with the employer. Likewise, the employer must also bargain in good faith. KFC has made every reasonable effort to bargain in good faith with the BIU to come to agreement on the terms for a collective agreement. KFC’s efforts at bargaining in good faith began in February 2011 when we wrote to the BIU requesting discussion about necessary changes to the collective agreement then in force, and continued until March 2012 when the BIU unilaterally decided it was unwilling to continue negotiations with KFC.

3) Union certification ensures that a union may bargain on behalf of employees. It is the process of bargaining which ultimately leads to a collective agreement. Certification of a union is entirely separate from the process of reaching a collective agreement.

4) KFC and the BIU freely negotiated and entered into a collective agreement effective from 15 April 2008 which had a term of 3 years ending on 15 April 2011. One of the freely negotiated provisions of that agreement was that the agreement would continue at the end of the 3 year term until either party modified or terminated the agreement after giving 3 months’ notice to the other.

5) KFC spent months negotiating with the BIU in good faith from April through August 2011 to try and reach agreement on modification of the collective agreement to meet KFC’s Real World business needs. During that time several proposals were presented to the BIU and all were rejected by the BIU. After more than 5 months of unsuccessful efforts to modify the collective agreement, KFC was left with no alternative than to exercise its contractual right and give the BIU 3 months’ notice of termination of the agreement. KFC did not take this action lightly, but only after many attempts to invite the BIU to visit the Real World.

6) At the time of issuing its notice for termination (and in the same letter) to the BIU, KFC expressed its desire to spend the 3 month notice period discussing the terms of a new collective agreement with the BIU. At the BIU’s request, KFC voluntarily participated in mediated negotiations during that time to discuss outstanding topics. KFC’s genuine efforts to continue a dialogue with the BIU and participation in discussions to try and agree terms for a collective agreement prove that at no time did KFC attempt to de-certify the BIU nor act as if the BIU was anything other than the authorised representatives of KFC’s workers.

7) After months of requesting information regarding the workings and financial status of the Restaurant Pension Fund into which KFC was contractually obligated to contribute as a result of the last collective agreement, a meeting was finally held between the Fund, KFC, and the BIU in November 2011. That meeting and subsequent communications shortly thereafter caused KFC to be greatly concerned about the compliance, administration, and solvency of the Fund. While the BIU has since privately acknowledged that there may be issues for the Fund to address, rather than working with KFC to immediately protect the pensions of its BIU represented employees, the BIU has instead continued to insist that KFC should continue to contribute pension contributions to the Fund notwithstanding KFC’s serious concerns and even though the majority of KFC’s concerns have not been adequately addressed.

8) Even though the BIU had received KFC’s notice of collective agreement termination 3 months prior, the BIU was apparently caught off guard in December 2011 when KFC proceeded to confirm to its employees terms of employment following the termination of the collective agreement. The BIU seemed further surprised that KFC would take immediate action to protect its employees future pension contributions (as any good employer would) by ceasing to participate in the Restaurant Pension Fund as soon as the contractual obligation to do so ended and instead arranging for its unionised staff to participate in an alternate, existing registered pension plan.

9) Rather than request a meeting with KFC to discuss any concerns the BIU had following proper termination of the collective agreement, and working expeditiously to come to terms for a replacement agreement, the BIU instead chose to call a press conference in December 2011 and make false claims regarding KFC’s termination of the collective agreement and false claims that KFC was reducing the vacation and sick leave benefits of its workers (although these latter claims were subsequently retracted by BIU President Furbert when he publicly apologised to KFC for making incorrect statements).

10) KFC has reaffirmed to the BIU and to its staff members that the company has no intention of reducing the wage levels, present vacation allowance or present sick leave allowance for any of its existing employees. At present KFC employees enjoy generous benefits which in some cases include paid vacation leave up to 7 weeks per year and paid sick leave up to 40 days per year.

11) Following the BIU’s December 2011 press conference, and after meetings facilitated by the Department of Labour, KFC offered the BIU a proposal to continue discussions in the new year on a without prejudice basis to try to resolve outstanding issues. The BIU accepted KFC’s proposal and mediated discussions occurred from January 2012 through March 2012 until the BIU decided it was no longer willing to discuss contract terms with KFC. It was the BIU and only the BIU who decided to walk away from the negotiating table and not discuss the most recent full proposal for a new collective agreement that KFC had prepared and delivered to the BIU and Department of Labour in February 2012.

12) Rather than engage in productive dialogue, the BIU once again called a press conference in March 2012 and made inaccurate or misleading claims regarding KFC’s intentions to participate in the labour relations process. This was subsequently followed by the BIU’s call for a boycott against KFC and the public distribution of a flyer containing misleading statements. For the record, KFC’s “Canadian Controller” was born in Bermuda, has deep ties to Bermuda, and is and has always been Bermudian. The BIU’s attempt to portray a KFC executive member as a foreigner is, at best distasteful and unproductive.

13) For the record, KFC is more than 99.5% Bermudian owned, with the majority of its Directors being Bermudian, all of its management team Bermudian, and the vast majority of staff Bermudian. KFC is a Bermudian company with Bermudian investors, supporting Bermudian jobs, and contributing to the Bermuda economy. Any suggestion that there is any attempt by KFC as a foreign company or with non-Bermudian management to disadvantage Bermudian workers is entirely mischievous and plainly false.

14) Rather than try to resolve differences around the negotiating table, the BIU has apparently attempted to convince the Minister for Economy, Trade and Industry that she should intervene in a commercial contract disagreement between KFC and the BIU. KFC accepted the Minister’s invitation to meet with her and share KFC’s perspective on differences with the BIU. KFC advised the Minister that it believes the best way forward is for the BIU to return to the negotiating table for a frank discussion about outstanding differences with KFC and for good faith negotiations to continue until a new collective agreement is reached.

15) Whilst the Minister for Economy, Trade and Industry has indicated that she wishes to send the matter of disagreement between KFC and the BIU to arbitration, it is KFC’s view (based on legal advice received) that the Minister does not have the authority to compel the parties to enter arbitration. KFC has shared its legal advice with the Minister and notes that to-date no action has been taken by the Minister to initiate statutory arbitration proceedings. KFC believes that a freely negotiated settlement is ultimately in the interest of both parties and remains willing to resume negotiations with the BIU when the BIU is ready to return to the negotiating table. In any event, the principal point of disagreement between KFC and the BIU at the present time appears to be related to be interpretation of a contractual termination clause rather than related to the terms and conditions of employment for KFC’s workers.

16) If the BIU’s efforts to weaken KFC’s business through boycott or other measures ultimately prove successful, the Real World consequences are sure to place further financial pressures on the company that will compel KFC to further reduce costs, limit staff hours or eliminate staff, or possibly re-evaluate the wisdom of remaining in operation. These consequences will have significant negative impacts on the individual KFC staff members represented by the BIU. The BIU is paid by its members to act in their best interests. Pursuing actions which may well result in unemployment for those members is an abandonment of the BIU’s duty to the KFC employees it represents. KFC remains prepared to do its duty and engage in negotiation with the BIU to reach an agreement that serves the long-term interests of both the business and its current workers. We only ask that the BIU do the same.

17) Contrary to what the BIU would like the public to believe, disagreements between KFC and the BIU relate only to those parties and not to all workers in Bermuda. Each business in Bermuda must operate according to its own unique requirements. Accordingly, KFC needs and can only accept a collective agreement with the BIU based on the specific needs of KFC’s business. This is a rational and realistic requirement in the Real World.