BA Catering Company Strikes Layoff Deal

Gate Gourmet, which provides catering services for British Airways, on Sunday announced a layoffs deal it hopes will help to end a bitter staff dispute that led to the grounding of hundreds of flights earlier this month.

The U.S.-based company said staff opting for voluntary layoffs would receive two weeks' pay for each year of service, more than twice the statutory minimum in Britain.

"It is Gate Gourmet London's hope that the results of this voluntary program and compensation payment plan, coupled with a possible compulsory program and work rule changes, will reduce its work force to levels agreed upon by the union which will restore the company to economic viability," the company said in a statement. It did not say how many jobs would be cut.

Gate Gourmet fired 660 employees for staging an unauthorized walkout over working conditions in London earlier this month. On Aug. 11, British Airways ground crew at Heathrow Airport walked out in sympathy, leading the airline to cancel hundreds of flights, stranding more than a 100,000 travelers.

Gate Gourmet agreed this week to seek voluntary layoffs among its workers, including more than 660 who were fired for holding an unofficial strike.

Talks between Gate Gourmet and union officials are scheduled to resume once it is known how many of the sacked workers and 1,400 other staff are prepared to accept the company's layoff offer.

Gate Gourmet has threatened to file for bankruptcy in Britain unless it can sign a deal with British Airways PLC, its biggest client. BA has said it is ready to sign a new contract with Gate Gourmet, but only if the company's labor dispute is resolved.

The sticking point has been Gate Gourmet's refusal to rehire all the fired workers. The union had demanded the workers be reinstated, and threatened further strike action if they are not.

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