This assignment relates to the following Course Learning Requirements:

CLR#3 - Conduct the steps in the collective agreement process

CLR#4 - Employ necessary steps in employee/management disagreements and grievance procedures

Objective of this Assignment: To effectively develop a management strategy for union negotiations that is aligned with corporate mission, vision, values and organizational goals.

Instructions:

Step 1: Pre-assignment - scenario background

You are the senior HR leader in an organization. There was a significant restructuring of the organization over the last year, with all new management in place. Likewise, there is a new union president whom you have found very difficult to deal with. This person seems to take bargaining from behind closed-doors meetings to place them in front of media with an unbalanced statement of the facts about progress being made, or salary and benefits being offered. It would be correct to say that union/management relations are not good.

You have been with the organization for almost 20 years, and have come up through the ranks. You are the only person in management that has the history of the organization and was involved in past negotiations. Because of your time within the organization, you know almost all of the employees and their family/living situations. You also know from prior research, that many households live from paycheck to paycheck, and do not have savings to maintain their current living standards if there is a strike, lockout, or layoff.

The major item you know the union will take significant issue with is the removal of retiree benefits. This was something that was negotiated into the agreement in the early eighties, but with new accounting rules coming into place several years ago, organizations now must account for the future cost of this accrued benefit obligation. This has a major impact on financial results and potential for dividends.

One final item that is on everyone's horizon is that, at the moment, your industry is in slow global demand. In the next year or two, it will be poised to either slow down significantly, or it will take-off with massive expectations for sales and profit. However, at this time, it is not clear which way the industry is headed.

1. The Organization's present stance:

• 5 year agreement.
• Zero wage increases in year one, and 1% in the second through fifth year of a new agreement.
• No other concessions.
• The president of the organization is expecting a number of concessions and has also indicated he is willing, if necessary, to create a new organizational structure that will result in job losses if the union won't accede to the organizational stance.
• The board of directors wants the removal of retiree benefits from future collective agreements.

1. The union's present stance:

• 2 year agreement.
• 3% wage increase in each year of the new agreement.
• Increases to compensated allocations for safety gear.
• Increases to vacation entitlements.
• Restrictions on contracting temporary and part-time work to outside workers.
• Retiree benefit coverage to remain as is.

1. You will also need to keep the following points in mind:

• The last round of negotiations, which is due to expire in 12 months, was a 3 year term.
• The grievance rate has increased significantly since the last round of negotiations.
• Union-management relations are strained.
• The demand for your organizations' product is slow, but steady - it may increase or decrease dramatically in the next few years (hint: research an industry of resource production that is similar to this scenario to see how they are mitigating risks as well as preparing for higher demand).

Step 2: Assignment This assignment will consist of material you learned in the main content of your course as well as the extra readings and videos you were provided. All material from this course should give you background for a well-rounded assignment. You will also need to research comparable companies to find out what types of strategies and bargaining agreements they have. You may also identify a specific type of organization for your report (i.e. automobile manufacturing plant, horticultural warehouse, chocolate bar factory, etc.)

You are responsible for putting forward a bargaining proposal to the rest of the executive leadership team that meets the board of director's mandate to reduce costs while maintaining an understanding of employee needs and potential market realities. You know this will be difficult to do, give the current relationship with the union, but you want to create a bargaining proposal that will be win-win and acceptable without a large amount of disagreement.

