Course: MGMT9830: Industrial Labour and Relations

Topic: Coastal Crops Ltd. (CCL) Collective Bargaining Agreement

What are some sample recommended steps for "Article XI: Grievance" under the memorandum of settlement (see image below, page 5) prior to Coastal Crops Ltd. (see images below, pages 1-4) on the company/management side against the union? I also posted an example for the grievance part (see image below, page 6), which you may use as a reference to my question.

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Coastal Crops Ltd. (CCL) Coastal Crops Ltd. (CCL) has been unionized since it was founded in 1968. It has always operated out in the west end of St. John's, Newfoundland. While the firm originally farmed the land, in the 1980s the firm built a number of large greenhouses. The addition of greenhouses allowed CCL to ex- pand its product offerings and grow produce all year long. To better meet the needs of its customers outside of Newfoundland, the firm purchased a (non-union) location in 1997, which is located in Phippsburg. Maine. The relationship between the management group of CCL and the United Agricultural Workers of Canada (UAW) has generally been strong. Wages, benefits. and working conditions have usually been on par with or better than those of the competition. In particular, the firm has tried to pay slightly above the going market rate. To date, there has been only one strike. It took place i 1997 and was largely centred on the issue of job security. given the poor economic conditions of that pe- riod and the concern that the acquisition of the Maine location would result in job losses in Canada. At that time, the Newfoundland economy was performing very poorly. in part due to the collapse of the cod fishery. Given the dramatic decrease in demand for its products, and the need for capital to purchase the new location, the company laid off about 30 percent of its staff and froze all wages for three years. The early 2000s gave rise to new opportunities for CCL. With the legalization of medical cannabis, the firm built a production facility on the property in 2003. In 2017, anticipating of legali- zation of recreational cannabis, the firm doubled the size of 1ts cannabis production facility. Cur- rently. approximately 65 percent of CCL's yearly revenues come from cannabis production. The can- nabis market has resulted in the firm hiring about 200 new employees over the past five years. As the parties prepare to enter a new round of bargaining, several key events are taking place. For the union, the last contract (signed in 2016) was ratified by only 54 percent of the membership. Given the 1997 job cuts and wage freezes. many members felt that the revenues associated with the medical cannabis should have resulted in greater gains at the bargaming table. In fact, the member- ship has voted in a whole new slate of union leaders to form this year's collective bargaining team. Rumour has it that the membership wanted a more militant negotiations team that would take a firm stand on mncreased wages, improved vacations and pensions, and job security. It 1s also clear the un- ion faces a challenge meeting the needs of a diverse membership. The average union member is 38 and has around 14 years of service. However, given the downsizing in 1997_ and the influx of canna- bis worlk, the St. John's location almost has two different age groups. There are approximately 200 employees with fewer than five years of service (most of them are in their twenties); yet there are about 300 employees with more than 15 years of service (most of whom are over 40). The current negotiations team will need to balance the needs of its newer members with those of the \"old guard.\" Management has just received notice that it is at risk of losing its contract with Premium Cannabis. Premium Cannabis 1s CCL's largest contract and represents about 40 percent of its annual revenue stream. There are two reasons why Premium Cannabis may not renew its contract. First, CCL 1s hav- ing problems meeting the production quotas specified in the contract. This is largely due to reliability issues related to CCL"s now aging production equipment. When the firm expanded the cannabis pro- duction facility in 2017, it did not buy new equipment. Rather. it repurposed existing equipment from when the cannabis facility was first built in 2003. This equipment is older and