An Exercise: Reaching Agreement in a Workplace Negotiation

Introduction

The purpose of this exercise is to gain experience in negotiating over issues that might be the subject of an enterprise agreement.The example is based on a dairy products company and specifically on work organisation and marketing issues surrounding the production ice cream and other milk-based products.There is one major union involved that represents all the process workers (of which there about 100 full time employees).The situation is that there have been a number of meetings already.Both parties feel the need to 'wrap this one up' and finalise an agreement.

You will take the role of either management or worker/union negotiators.

For the purposes of this exercise the issues to be negotiated over all revolve around important issues of principle and it should be possible to negotiate and reach agreement without delving too much into the intricacies of ice cream production (which is another way of saying you should not have to 'make up' lots of so called facts in order to reach an agreement.)The critical issue in production and marketing ice cream is, as you can easily imagine, one of flexibility (such as responding to an increase in demand in a sudden heat wave) but issues of control and reward are important for the employees.

Although the context of this negotiation is the workplace, the skills you will need to reach an agreement are relevant to negotiations in other contexts.

The Issues

The classification structure and pay rates have been agreed as have many other issues - annual leave, meal breaks etc.There are five issues which remain to be resolved.

i) the relativities between the various classifications have been established but it is still necessary to agree upon the basis for a general increase in wages during the life of the agreement

ii) the skill requirements for each classification and the related training modules have all been agreed; the workplace arrangements, such as the process by which employees will be identified for or can nominate for training, now have to be agreed

iii) the hours worked are currently 38 per week (5 shifts of 7.6 hours); it has been agreed that the nominal weekly hours of 38 will be retained but worked across a multi-week cycle; it will be necessary to agree upon the length of the cycle and other roster issues

iv) the duration of the agreement

v) the establishment of a joint workplace committee: most of the practical arrangements (size, facilities etc) have been agreed and only two issues remain - whether the committee should be a negotiating body or a consultative one; and whether any company information can be kept confidential from the committee

Basic background information

The last agreement was concluded 2 years ago, the main element being a 2% + 2% increase in wage rates.

Inflation has been around 3% and is expected to continue at that level.

Productivity improvements in the company have been around 2%; there has been continual minor upgrades of equipment.

The company is relatively profitable but there is strong competition in the market place.

Preparation

Within your negotiation team

establish the principles which will be important for you and the questions which will have to be addressed to your satisfaction before agreement can be reached in each of the issues

develop a broad strategy to get the other party to accept your principles as the basis of eventual agreement

develop an opening position

organise your team for the negotiation session

Negotiation

Your team will be required to negotiate and reach agreement on these issues.

You can expect to take some adjournments during the course of the negotiation.

If you do not reach an agreement, the current dispute procedure provides for reference to a private arbitrator.There is no provision for mediation so both parties would forgo any direct control over the eventual outcome; therefore it is in neither party's interests to hand over their issues to an arbitrator.

Once the negotiation is complete you will have to report back to either the company senior executive team, or to the union membership.Clearly, if you have not achieved a good agreement then this will be a difficult meeting.However, you can anticipate that it will be even more difficult if you have not reached agreement at all.

An Exercise: Reaching Agreement in a Workplace Negotiation

Worker/Union Considerations

i) the relativities between the various classifications have been established but it is still necessary to agree upon the basis for a general increase in wages during the life of the agreement

you'd like an amount to cover past inflation and past contributions towards productivity

you'd like the payment to be made from the commencement of the agreement and not conditional on anything

you would be willing to consider any productivity bonuses in addition to this increase, provided that

i) workers/union agree to the productivity measures

ii)those measures actually reflect worker effort (to put it simply, the workers are not going to miss out on the bonus just because someone else messes up)

iii) bonus are paid equally across the entire hourly paid workforce covered by the agreement, ie a collective bonus not an individual one

ii) the skill requirements for each classification and the related training modules have all been agreed; the workplace arrangements, such as the process by which employees will be identified for or can nominate for training, now have to be agreed. Ideally,

workers should have the right to go on paid training when they feel they want to progress, not wait to go on training only when the company has a vacancy

once trained, if work at the higher level (which would have higher pay) can not be found then the employee is to be paid a 'trained allowance' which would be half the difference between the grade they are now on and the grade they have been trained for

those trained are to be the first to be promoted to any vacancy at the higher level, before any other company selection or outside advertisement

iii) the hours worked are currently 38 per week (5 shifts of 7.6 hours); it has been agreed that the nominal weekly hours of 38 will be retained but worked across a multi-week cycle; it will be necessary to agree upon the length of the cycle and other roster issues

you anticipate that management will suggest annualising the hours, each employee would work 1748 hours each year (the same as 46 normal weeks, ie allowing for holidays) with the hours varying each week according to need

most employees would be prepared to move to a 154 hour four-week cycle; this would mean that their hours will not vary too much from day to day and week to week

most employees would be prepared to work 45 hours in any one week but after that, want to be paid overtime

/continued

Worker/Union Considerations (continued)

no employee is to be financially disadvantaged as a result of any changes in roster, their current earnings must be maintained

there must be five weeks notice before any changes to the roster can be introduced (ie this will allow at least one cycle to be worked through under the prevailing arrangements before the changes take effect)

iv) the duration of the agreement

you want to keep the agreement to 12 months; there are fears that the rate of inflation may increase and so you don't want to get locked into a long agreement

v) the establishment of a joint workplace committee: most of the practical arrangements (size, facilities etc) have been agreed and only two issues remain - whether the committee should be a negotiating body or a consultative one; and whether any company information can be kept confidential from the committee

committee to be a negotiation body, any planned changes which may affect the employees, including marketing, finance and production issues, are to be agreed in the committee before implementation

all company documentation to be available to committee members, who will be bound by confidentiality obligations

1.The needs, resources and constraints from Worker/Union perspective.

2.The needs, resources and constrains for the other party,