Exercise # 3"B"INTEGRATIVENegotiationCASE

Introduction:

The following case is to be used as an integrative negotiation exercise.In an integrative negotiation the goals of the parties are not mutually exclusive.If one side achieves its goals, the other side is not precluded from achieving its goals and one party's gain is not the at the other party's expense.The fundamental structure of an integrative negotiation situation is that it allows both sides to achieve their objectives.However, while there is generally a "co-operative orientation' in such negotiations, the negotiators must not lose sight of they must still "claim value" in their interests and satisfy their own needs.

Before beginning this exercise students should refer to their text material related to the strategy and tactics of Integrative Negotiation.Students are expected to use/apply the key chapter concepts in their negotiations relative to this situation.

Situation:

Grazer Logistics is a 50-year-old Canadian family owned LTL trucking business, located in Stratford, Ontario.The firm has always been led and managed by the Grazer family members and has maintained a reputation as a principled but fairly run business.The business maintained a fleet of 40 trucks of varying sizes allowing them to carry many different products for a variety of customers.Consequently, the employees at Grazer Logistics were highly skilled drivers, mechanics, dispatchers and terminal labourers who loaded and unloaded trucks, sometimes by hand, other times with fork trucks, depending on the shipment.

When the second generation of the family started taking a more active role in day to day management and "old man Grazer" turned full management responsibility over to his daughter Lori, there was some concern about the future of the business. While Mr. Grazer was a "tough boss", he was universally respected and gained his reputation by treating everyone with respect and his benevolent care fostered a stable and peaceful working environment.Lori, on the other hand, was a smart, formally educated manager with a keen eye on the bottom line but not a "people person".In fact, Lori had worked her way up through the ranks, performing many functions from shipping receiving as well as dispatching, eventually moving into a financial role as company Controller.Despite how she had been trained and involved in the business, most employees felt that she was aloof to the employee's real day to day concerns and interests.

Lori's lack of concern for the kind of attention her father gave to his employees gradually created a climate of mistrust and in early 2011 a union organization drive resulted in a 55% vote in favour of a union.After the initial shock of unionization and a transition period after their first collective agreement, the company and The International Brotherhood of Trucking and Shipping had struck a practical but uneasy relationship.

Now approaching the year in which their first contract would be negotiated some tensions were beginning to mount.There was concern from employees about the level of work that Grazer had secured over the past two years and very little reinvestment had taken place in the equipment.Morale and productivity had slipped with uncertainty about the future of the company.On one recent occasion Lori had apparently been heard speaking to one of her supervisors suggesting that unions "only sink businesses with their culture of protecting the lazy and the professional scam artists".This was not viewed by the employees as a positive sign within the growing environment of uncertainty.

Amidst the tinderbox situation, Luke, a long serving employee (15 years of service) who had been away on medical leave with a "bad back" had indicated he was ready to return to work in his former position as a lift truck driver and loader at the terminal.The case of his departure had been a contentious one between union and management.The union fought hard for his medical leave, saying his bad back - which was the subject of medical dispute - was work related. By other observations the employee was also well known to always seek ways to do less work and had joked to employees that he would find a way for "a long vacation on company time".It had been suggested, but never proven, that his back pain was more related to his active hockey schedule in his free time.Nevertheless, his work demanded a great deal of bending, lifting and movement over many years and his claim for medical leave was, in the end supported.

Upon his prospective return the company took the position that because of his injury he could not return to his former position as a lift truck driver.In fact, the company had had several retirements in that department and had filled the positions with younger new hires, at correspondingly lower rates of pay.Given the demands of the position and the "concern" for the prospect of re-injury, the company had the right to offer Luke a position in the dispatch department, which happened to be at a wage $5.00/hr below that of lift truck driver.The union argued that he should return to the position that he had before based on his seniority rights under Article IV of their collective agreement. This is the operative section of the agreement to which management will also refer.

Article IV of that agreement stated: "An employee who has been on medical leave is entitled to return to the job/position they held prior to the medical leave, provided that the employee is capable of fulfilling the responsibilities of that position".The employee is also entitled to receive the same level of hourly pay or remuneration as was received prior to the medical leave as long as the employee is able to fulfill the responsibilities of that position".

This situation, in the existing environment, had become a flash point between the company and the union.Tensions over the issue were such that there had been talk on the shop floor of a "walk out" and within the management ranks of a lock out.

