We are representing a Union. And this will be a Bargaining simulation. Please can you develop the 4 initial offers that will be presented to Management from the Union and also the Bargaining Book.

This is the background information for the organization:

Community GroceryBackground InformationCommunity Grocery was born in 1935 when three small-town generalstores joined forces to continue operating when threatened by the worstof the Great Depression. As widespread unemployment wreaked havocacross the nation, small communities clung to life by relying on food andfarm supplies purchased at the local general store. The loss of the onlyplace to buy life-sustaining necessities would likely precede theabandonment of farms, other businesses, and eventually entire towns.Facing the collapse of their communities, the founders of CommunityGrocery banded together to stay open.From this legacy, Community Grocery has evolved into a modern retailgrocery chain. It is well-known across the province for its steadfastcommitment to small-town values, endeavouring to treat customers andemployees as valued members of a small community. Presently, 1,700employees work in 20 stores spread across the province. Two hundred ofthese employees are managers and therefore excluded from thebargaining unit. The remaining 1,500 employees are organized in thesame bargaining unit, represented by the Grocery Workers' Union(GWU), Local 306, herein referred to as the Union. There are five urbanstores and fifteen rural stores. The urban stores are larger and offer amore upmarket modern grocery experience with a focus on a large in-store bakery, an artisan-style butcher shop, and gourmet produce andgrocery departments. In all, 550 of the bargaining unit members work inthese stores. The remaining 950 employees work in fifteen rural stores,which serve as a regional base for outlying areas and offer a more basicretail food line but include a varied range of additional goods, such ashardware, lawn and garden, and hunting and fishing products.

Community Grocery enjoys a strong reputation across the province forbeing a good corporate citizen; it's the kind of company where not onlydoes the company sponsor the little-league team but its employees areoften the coach and have kids on the team. Many of the stores havebeen operating for over sixty years and it is not uncommon forgrandparents to run into their children and grandchildren while shopping.Over the years, Community Grocery has been responsive to the evolvingneeds of rural and urban consumers while retaining its proud ruralheritage. In addition to its community involvement and long history ofserving rural communities, Community Grocery has developed a well-earned reputation for providing good-paying, secure careers with benefitsand a pension plan. Indeed, a large portion of the workforce is made upof long-term employees with decades of service and with no intention ofever leaving the company. The turnover rate at Community Grocery is 20percent, which is considerably lower than the industry norm. The vastmajority of the grocery industry has moved to a high-turnover model ofcasual, part-time jobs with low pay, without job security, benefits, orpension.Regrettably, the senior management team at Community Grocery (CG)feels obligated to amend the current employment model and bring it moreinto line with the lower-cost industry standard. For the past fifteen years,a worrying trend has persisted. Increasingly, consumers are choosing toshop at other grocery stores because they offer similar products at alower cost. Competitors are able to offer lower prices because they havereplaced higher-cost long-term employment with a low-cost modelfeaturing pay that is close to the minimum allowable wage, with nobenefits or pension and little paid time off (aside from the minimums inthe employment standards legislation). New hires work in the same jobfor a year or two before quitting and moving to another low-paying retailjob or into a higher-skilled and better compensated career in anotherindustry. There is no expectation of pay raises, job security, benefits, or

pension provisions. Applicants are willing to accept these conditionsbecause they often have no other option; better jobs are simply notavailable.Management believes that labour costs at CG are 20 percent higher thantheir competitors'. The additional cost is passed on to consumers in theform of higher prices. On average, the price differential is estimated at 8percent. While the modern consumer, who is presented with manygrocery retail options, may be willing to pay an additional 3 or 4 percentto shop in a store that has superior community engagement and acompelling history and that provides good jobs, they are clearly notwilling to pay an additional 8 percent. At a steady rate, seemingly loyalcustomers are shopping elsewhere.At the same time, senior management notes that the labour market haschanged drastically in recent years. A growing segment of workingCanadians are looking for casual or part-time employment while they findthemselves on the fringes of the labour market. Generally they are either:students earning extra money while completing secondary or post-secondary training for a career most likely outside of the grocery industry;semi-retired seniors interested in earning income to supplement personalor social retirement funds; full-time caregivers, often women, who areinterested in only short-term, part-time work while their children are athome and who plan to return to another career once their children are inschool or out of the house. In addition, as a result of recent federal andprovincial immigration policies, a large number of new Canadians havesettled in the area and are looking for temporary work to gain Canadianwork experience and earn a survival income while they completecertification and training requirements to seek employment in careers inwhich they have pre-immigration experience. Senior managementbelieves that ignoring this growing supply of cheaper labour is a mistake,especially while competitors are taking full advantage.