Your bargaining proposal should include:

1. A management strategy document will contain the following components. Each sub-bullet point below provides suggested content for each component. Your focus should be largely on strategy and how all of the components below align to the organizations vision, mission, values and objectives. While specifics of items like wages, compensation, benefits, arbitration and grievance procedures, market demand, and retirement packages are not given to you directly in this assignment, you should be able to research each of these items to come up with a proposal that is fair:

1. The composition of the management negotiating team that you are leading and the rationale for each position, including your own:

• The size of the team
• The departments/areas that will be represented
• The roles and responsibilities of each person on the negotiating team and their power of approval for negotiating points

1. Management's objectives - hint, each of these can be in bullet point, and may be taken from other collective bargaining documents found in your research - citations must be provided:
   • In a paragraph or two, summarize the mandate from the president/board of directors (outlined in the scenario above) and risks and opportunities you see resulting from this mandate
   • Review of existing policies, practices and highlight items of interest
   • Data to support the objectives - choose any or all of the following that you can easily find information for:
     1. Compensation per employee including overtime worked - assume a wage that is 1.3 - 1.7 times higher than provincial, regional or global average - choose a reasonable number of employees for the industry you have chosen - i.e. don't choose 10 employees for a globally competitive tractor manufacturing company;
     2. Paid holidays - use provincial statutory holiday requirements to determine time lost vs. costs;
     3. Vacation pay - each employee would receive a provincial minimum of 10 vacation days per year - but normally, collective bargaining agreements provide for more - create a table outlining scales of vacation days and choose the number of your employees that fall into each level of the grid;
     4. Leaves;
     5. Allowances - meal allowance, education allowance, clothing allowance, safety equipment allowance, etc.;
     6. Accident/incident rates (if possible);
     7. Group benefits costs;
     8. Internal environment demographics on current workforce in your organization - provide your best estimate on items such as age of your workers, how long with the company, how many are close to retirement;
     9. External environment demographics - such as similar competitors' workforces, labour shortages or surpluses, itinerant workers, temporary foreign workers, etc. can be included here;
     10. Training funding.
2. Costing - based on your calculations above, provide current costs
   • Provide the cost of each item above that would be in the collective agreement;
   • Provide the total (average) cost per employee;
   • Estimate the cost or savings of proposed changes - you will use this in your final bargaining position;
   • Organizational information on current or anticipated changes to business conditions, policies, processes, etc.

1. Union campaign and strategy. Review and summarize the union's campaign (based on the outlined information in the scenario). Similar to the management strategy, include the following information:

1. Determine the union bargaining committee - who and how many would be involved (provide rationale);
   1. Size of the team
   2. Union members that would be represented
   3. The interests of each group
   4. Summarize union demands and objectives - hint: each of these can be bullet point and taken from the pre-assignment scenario above);
   5. Make an opinion of how the union will negotiate based on your initial executive proposal;
   6. Examine the financial strength of the union - assume they have collected enough money from 9 years (three consecutive collective agreements) to fund their members if there is a lockout/strike;
   7. Describe any problems that may exist within the union;
   8. Explore bargaining history with other locals;
   9. Identify common grievance issues that may have arisen from the current collective agreement (again, this can be from research of various companies if the information is readily available);
   10. Review and summarize grievance processes and arbitration awards.

1. Bargaining position analysis. Review the areas listed below that can occur based on compromise / no compromise positions:

1. A strike/lockout plan;
   1. Identify the possible outcomes of a strike/lockout from a risk management perspective;
   2. Draft an action plan outlining roles and responsibilities of committee members and other management personnel;
   3. Consider the use of replacement workers and how this aligns with the organization's values and objectives;
   4. Dispute resolution opportunities/procedures;
      • Identify what can be done to resolve issues informally;
   5. A draft bargaining notice and schedule
   6. Make a formal notice to the union;

1. Negotiation development - create three potential proposals that could mix and match (i.e. wage increases, increases to vacation, stronger language around contracting out, retirement benefits) and provide compromise for each side that you believe take each sides' needs and wants into account.

1. Remember you represent organizational managements' interests but you want to also explore strategies that will improve union-management relations and justify these decisions to your directors.
2. Also justify each proposal based on management and union stances as well as market potential listed in the pre-assignment scenario.
3. Provide changes in costing to each proposal that you identified in part 1-c.

Step 3: Formatting and size expectations

1. Present your proposal in present tense, with references to the past bargaining agreement and the future state of your organization and its competitive abilities depending on concessions.