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Bargaining Report

1228 words - 5 pages

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...

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