While labour relations at CG has always been good, senior managementhas recently identified the Union as part of the problem that the companynow finds itself in. Since the Union's certification in 1981, it hasnegotiated several entitlements for its members that are uncommon inthe rest of the industry, which is almost entirely non-union. For instance,the following clauses stipulate some of the existing entitlements. Clause 4. Wage Schedule: The wage schedule is identified inTable 1. Employees graduate to the next level after one year ofservice. A Clerk will top-out at $28.00 per hour after 5 years ofservice. Management approval is required for graduation to theTeam Leader Position and is reserved for long-service employeeswith an exceptional service record when a new area team leaderis needed. Clause 11. Pension: The Employer agrees to match any employeecontributions up to 4 percent of the Employee's annual earnings.The Employer will hire and pay the fees for a professionalinvestment firm to manage the fund. After 2 years the fund is fullyvested and there are no restrictions for withdrawing funds. Clause 14. Just Cause Provision: After the first year ofemployment, employees are covered by the Just Cause Provision,

which permits termination only for just cause or in the event of astore closure.The Employer is concerned that Community Grocery has not kept pacewith change and has failed to evolve along with the industry and adopt alow-cost labour model. Consequently, competing food retailers havelower operating costs and can offer substantially lower prices. In part, theEmployer blames the Union and the rigidity of the collective agreementfor failing to incorporate lower-cost casual employees. The Just CauseProvision is also considered a major obstacle for achieving lower labourcosts. The Employer believes it is at a fork in the road and began thenegotiation process by presenting the Union with an ultimatum: allow forsome manner of low-cost labour in the form of a two-tier contract or facestore closures and wide spread layoffs. The Employer has detailed a planto close the less profitable stores - two urban and eight rural stores -resulting in approximately 700 bargaining unit member layoffs.The Union has responded with shock and horror. At first the threat wasconsidered a nasty bargaining tactic to scare the Union into accepting atwo-tier contract; however, after further discussions, the Union isconvinced that the Employer is sincere. Accordingly, the Union hasagreed to some form of two-tier contract as a means to avoid devastatinglayoffs that would affect almost half of the bargaining unit. This does notmean that the Union is happy about the new classification of casualworkers.For the Union, two-tier contracts pose a real threat to bargaining unitsolidarity because they create two very different types of members: new,younger workers with very little privileges (low wages, no benefits orpension or job security), and the long-standing employees with muchmore favourable entitlements. With two very different types of workers inthe same bargaining unit, it is difficult for union leadership to build the

kind of solidarity required to oppose management when they attempt toclaw back a provision that only affects one of the groups.In this round of bargaining the Employer is asking the Union to allow anew employee classification: the Casual Classification. New employeeshired under this classification would be excluded from many of thecollective agreement provisions. In return the Union would avoid layoffsfor existing employees. The Union worries that in the next round ofbargaining, the Employer will demand a major concession of wages orpensions from the Permanent Classification (the existing bargaining unitmembers) in return for a small wage increase for the CasualClassification. The Union is then in a position where it must ask theCasual Classification members to go on strike (risk their jobs and gowithout pay) to protect the higher wages and pensions of the PermanentClassification members, while downplaying the reality that in the lastround of bargaining, the very same employees saved their own jobs byallowing all the collective agreement exceptions for the CasualClassification.This is a tough sell indeed, and perhaps even the beginning of the end ofthe Union. If a union cannot threaten the employer with a realisticprospect of a strike, then it cannot achieve bargaining goals; once themembership realizes that the Union can't effectively oppose theEmployer, decertification is sure to follow. The Union suspects this maybe the Employer's unstated and ultimate intention.Furthermore, the Union is very concerned about the declining real wagesof its existing members. Many of the long-term members have notreceived a raise in decades because they top-out at the level 6 pay rate.Even at Level 6, members only earn approximately $54,000 a year,before taxes. The Union notes that most of their members struggle toraise a family on this income and exist, at or below, the poverty line.

There are four outstanding bargaining issues that must be reconciled inthe 90-minute bargaining session. In no particular order, they are: CasualClassification Wages, Permanent Classification Wages, CasualClassification Job Security, and Casual Classification Pension. The orderof priority and further details on each priority will be provided in theprivate team information distributed in class. Have fun with thissimulation. In the past, participants have found the bargaining simulationsto be a valuable learning experience.

This is the Private information for our side (the Union):

