A Multinational Company specialized in food processing has been

operating in Bangladesh for about 3 decades. The Company has recently

decided to expand its production and shift the factory to a new location,

about 20 kilometers away from its present site. The workers transferred to

the new site were originally living in the town. Hence, the union

demanded an increase of TK. 2000 per month in the salary, but the

company offered to give TK. 500 only to cover the transportation cost.

When the plant was being shifted to the new site, negotiations went on

uninterrupted between the Management and the Union on this issue.

However, both the parties could not come to a settlement even after 6

months.

The Management was firm on their decision even though the union

indicated some flexibility. The Union refused to compromise fully on the

issue. They adopted go-slow tactics to pressurize the Management. The

production went down drastically, but still the Management was firm on

their stand. In the meanwhile, the Management charge-sheeted some of the

workers who failed to meet the target and fired them.

Question:

1. How does the decision of the company affect labor management relations in

the context of the case organization? As a Labor Management Relations

Director, how would you go about resolving the issue?