Firstly, we defined our negotiation strategy as distributive bargaining. This
consensus was reached through intra-organizational bargaining as some of our views and
ideas differed slightly on how to approach negotiations.
As we are still feeling the aftershock of the deep recession that erupted a year
ago, our company’s resources are scarce. Hence Management has decided that any
improvement in work terms that will increase the company’s total cost significantly
(more than 2%) was not allowable. An important factor that contributed to our bargaining
power was the timing of negotiations. Canada's economy shed more than 43,000 jobs
last month and since October 2008, ...view middle of the document...
However, since the Union defined job security as their top priority
and would not compromise on the subject of employee lay-offs, we had to go with our
second plan that included our target point.
Our target which involved permitting contracting out in the case of business
expansion and emergency is an indication of our integrative bargaining negotiation
strategy. We emphasized Union’s joint interest in allowing us to expand our business
more efficiently in a manner that allows us to reduce costs and remain competitive in the
market. Increasing company profits will allow better compensation of employees in the
future. Also our clause of allowing contracting out in the case of an emergency, defined
as anytime the plant has to be shut down, would give the Union joint interest in this
issue; because this would ensure their workers’ ability to work rather than being forced
not to due to a temporary shutdown of the factory. This factor, the ability to continue
operations, contributed significantly to our bargaining power.
With respect to wages and length of agreement, management decided to negotiate
these issues together as our bargaining position was relatively strong due to collective
agreement trends in the manufacturing industry and poor economic conditions. These
issues were one of Bigsit’s main priorities, especially for wages, as it constitutes 94% of
the company’s total cost. Hence Management set a target point of a 1% increase in the
first year, followed by a 2% increase in the second and third years respectively. Firstly,
due to limited resources, there was a conflict between both parties as the Union’s and
Management’s initial offers differed drastically where Management’s goal was to
minimize any cost increase while Union aimed for an annual wage increase of 5%.
Fortunately, the Union clearly stated that contracting out was its priority while wages
were of lesser importance. Also, with wages being of low priority for Union and it being
the contrary for Management, the Union was willing to compromise on a lower wage
increase with a 3- year agreement should Management give a concession on other issues
such as benefits which led to Management achieving our target point through integrative
With paid holidays being of lesser importance to management, our strategy was
to use it as a device to improve conditions for employees in order to achieve our target
points for the abovementioned issues, wages and contract length. Since the cost of wages
for a paid holiday is $17,708 we viewed this as a cheaper alternative to providing higher
wages, benefits or shorter length of agreement. Also understanding that Management
previously provided 11 paid holidays, we recognized that it was unreasonable to keep the
paid holidays at 9 per year. As a result of our target being reached in the...