KFC cancelled an agreement with the Bermuda Industrial Union only after attempts to amend the agreement failed, its management said today.A spokesman said the amendment of the collective agreement was necessary for “the continuation of the business and preservation of existingemployment”.“KFC, like many businesses in Bermuda, has experienced a trend of declining sales and increased operating costs leading to net losses,” said a spokesman for the company in a release issued this afternoon.“The collective agreement, which was in place through December 9 of this year, did not anticipate the changes in the economic environment that have occurred since 2008 and the economic realities that all business in Bermuda, especially those in the hospitality industry, are facing today.”According to the spokesman, negotiations began in good faith in April but ended in August, after the two sides were not able to come to an agreement.“On September 9, 2011 KFC issued the BIU with written notice of its intention to terminate the [collective agreement] pursuant to Article 38 of the collective agreement which states: ‘This agreement shall come into effect on April 15, 2008, and shall remain in effect for a period of not less than three years and thereafter shall continue in effect provided that at any time after January 14, 2011, three months’ notice of termination or modification may be given by either party hereto.’”The spokesperson continued: “The effective date of termination, being end of day December 9, 2011, was confirmed in the same notice. KFC also noted in its letter of September 9, 2011 that it was prepared to work with the BIU over the next three months to reach terms for a new collective agreement between KFC and the BIU. Subsequently KFC also agreed to enter into mediation with the BIU with the assistance of the Department of Labour.“After several mediation meetings, however, KFC and the BIU were still unable to reach agreement on a number of critically important points which KFC’s board of directors deemed to be essential for KFC to be economically sustainable.”Union members marched on the Queen Street store yesterday after the company cancelled the union agreement, that covered 36 employees.BIU president Chris Furbert said the move was a clear violation of the law, for which the company should be penalised.The spokesman continued: “KFC remains committed to working with the BIU, or such other representatives as our employees specify, to establish a new collective agreement, and to ensure the continued well-being of our staff in these difficult economic times.”