Northville Transit Management Bargaining Book
MHR 522 Industrial Relations Ian Sakinofsky Section 2, Tuesdays, 3-6PM October 26, 2010
Regina Azevedo Josh Hanson Varinda Nandhra Jessica Meneguzzi Allison Reid Ruth Tupe Amyleigh Wood
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Northville Transit Management Bargaining Book The following is the bargaining strategy for Northville Transit Management to resolve the dispute union dispute with the ATWU. This document analyzes the possible outcomes and outlines best practices to reach to an agreement in good faith. TEAM MEMBERS: City Councillor, Chair of the Transit Committee of Council
Regina Azevedo
Director of Industrial Relations (Chief Negotiator)
Ruth Tupe
President, Northville Transit
Josh Hanson
Managers, Northville Transit
Varinder Nandhra, Jessica Meneguzzi
Assistant Directors of Human Resources
Amyleigh Wood, Allison Reid
Part A) Bargaining Objectives Our bargaining objectives will be mainly focused on: reducing overtime hours, resolving general disputes between the union representatives and ourselves, as well as introducing innovative strategies to resolve issues before they escalate to a strike. First and foremost, our objective is to reduce overtime hours, as it will greatly influence our overall costs in a positive way. Costs will drop substantially since the need to pay overtime workers a higher wage will be eliminated by bringing in temporary workers, who will be paid at a regular rate. This will ensure that the permanent employees are not over-worked and allow more people to be employed. This can be used as a secondary bargaining point with the union representatives; by demonstrating that greed for extra hours will not be ultimately not be beneficial for either party. A better solution is to provide the overtime hours will be given to temporary employees on the spare board, which will be strictly managed by the company. Our next crucial objective will be to resolve the disputes and grievances of the union as efficiently as possible and posing our solutions as the best resolution and that we have taken their interests into consideration. Of course, we will fight a more favorable position for management but in essence, it would be better to find a solution to satisfy all parties. The bargaining session is planned out to be as democratic as possible, with an emphasis on demonstrating to the union that the company is looking after the workers’ best interest. However, in order to arrive at a more favourable and PG 2
profitable conclusion for the company, calculated concessions must be offered so that the union will fall back on less demanding propositions. Our goal is to do so within reasonable boundaries and without letting our opposing team detect any overly demanding requests. Our final goal is to bring innovative propositions to the table in order to arrive at a common ground in a more efficient way. This method will also give the union the impression that our management team is truly attempting to reach a mutually beneficial agreement, and will take attention away from the union’s primary interests. This tactic is a way for us to handle grievances while at the same time steering the final outcome in our favour. Hopefully, this will allow us to bypass the union’s potential decision to initiate a strike.
Part B) Initial Position 1. 0% WAGE INCREASE Our rationale behind freezing wages is influenced by the decrease in ridership by 2% over the past year. Amongst the drop in sales, advertising and other expenses are estimated to grow by 3% as well. Therefore we are already loosing 2% of sales from our “per ride revenue”; which currently is our main source or revenue (80%) and an additional 3% increase in expenses. In the past, to compensate for these increases and decreases, we had increased bus fare by 20 cents. Consequently, this created negative publicity and angered the public, therefore another increase is not an option. We need to reduce expenses, implement lean management and financial redundancies to improve our financial situation. We are aware that the union will resist against this point, however increasing wage is not going to be possible with out adjusting other variables. 2. INTRODUCE A SPARE BOARD COMMITTEE As mentioned, Northville transit increased bus fare by 20 cents to compensate for the increase in expenses and the drop in ridership. This led to public anger and uproar, therefore, our alternative to avoid this situation is to implement by scheduling flexibility on our routes. This will serve as a counter measure to avoid provoking the citizens of Northville. Our aim is to provide better service to increase ridership and revenues. To achieve this flexibility, we propose to use temporary workers to reduce overtime on full time employees, as it will reduce costs. However, these “spare” drivers are not guaranteed any minimum number of hours per week, as their role is to fill in sick workers and employees on leave. The details of this spareboard is negotiable, however “spare drivers” must work their entire shifts in one time slot and these positions are not necessarily guaranteed to the current temporary employees. PG 3
3. REDUCE UNIFORM ALLOWANCE Another form of reducing company costs is by extending the annual replacement of uniforms to a two-year basis. Certain uniforms are replaced yearly: trousers, neckties, shirts, and caps. However, these uniforms may still be usable for another year. Therefore, we have decided to replace these clothes every two years, thus resulting in cuts in annual costs.