Union Private Information Private Information for the Union Bargaining Team A Two-Tier Collective Agreement at Community Grocery Important: This information is CONFIDENTIAL to the Union bargaining teams. Do not share it with members of the Employer bargaining team. Serving as members of the Union bargaining team, you have been given a strong mandate to minimize the disparities between the existing members (Permanent Classification) and future members (Casual Classification). At the same time, you have been charged with protecting the existing entitlements of members. In order of priority, the Union's bargaining issues are listed here: 1.Casual Classification wages 2.Permanent Classification wages 3.Casual Classification pensions 4.Casual Classification job security Casual Classification Wages The Union objects to the Employer's aim to reduce a portion of the jobs into low paid, dead-end transient positions. The wage rate of the Casual Classification should be similar to that of Clerk Level 1, Permanent Classification, or as close to it as possible. The parties have agreed to limit the negotiation of the Casual Classification wages to two issues: a. Starting rateIndexed to the starting rate of the Clerk Level 1 schedule or slightly less, such as $2 per hour less. It is important to index the Casual Classification wage rate to some level of the Permanent Classification. b. Annual increasesEqual to the annual increases in the Permanent Classification or as close to it as possible. Permanent Classification Wages The Union recognizes that, even with the financial constraints, there is an opportunity to gain a wage increase for the existing members. However, the Union is deeply suspicious of the Employer's motive for offering a wage increase. The Union will have trouble justifying wage increases for existing members to future members who are payed considerably less. Although the workforce is older (mostly middle aged or older) and most have dependents, very little in the way of savings, and are in dire need of a wage increase, the Union cannot be seen as trading basic union rights such as job security and decent wages for significant wage increases for existing members. However, a reasonable increase for Permanent Classification employees is much needed, irrespective of the terms of the Casual Classification. Both Parties have agreed that changes to the wages of the Permanent Classification will only be expressed as an across-the-board percentage increase or decrease. There is one outstanding issue: a. An across-the-board increase for the Permanent Classification Casual Classification Pensions The Union rejects the Employer's assertion that the modern grocery industry has no place for fairly paid jobs that offer the traditional host of supports, such as a pension plan. Furthermore, the Union maintains that if the Employer provides fair compensation, which includes benefits like a pension plan, new employees will be interested in a long-term career with the company. The Union's leadership has agreed that the current terms of the pension plan for the Permanent Classification must be protected and some form of pension plan must be available to the Casual Classification. The parties agree that negotiations concerning the pension plan are limited to changes to the matched Employer funding and will be expressed as a percentage of annual salary. a. The Union is determined to maintain its current pension plan for the Permanent Classification. The Casual Classification must have the same pension plan as the Permanent Classification (matched up to 4%) or as close as possible. Casual Classification Job Security Job security is a priority for the Union, as it is viewed as the only means left to preserve some form of long-term employee security. Without substantially similar job protection, the two classes of employees will struggle to build the solidarity required by the Union to resist the Employer. Without the protection of a Just Cause Provision, employees are vulnerable to job loss. The company will attract only transient workers, thus fulfilling the Employer's prophecy that the grocery industry is largely made up of less committed, short-term employees rather than the type of workers looking for the rewards that come from long-term union membership. The Union wants the following: a. Strict limits on the number of Casual Classification employees to be hired, expressed as a ratio: for every existing 10 Permanent employees, 1 Casual Classification employee may be hired (10:1). If this ratio is not achievable, then try for as close as possible. b. Casual Classification employees are to be covered by the existing Just Cause Provision in the collective agreement. If not achievable, then severance payment beyond statutory minimums for Casual Classification employees terminated without cause, to be expressed as days' pay per months of service. At a minimum, affected employees should receive 2 days' pay for every month of service in addition to the minimums required by employment standards legislation. c. After 1 year of service, Casual Classification employees will graduate into the Permanent Classification at the bottom of the seniority schedule and be entitled to all of the provisions of the collective agreement afforded to Permanent Classification employees.

Below is a bargaining book template:

Bargaining Book Template

Bargaining book by following the structure provided below. All sources must be cited.

1. A statement and discussion of your overall strategic objectives for this round of negotiations

• What do you hope to achieve at the aggregate level?
• Why this is appropriate?

1. A statement and discussion of how you will conduct the negotiations.

• What approach and tactics will you use to persuade your opponents?
• Why?
• What do you hope to gain by bargaining this way?

For each issue prepare:

• Opening Position: These are the first proposals you table and should be sufficiently realistic to avoid a loss of credibility on your part.(do not go directly from your opening position to your target position in one step - instead, plan for the series of steps you will take as you move toward your target)
• Target Position: This is what you should be able to attain assuming competent negotiations and the absence of unforeseen circumstances. (do not go directly from your target position to your fallback position in one step - instead, plan for the series of steps you will take as you are pushed toward your target)
• Fallback/ Trade off position: This is your bottom-line position beyond which you are unwilling to make further concessions. Having determined this position, you must consider how you will respond if this goal cannot be met.

Justification for your position:

Why are your proposals fair and appropriate? This section should contain information, statistics, etc. that support your position on this particular issue. This is what you will use during the negotiations to convince your opponents that your position is justified and that they must make concessions. (do you have enough points to support your positions?)

Estimation of your opponent's fallback position:

This forces you to consider your opponent's position when you develop your own strategy and provides guidance as to what concessions may be required on your part to obtain an agreement

Estimated cost:

Where possible you should attempt to calculate the costs or savings associated with your proposals. This includes your opening, target and fallback positions. In addition, a running total of costs should be kept throughout the negotiations.

Example: If the average wage were $21.37

$21.37/ hour x 30 employees	=	$641.10/hour (Hourly Total Wage Cost)
$641.10 x 40 hours per week	=	$25,644.00 (Weekly Total Payroll Cost)
$25,644.00 x 52 weeks	=	$1,333,488.00 (Annual Total Payroll cost)

Costing should reflect all three positions and all monetary issues.