A collective bargaining session is about to begin.  You will represent the Getwell Hospital. (Decide which management position you have).  You will be negotiating with the Hospital Employees Union, representing 625 hospital workers at Getwell Hospital, including licensed practical nurses (LPNs), laboratory technicians (lab techs), radiology technicians (radiology techs), pharmacy technicians (pharmacy techs), food services and housekeeping workers.  Also, at the Hospital is another bargaining unit of 250 registered nurses (RNs) represented by a different union and involved in their separate negotiations with the Getwell Hospital management.  The issues are:

 

 

Your goal is to negotiate the least costly wage and benefit package you can for a one-year contract with the Hospital Employees Union.  While you want to attract and retain the best employees, you need to stay within Getwell Hospital's budget.  The Board of Directors has instructed you to avoid spending over $2 million of new money on improvements in wages and benefits. The Board of Directors also wants you to avoid a strike and its potential consequences.  To add to the pressure, you have just been informed that the union members have taken a strike vote and are prepared to walk out if their demands are not met.  Any contract you agree to with the union's bargaining committee must be approved by the Board of Directors, and then, ratified by the union members.  Here is the background:

 

1.  WAGES:
   1. When an Employee is transferred to a classification with a higher rate of pay, she shall be advanced to the start rate of such higher classification, except where that start rate is lower than the Employee's existing basic rate of pay. In the latter case, she shall be advanced to the next higher increment for the higher classification provided that the trial period in the new position is completed.

 

Wages will be the most important and expensive issue to negotiate.  The average wage for an employee in the bargaining unit is $20.00/hr.  Each employee works 40 hours x 50 weeks = 2,000 hours per year; $20 x 2,000 hours = $40,000 average worker's wages per year. Therefore, each 1% wage increase for each worker = $400 per year (or $8/week x 50 weeks), and multiplied by 625 workers = $250,000 total cost to the Hospital.

 

For the first round of negotiations, your management team will offer a 2% "cost-of-living" wage increase to all workers in the Hospital Employees Union bargaining unit.  This will cost the Hospital half a million dollars. (Using the formula above, $250,000 x 2 = $500,000).  Considering these uncertain economic times, you think this is a reasonable starting point. You would like to keep wage costs down as you want to invest more money in new technology and equipment.  You could inform the union negotiators that higher wages might mean "down-sizing"...

 

ARTICLE 14: WAGES

 

14.01   The basic rates of pay as set out in the Salary Schedule shall apply to all Employees covered by this Collective Agreement.

 

14.02  Subject to any of the other terms of this Collective Agreement providing for the withholding of or delay in granting of an increment, an Employee's basic rate of pay will be advanced to the next higher basic rate of pay following the completion of the regular hours of work indicated in the Salary Schedule to the maximum increment granted for Full-time Employees.

 

14.03  Transfers

 

 

1. When an Employee is transferred to a classification with a lower rate of pay, her salary shall be adjusted immediately to the basic rate she would have been entitled to, had she been on the lower-rated classification from the commencement of employment.

 

14.04  Salary Grid

 

HCA (For our exercise we are only going to negotiate for one classification)

 

Date	After 520 Hours	After 2535 Hours	After 4550 Hours	After 6565 Hours	After 8580 Hours	After 10, 595 Hours	After  12, 610 Hours	After  14, 625 Hours
Sept 1, 2019
Sept 1, 2020
Sept 1, 2021
Sept 1, 2022	$ 17.00	$ 18.00	$19.00	$20.00	$ 21.00	$ 22.00	$ 23.00	$ 24.00