4. REMOVE REPORTING TIME Currently the employees of Northville transit are being paid $9 to report back to us when they check in. We find this is unnecessary and that we can carry on the business without this extra cost. We plan to have better scheduling practices to compensate for this current system. The money we usually pay to employers we will invest in an information management system that will manage a real-time database to quickly calculate schedules and automatically email these schedules to employees well ahead of time. Any last minute shifts will be covered by the spare board.
5. 2 YEAR CONTRACT EXTEND Normally our contracts are evaluated and then redesigned on an annual basis. This benefits the company financially and secures any agreements for another year: saves us less headache to deal with uncooperative employees, and money saved on agreed upon cut backs can accumulate for another year.
6. $2 MEAL ALLOWANCE The $2 meal allowance is simply put into action to make our employees happy and compensate for their hard work. We want to show that the money that is being saved from cutting costs around the company is going back to our employees. This action is to maintain peace and encourage a positive work attitude towards our management.
Part C) Expected Fall Back Position Upon receiving the employers’ initial proposal, we anticipate their demands will conflict with ours. In any bargaining strategy, we anticipate that the opposing side will exaggerate their needs and leave room for negotiation. The fall back plan is where we intend to ask for our actual desired demands and numbers and present them as a negotiation. We will reiterate our strong stance on implementing the spare board. We will propose settling other demands before addressing this issue due to such a large disagreement. PG 4
We assume that the employees will ask for a one-year contract, as opposed to our initial two year contract proposal. We will offer to concede or negotiate the contract in exchange for 100% coverage in health benefits where financially able possible. Currently we are only offering the employees 70% coverage in dental benefits. Compared to the statistics of other towns’ transportation benefits, the unions are offering 100%. We will use the jump in benefits as a possible selling point in order to help push the idea of developing a spare board.
At this time we are not offering the employees a meal allowance. We expect the employees to propose adding a meal allowance to regular hours or overtime hours. We initially proposed a $2 meal allowance, and anticipate a higher request from the employees. If it is brought to negotiation, we are prepared to raise the meal allowance to a maximum of $5-7 dollars.
The maximum wage increase that is allowed is 4%. We also anticipate that they will ask for 4% or higher. We will counter offer with an increase of 0.5%. A warning must be brought to the attention of the employees. If there is a substantial wage increase of 4% then the fare to the public must be increase accordingly in order to compensate. This, in the past, has shown to decrease ridership substantially, which in turn decreases profits, and may lead to company downsizing and schedule cuts as well as reduced transit schedules. We will also inform the employees that in order to raise the wages and remain financially stable, taking the spare board into consideration is highly recommended on their part.
Part D) Resistance Points Although we may concede a few of our initial propositions throughout bargaining with the union, management will in no form forfeit our suggestion of developing a spare board committee. Management is going into this collective bargaining with the addition of a spare board as our main objective and we have prepared ourselves with other probable fall back positions to offer the union, which will in turn help us to solidify the attainment of this demand. The development of this spare board offers numerous gains to management, as well as a few for the union members. The proposition of a spare board will ultimately save us 3600 overtime hours, which is now a significant amount of hours in which management is paying with overtime rates and leaving our budget with no room to budge. Without the development of the spare board, it will be nearly impossible to remain under the $1.125 million constraint set upon management. If the union initially
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states that they will not agree to this demand, then as management we will have no room to offer a reasonable wage increase and full dental benefits due to the overall cap on the budget that is currently in place. Therefore, management has developed an additional side offer to go alongside the spare board demand to help entice union. The side offer will be introducing the concept of “Flextime” to union members only if the spare board is developed. Flextime is an employee benefit that is in place in many different institutions and management views the addition of this to Northville Transit will benefit both sides. Incorporating flextime allows full-time employees to work a maximum one hour longer on their shift and rather than being paid over-time for it, they will be able to bank that time and continue to accumulate it throughout the year. The accumulation of this flextime will then be available for the employees to use that time as vacation time, which is a benefit for the union. For example, an employee who regularly works an 8am-4pm shift, can decide to work to 5pm and bank that one hour of flextime. Once the employee has banked 7 hours, they can then take that time and use it towards a vacation day, with the only stipulation being that the vacation day must be taken during the summer. Placing the condition of flextime being used during the summer months is an advantage to management due primarily to the fact that during the summer Northville Transit runs on a reduced schedule largely in part to children being out from school. Thus, having more employees on vacation during this time will in no form setback the operations of the transit system nor will it affect our costs.
