Negotiation Simulation: Bargaining Power

In general, bargaining power refers to factors that influence the outcome of the agreement between two parties. The concept is frequently discussed in negotiations between employers and the unions and defines the concessions from both sides. Bargaining power is influenced by a large number of determinants, such as external and internal factors. Furthermore, these parameters vary significantly, depending on the party. For instance, the nature of the employer’s bargaining power differs drastically from the core concepts of the union’s bargaining power. The former usually is affected by the inventory levels, competitive position in the market, public opinion, safety precautions concerning the continuation of operations and bargaining structure, and the exact time of the collective bargaining (Suffield & Gannon, 2020). The bargaining power of the union depends heavily on the characteristics of the strike, such as support of employees during the strike, the funds, and how effective the strike might be against the employer (Suffield & Gannon, 2020). Furthermore, similar to the employer’s bargaining power, public opinion is a significant factor in the union’s bargaining power.

In this particular case, a collective agreement between Clean Right Partners Inc (employer) and Allied Service Union Canada (ASU) (union), there also several specific circumstances alongside the general factors influencing the bargaining power. The current employer had already concluded two collective agreements with ASU without any significant conflicts of interest. The first contract was concluded with the help of mediation, an introduction of the third party with the objective to find a compromise, and the second agreement was concluded with no warnings of strikes or lockouts. Therefore, the two parties have a significant history of collective agreements and were able to determine the conditions without any conflicts. However, there has been a rumor of the potential merger or acquisition of Clean Right Partners Inc, which presents additional pressure on the employees and the union. At present, there is no information concerning mergers in the collective agreement affecting the potential outcome of the bargaining.

Contract Negotiation Simulation

Concerning the current collective agreement negotiation, there are several concerns for both the employer and the union.

Concerns for the Employer

1. ‘Union security’ bargains for the removal of Article 1.02 e) and demands hiring more part-time workers to replace the subject of the article. Essentially, it prohibits the substitution of workers on vacation, which might severely reduce the bargaining power of the employer due to the vast importance of bargaining unit interdependence (Suffield & Gannon, 2020).
2. The union demands the reduction of seniority for vacation entitlement. For instance, the five weeks (10%) are suggested after eleven years, which is a more than two times shorter period than the current statement (25 years and longer).
3. ‘Hours of work’ entry obliges the employer to pay for a certain number of hours if the shift is canceled. The union demands this new addition to the collective agreement to ensure compensation and stable income for the employees.
4. ‘Seniority’ entry requires the employer to assign seniority status to workers after 60 instead of 180 calendar days. Seniority provides a large number of bonuses, such as employee benefits, sick leave, etc.
5. The ‘sick leave’ condition increases the current credit accumulation of 4 hours (half-day) per month to 16 hours per month. The four-time increase will result in 24 days of paid sick leaves for senior workers instead of 6 days in a full calendar year. Such conditions might severely affect the overall productivity of the company and allow employees to manipulate the system into receiving paid vacation instead of sick leave. Furthermore, there are no legal regulations that oblige employers to pay for sick leave; thus, all the conditions presented in the collective agreement are subject to change (Suffield & Gannon, 2020).

Concerns for the Union

1. Clarification concerning the merger/acquisition of the Clean Right Partners with/by a renowned provincial cleaning. While it is not part of the collective agreement, the potential merger presents specific difficulties for the union and employees.
2. ‘Grievance procedure’ entry demands the introduction of the ‘complaint stage’ before initiating the grievance process. While it is a reasonable request, it might create opportunities for the abuse of authority to influence the decisions of workers. However, if properly regulated, it might increase the speed and effectiveness of the feedback procedure.
3. ‘Discipline and Discharge’ entry allows the employer to conduct disciplinary verbal rebukes without the representation of a steward. Similar to the previous entry, it allows for the abuse of authority.
4. The employer suggests changing the compensation of parking tickets according to the voluntary aspect. It implies that the company might pay for the parking infractions if it acknowledges that the violation is unavoidable.
5. The employer proposes to keep the current ‘sick leave’ conditions but eliminate the possibility of transferring the unused accumulated points over the year.

Proposals

However, despite the potential concerns of the collective bargaining agreement, it is possible to prepare several proposals in order to achieve the ideal language formulations that satisfy both sides with a minimum number of concessions. Frequently, it is reasonable to provide options for the mutual gain of both the employer and the union, since the interests of one party do not necessarily contradict the objective of the other one. Furthermore, conservative distributing bargaining might have negative consequences on the relationship between the employer and the union due to the transparent designation of winning and losing parties (Suffield & Gannon, 2020). Lastly, to determine the degree of proposal outcomes, it is essential to maintain a proper balance between resistance and target points of both management and union (Suffield & Gannon, 2020). As a result, the following proposals were chosen on behalf of the two parties.

Proposals on Behalf of the Employer

1. Concerning vacation entitlement, the employer presents the following conditions: Two weeks (4%) after one year but less than three (3) years; three weeks (6%) after three (3) years’ service but less than seven (7) years; Four-weeks (8%) after seven (7) years but less than fifteen (15 years); and five (5) weeks (10%) after fifteen (15) years (Article 11).
2. Concerning ‘hours of work’, the employer agrees to the compensation equal to 2 hours (1/4 of the daily wage), in case the shift was canceled due to the decision by the employer (as opposed to an unexpected shift cancel due on behalf of clients).
3. Concerning the ‘sick leave’ accumulation increase, the employer suggests the following: 20.01 seniority employees will accumulate a day (8 hours) per month to a maximum of (12) days in a full calendar year. Any unused days will be paid out annually without the possibility to transfer the unused accumulated points over the year.

Proposals on Behalf of the Union

1. Concerning the potential merger/acquisition, the employer must ensure that the workers will keep their occupations or provide the payoff money equal to eight monthly wages.
2. Concerning the ‘grievance procedure’ and ‘discipline and discharge’ entries, the union agrees to the conditions; however, it obliges the employer to provide written recommendations alongside verbal instructions, in case the duty or the work process of the employees change after either the ‘complain stage’ or verbal disciplinary lecture.
3. Concerning the compensation of the parking tickets, the union agrees to the conditions of the employer; thus, the employer should compensate the expenses only in case the parking infraction is deemed unavoidable by the accountable management.

Rationale

As mentioned briefly before, the primary rationale for the proposals is derived from interest-based bargaining, which attempts to produce mutual benefits for the employer and the union. The current strategy also allows for equal standing of the two parties, which promotes further cooperation. The four major principles of the framework are transparent separation of people from the problem, emphasis on the interests, mutual gain, and objective criteria (Suffield & Gannon, 2020). The proposals for the collective agreement imply the mutual acceptance of interest-based bargaining, collaboration of the parties, bargaining in good faith, and respectful behavior. However, it is essential to state that the objective situation might differ from the cooperative relationship described in the current paper, which might eventually cause a conflict of interest between the parties and initiate consequent strikes, lockouts, and other preventative measures. Nevertheless, for the sake of the current paper, the interest-based approach is chosen. As a result, the collective agreement most likely will be concluded without significant concessions, conflicts, or strikes.

Reference

Suffield, L., & Gannon, G. L. (2020). Labour relations (5^th edition). Pearson Canada.