STAFF AT the church-controlled wine and beer maker KEO yesterday went on strike following management’s rejection of a Labour Ministry mediatory proposal regarding plans to lay off 150 employees.

The company had announced in February that it was planning to lay off a significant number of staff, estimated to be about a quarter of the workforce, due to the effects of the economic downturn.

According to unions SEK and PEO, specific proposals were tabled such as voluntary redundancy based on compensation packages used in 2006, which were rejected by the company.

After the ministry got involved to mediate between staff and management, the company “unfortunately, maintained the same unacceptable stance”, said the unions.

A mediatory proposal was tabled by the ministry last Monday which put compensation at 50 per cent of 2006 levels. The next day, yesterday, the company rejected the proposal saying it would go ahead with immediate layoffs.

The Employers and Industrialists Federation (OEV) yesterday condemned the “provocative” strike measures, calling on the unions to cease immediately before causing further disruption to the company and remaining positions of staff.

While no one doubted the drastic drop in the company’s turnover, the unions still demand compensation to the tune of €5.2m while the ministry suggested €2.5m, said OEV.

The ministry’s mediating proposal was made in the knowledge that KEO could not accept it, thereby exposing the ministry’s handling of the situation, added OEV.

According to the company’s 2009 annual report, KEO employed 572 permanent staff, costing €13.9 million in salaries and €2.7 million in provident and pension fund contributions.

The group’s turnover for 2009 was €54.6 million, around €10 million less than the previous year. In 2009, KEO posted a net loss of €3.7 million.

 Source: Cyprus Mail