Two years ago the United Steel Workers organized the 400 workers at Maple Grove Foods, a food processing company in Western Ontario. Previously the company had been in operation for over thirty years as a non-union shop. Management had tried to convince employees not to join the union. The employees were paid quite well, in the view of the company.
However, after a lengthy campaign the union organizing drive was successful. Jim Byer was hired as the company spokesperson to negotiate the first agreement between the parties and he and his team worked with Ralph Goodall, the chief spokesperson and business agent for the union. Negotiations did not go well. Both parties felt the other was not being responsive to concerns raised and after months of frustration the union applied to the Labour Board for first contract arbitration.
The arbitrator dictated the terms of the first agreement and neither the company nor the union was happy with the settlement. The term of the dictated agreement was two years and it was now time for the parties to meet and discuss the renewal of the collective agreement.
The terms of the first collective agreement dictated by the arbitrator were:
Average Hourly Wage Rate: $25.00 per hour.
Wage Impacted Benefits: 15% of AHWR
Non-Wage Impacted Benefits10% of AHWR
Jim Byer received the final set of union proposals in the mail this morning from Ralph Goodall and Ralph requested a meeting to start negotiations next week. The union proposals were as follows:
1. General wage increase to all job classifications – 20%
2. Term – 1 year agreement
3. Add new: Contracting Out Clause: The company will not contract out any work currently done by members of the bargaining unit without the written consent of the union. Under no circumstances will employees in the bargaining unit be laid off as a result of contracting out work.
4. Add new: Technological Change Clause: The company will give the union 6 months written notice of any technological changes that it plans to make in any of the company operations. Under no circumstances will employees in the bargaining unit be laid off as a result of technological changes made in company operations.
5. Add new: Pension Plan Company Contribution of $500,000 in the first year of the new collective agreement.
6. Add new: Safety Boots Requirement, Company Paid, $40.00 per year per employee.
7. Add new: The company will provide the union with bulletin boards on company premises to use for union business.
8. Add new: The company will deduct union dues from each bargaining unit member and remit the dues to the union on a monthly basis.
9. Change 3:01 to Read: Probationary Period-Decreased from Ninety (90) to Thirty (30) days.
10. The union reserves the right to add proposals to this list at any point during the negotiations process.
Respectfully submitted – Ralph Goodall USW
Jim Byer read the list of union proposals and he wasn’t pleased. That being said he was aware that this was just an initial position from the union and that there was no need to panic just yet. He noted that there were some things in the union proposals that meant some difficult bargaining ahead if the union was serious about their position. It was time to get down to work preparing for the negotiation.
Case Scenario written by Charles Purchase, Seneca College
1. Make all calculations, per worker, per hour.
2. Assume a 40 hour work week and 52 weeks per year.
3. If unsure of the format of the Memorandum of Agreement, then use the template provided in your readings. Remember to include all clauses, changes and revisions.
Jim needs to calculate the total compensation rate (TCR) on the base year of his current agreement. He knows that his wage impacted benefits (WIB) amount to 15% of his average hourly wage rate (WIB) and his non-wage impacted benefits (NWIB) amount to an additional 10%. Calculate the average hourly wage Rate, the wage impacted benefit rate, the non-wage impacted benefit rate and the total compensation rate for Maple Grove in the base year? (5 marks)
Jim will need to calculate the impact of the 20% wage proposal by the union. How does the proposal impact on the average hourly wage rate, the wage impacted benefit rate, the non-wage impacted benefit rate and the total compensation rate for Maple Grove in the first year of the new agreement? (5 marks)
Jim will need to calculate the impact of the safety boot and pension proposal on the non-wage impacted benefit calculation in the first year of the new agreement. He will assume each employee works a 40-hour week, 52 weeks per year. Calculate the new non-wage impacted benefit? (5 marks)
Jim doesn’t think he can agree to the union’s language on contracting out because as written it could severely limit the company’s flexibility. What language, if any, should Jim propose to attempt to resolve this issue? (10 marks)
Jim doesn’t think he can agree to the union’s language on technological change because as written it could severely limit the company’s flexibility. What language, if any, should Jim propose to attempt to resolve this issue? (10 marks)
How should Jim respond to Union Proposals #9 and #10? (5 marks)
If the parties reach an impasse during negotiations, discuss the process that they must follow prior to a legal strike or lockout scenario. (10 marks)
Negotiations have completely broken down and you have been appointed by the government to be the mediator. Discuss your final offer of settlement to the parties and draft a Memorandum of Agreement between the parties on that basis. (10 marks)
60 marks, 30% of the overall grade for the subject.
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