Management feels that with the addition of flextime to the union, it will help ensure that we attain the spare board as additional vacation time is something we are positive the union members could not argue against having. This offer has been created not only with management’s best interests in mind, but also with the union’s as we want to demonstrate to the union that we are not trying to work against them, but rather with them. We are hoping that this resistance point with advantages to both sides will help cement our attainment of the spare board.
Part E) Estimated Costs The following are the estimated costs for various scenarios in the simulation. We have taken into account 6 main variables, which are: wages, overtime hours, meal allowance, dental benefits, contract length, and reporting time. We have analyzed the net costs at every scenario in different options, which subsequently have a small increase in each variable. Of course, the ideal situation is Option 1 with Option 7 being the least favourable. But the ideal situation is between options 2-6 as it still allows concessions in this area while remaining under budget. PG 6
CALCULATIONS WITH ALL FULL-TIME EMPLOYEES IN PLACE
CALCULATIONS WITH PART-TIME EMPLOYEES MOVED TO SPARE BOARD
Notes:
Fares would have to be increased by 4.5% to make Option 6 financially feasible Fares would have to be increased by 17% to make Option 7 financially feasible
Part F) Bargaining Strategy After analyzing the situation, it seems that our best solution is to take an interest based or integrative bargaining strategy. Given the poor relationship that has unfolded in the past few years, it is in our best interest to propose a “win-win” situation for all parties involved and focus on interests. This would be a wise move in order to disarm the constrained relationship with the union and to acquire organizational autonomy and control over the situation. However, this also implies that there will be compromised within our demands, but we calculated the costs and we have concluded that if we are able to establish the true spare board, we have won the collective bargaining agreement. As previously mentioned, the spare board committee has mutual interests for both parties as it reduces the amount of temporary employees but still provides the scheduling flexibility needed for PG 7
workers on leave. The benefit of the union is that it provides more working hours for permanent employees. The huge benefit for Northville Transit is the huge reduction in overtime costs.
However we also recognize the importance of properly handling grievances, therefore we will make the appropriate concessions that are within our financial range. Judging by the demands that were sent, they seem to have a strong aggressive stance on all issues on the table. To counter this, we will take an open and honest attitude during the process but more importantly showing the practical reasoning for our decisions and stating the facts. First we will reveal our budgetary limitations, which gives good justification for not being able to grant all requests. Furthermore, being transparent with our finances will be a good show of our honest intentions. Our message would be “We would like to grant as many benefits as we can without endangering our finances.”
We will also be attentive listeners and allow the union to openly express their demands. This is another show of our good faith in the bargaining process. This initial standpoint will hopefully disarm their demands and allow for a smooth transition to realistic bargaining. We notice that many of their demands conflict with one another and are too idealistic. A way to make things realistic is to simply ask how they justified those demands but also point out the cause and effect of those decisions. With that being said, we would recommend to them to prioritize the items of utmost importance and bargain to come to an agreement on those terms.
Our integrative suggestion is to implement our spare board committee proposal, which is a way to bring both parties together on the issue of vacation time and overtime hours. However, we will not allow temporary employees to be hired full-time unless they are on the spare board committee, this is leverage for us to promote this idea.
Our wildcard is suggesting the idea of “Flextime” which was covered in detail earlier. We decided to save this idea last, as it is the best offer we can provide to the union without having to majorly compromise our budget. It is the most innovative solution that we have and shows great benefits on both parties. We feel this would be a great way to end the bargaining on a positive note.
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