To possibly avoid either one of these outcomes, which were a real possibility, the HR manager, his trucking, terminal and dispatching operations managers met with the union team to see if they could find a way to negotiate an agreement as to how to resolve this situation.It is likely that the future of the company and everyone's jobs depend on a resolution; at the very least the solution and the way it is reached would set the tone for the future negotiations between the company and the union.

Negotiation Exercise 3 "B" THE UNION POSITION

The Union Position:

You are part of a negotiation team representing your union local.Your union is only a year old and although you have not negotiated with the company based upon the initial collective agreement you were preparing for a hard round of bargaining over the many issues that have occurred in the plant.In your experience the company and its management has not really been interested in complying with the collective agreement and spend most of their time trying to find "loop holes" that allow them to work around rather than with the provisions in the agreement, especially with respect to job classifications and how the workers perform their jobs. You also see the management as attempting to undermine the union by hiring, wherever possible young and inexperienced employees who are in a weaker position while on their first year of probation.

All of this is happening in a climate of economic uncertainty.There is mounting competition from an increasing number of trucking and logistics firms with lower wages and more aggressive quoting practices.More shipments are also being sourced to independent drivers with their own trucks and trailers, thereby putting additional pressure on quoting for shipments, pricing, revenue and profits.Although this is a family business you know that the owners have sought partnerships with other trucking firms that could result in shared shipping and terminal resources thereby giving them the room to reduce staff.However, you suspect that while this may be partially true, they could also be looking to sell their business - in which case everyone would be out of work.Stratford had experienced several business shut downs, especially in the manufacturing sector as the cost of doing business in many industries has made such firms less competitive vis--vis operations in emerging, low cost markets.In turn, local shipping and transportation needs had also been affected by these conditions.

You see this issue and its resolution as setting the pattern for future negotiations and you want to convey that you (and the union you represent) do not intend to be pushed around.At the end of the day you want to protect the right of workers to return from medical leave to their former position at the position's rate of pay.You wish to establish your negotiating position and attempt to negotiate the best possible situation for your member's return to work while being mindful of how this will affect future negotiations. You are also mindful of the economic circumstances in which the firm is operating and above all you want to keep your job and the jobs of your fellow employees

Negotiation Exercise 3 "B" THE MANAGEMENT POSITION

The Management Position:

You are the HR manger for Grazer Enterprises and your boss, Lori Grazer has given you full authority to represent the company's interests in this situation.Management in general and Lori is very mistrustful of the union's intent in this situation as the individual who wishes to retain his position is viewed by your supervisors as a notorious slacker who is using the new contract to perpetuate his scams.This situation presents an opportunity for management to take the union to task for protecting such an individual.

You are also mindful of the climate in which this situation has occurred both within and outside the company.There is mounting competition from an increasing number of trucking and logistics firms with lower wages and more aggressive quoting practices.More shipments are also being sourced to independent drivers with their own trucks and trailers, thereby putting additional pressure on quoting for shipments, pricing, revenue and profits.Although this is a family business you know that the owners have sought partnerships with other trucking firms that could result in shared shipping and terminal resources thereby giving them the room to reduce staff.However, you suspect that while this may be partially true, they could also be looking to sell their business - in which case everyone would be out of work.Stratford had experienced several business shut downs, especially in the manufacturing sector as the cost of doing business in many industries has made such firms less competitive vis--vis operations in emerging, low cost markets.In turn, local shipping and transportation needs had also been affected by these conditions.

However, you believe that the Grazer family does not want to destroy a business that has been in their family and part of their community for many years.Even Lori, for all her toughness, is very involved in the community like her father and has said on several occasions that she wants to adhere to her family's values of mutual respect and fairness - as long as, and this she has also made very clear - there is a culture of an honest day's pay for an honest day's work.

You and the management team see this issue and its resolution as setting the pattern for future negotiations and you want to convey that the company does not intend to be pushed around and held hostage by a union that protects a poor work ethic.At the end of the day you are prepared to protect your employee's right to work if they can do the work assigned to them.You wish to establish your negotiating position and attempt to negotiate the best possible situation for your company while being mindful of how this will affect future negotiations. You are also mindful of the economic circumstances in which the firm is operating and above all you want to keep operating within the difficult competitive environment you face.

Question :

1.As the HR Manager, Identify and define the problem related the negotiation regarding Luke's return to work. (10 Marks)

2.What are the Surface Interests and Needs of the Union Representative in regards to Luke's return to work? Justify why you believe these are Surface Interests and Needs. (10 Marks)

3.What are the Surface Interests and Needs of the HR Manager in regards to Luke's return to work? Justify why you believe these are Surface Interests and Needs. (10 Marks)