less reliable; it is also much less energy-efficient than the equipment corrently available. Second, CCL's labour costs are higher than those of some of its competitors, which could well take over the contrast. Premium Can- nabis's management team 1s under increased pressure to minimize expenses in all areas, including supplier contracts, to retain profitability. There 1s a rumour that a new firm may get the contract (Firm 2 in the attached comparison). This firm has the advantage of brand-new, energy-efficient equipment and lower labour costs. It currently runs 24 hours a day, 7 days a week. Hence, itisina better position to meet the needs of the cannabis industry. CCL management is currently examining the possibility of a substantial reorganization to better meet the needs of the cannabis industry. This could include raising production quotas and replacing the present equipment with new, energy-efficient, labour-saving machines in the St. John's facility (cost 5 $2 million). Assuming the current two-shift cycle remains, the new machinery would result in layoffs of about one quarter of the staff as well as the contracting out to cheaper labour sources in times of high product demand. Two alternative strategies have been openly discussed. First, purchase the new equipment (cost 5 $2 million) and begin operating three 8-hour shifis (i.e.. 24 hours per day, 7 days per week). This option would not entail hiring new employees or laying off any current staff; however, the firm would have to find sufficient savings in the first year of the collective agreement to absorb the full cost of the new equipment, and the total annual labour costs could not increase. Sec- ond, close the St. John's facility and move all production to the second facility (Firm 4 in the at- amount. other firms. Other Information Wages. Present average is $20.25. Costing Information for any proposed changes year; the company share is $1,750 per employee per year. retirement fund that can be used by the employee in retirement. of overtime is worked after midnight to address production issues. mit shipping of the products to all North American customers, including those in Newfoundland. due to illness, maximum 52 weeks). Current cost of the benefit plan to the employee is $750 per age wage at CCL is $20.25 per hour. This compares to an average current wage of $19.71 for the The benefits are co-paid (70% company, 30% employee). The benefits include dental plan, vision their jobs, for transferring staff to the American location is not feasible given immigration require- the new collective agreement, the firm's total annual labour costs cannot increase from the current Overtime. Each employee currently works an average of 4.25 hours of overtime per week. Over- In addition, CCL contributes an amount equivalent to 4 percent of each employee's earnings into a As is shown in Table 1, CCL provides a competitive compensation and benefits package. The aver- associated with closing the operation, as they previously secured government funding to assist with Closing the St. John's operation would mean that all management and union employees would lose 2017 expansion. The management negotiations team has been given a clear mandate: (1) the collect tached comparison), located in Phippsburg, Maine, a cheaper location. This location would still per- scription drugs, and a sick benefit plan (coverage up to 66.67% percent of earnings for any absence ments and so on. The firm is also concerned about the negative community and government reaction plan, life insurance coverage of two times base salary, medical insurance for hospitalization and pre- tive agreement must facilitate the renewal of the Premium Cannabis contract; and (2) over the life of time cost is time and a half. At present, employees must volunteer for overtime. Currently 80 percent TABLE 1 COMPARISON OF WORKING TERMS AND CONDITIONS OF SIMILAR FIRMS FIRM 1 (CCL) FIRM 2 FIRM 3 FIRM 4 FIRM 5 FIRM 6 AVERAGE No. of employees 550 650 625 50 400 533 Unionized? 2 2 Contract duration 3 years 4 years N/A 4 years 3 years 3.5 years Average wag $20.25 $19.50 $21.75 $18.00 $19.75 $19.00 $19.71 Year 1 wage increase Signing bonus 1.00% Signing bonus 1.00% Signing bonus 67% or $750 $500 $1000 $750 signing bonus Year 2 wage increase 1.00% 1.00% 2.00% 1.00% 1.00% 1.00% 1.17% Year 3 wage increase 1.00% 1.00% 2.00% 1.00% 2.00% 1.50% 1.42% OVERTIME Overtime voluntary? Yes Yes. But will No. Management Yes Yes. But will No. Management assign in can assign assign in can assign reverse order reverse order of seniority of seniority If insufficient if insufficient volunteers volunteers Overtime rate 1.75 1.63 VACATION 2 weeks at _ years "3 weeks at _years 3.83 4 weeks at _ years 2 10.83 21 5 weeks at _years 16.67 val 6 weeks at _years 21.67 (continued) WindTABLE 1 COMPARISON OF WORKING TERMS AND CONDITIONS OF SIMILAR FIRMS (CONTINUED) FIRM 1 (CCL) FIRM 2 FIRM 3 FIRM 4 FIRM 5 FIRM 6 AVERAGE SHIFT Regular 2nd shift Yes Yes Yes Yes Yes Regular 3rd shift 2 Yes 2 Yes Yes SHIFT PREMIUM Regular 2nd shift $1.50 $1.50 1.75 $1.00 $1.50 $1.00 $1.38 Regular 3rd shift $2 00 $2.00 $1.75 $1.50 $1.81 Retirement/pension as 4.00% 4.00% 6.00% 0.00% 5.00% 5.00% 4.00% % of wage rate Contracting out No language Only if no one Only if no one No restrictions Yes. But only No restrictions on layoff can on layoff can for jobs of perform the perform the 5 year of service; maximum off maximum of maximum of no maximum years' service maximum of 24 weeks 30 weeks 24 weeks = 15 weeks 30 weeks Health plan: employer $1,750 $1,500 $2.100 $1,000 $1,700 $1,600 $1,608 cost Health plan cost: 70.00% 65.00% 80.00% 50.00% 70.00% 66.67% 66.95% employer percentage. Vacation. The current entitlement to vacation is as set out below. Any changes to the vacation plan would be costed using the following formula: Average hourly wage 3 40 hours a week 3 Number of employees impacted. Years of Service Weeks No. of Employees Less than 1 1 day/month of service to a 90 maximum of 2 weeks More than 1 but less than 3 2 60 More than 3 but less than 5 2 50 More than 5 but less than 10 3 30 More than 10 but less than 15 4 30 More than 15 but less than 20 95 More than 20 but less than 25 5 85 More than 25 but less than 30 5 70 More than 30 5 40 Total 550 Shift premiums. Most employees (i.e., 60%) workday shift (8 a.m. to 4 p.m.). Forty percent of em- ployees are permanently assigned to evening (i.e., second) shift (4 p.m. to midnight). The shift pre- mium is currently $1.50 per hour. There is no night (i.e., third) shift (midnight to 8 a.m.). If produc- tion is needed after midnight, it is voluntary, paid at overtime rates, and no shift premium is paid. If the company implements a three, 8-hour-shift (i.e., 24 hours per day, 7 days per week) operation, they anticipate that 50 percent of workers will permanently work first shift, 30 percent will perma- nently work second shift, and 20 percent will permanently work third shift. Activate WindowsMemorandum of Settlement Template Between and the The parties agree as follows [use additional pages if necessary): ARTICLE I. Recognition ARTICLE II. Management Rights ARTICLE III. Hours of Work ARTICLE IV. Seniority, Layoffs. Etc. ARTICLE V. Vacancies, New Jobs, Promotions, Etc. ARTICLE VI. Committees ARTICLE VII. Wages ARTICLE VIII. Health and Welfare Plan ARTICLE IX. Retirement ARTICLE X. Vacation ARTICLE XIL Progressive Discipline ARTICLE XIII. Duration Article XT. Grievance Section 11.1 It is understood that emplovees (with or without the assistance of the shop steward) may bring a complaint to their immediate supervisor in an attempt to settle the issue at any time without filing a formal grievance. Section 11.2 The formal grievance process will be as follows Step 1: The emplovee will (with a shop steward) present a written grievance to his'her supervisor. The supervisor will have ten (10 workdays to investigate the situation and respond. If the grievance is not satisfactorily resolved, it moves to Step 2. Step 2: The grievance is presented to the department manager by the chief shop steward. The department manager will have ten (10 workdays to respond to the grievance. If the grievance is not safisfactorily resolved, it moves to Step 3. Step 3: The grievance is presented to the General Manager and Union Local President. The General Manager will have ten (10) workdays to respond to the grievance. If the grievance is not satisfactorily resolved, it moves to Step 4. Step 4: The grievance is presented to the Vice-President of Employment Eelations by the President of the National Union (or delegate). The Vice-President will have ten (10) workdays to respond to the grievance. If the grievance is not satisfactorily resolved, it moves to arbitration and follows the current process outlined by the provincial labour relations act