CONFIDENTIAL BARGAINING ISSUES: COUNTY BEER COMPANY

MANAGEMENT SIDE

DO NOT DISCUSS WITH THE UNION BARGAINING COMMITTEE BEFORE OR DURING THE SIMULATION.

This memo provides instructions to members of the management bargaining team representing the County Beer Company for the upcoming first contract negotiations with Local $1$ of the Beer Union. The bargaining team is instructed to deal with the issues referred to here and any issues raised by the union at the negotiations. Your team is directed to negotiate an agreement with the union that, to the extent possible, falls within the limits prescribed in this memo. If any issues arise in negotiations that are not covered in this memo your team is authorized to settle those issues on the best terms possible.

Note: While County Beer is interested in expanding production $($by possibly hiring more employees$),$ it also needs to maintain or cut costs in order to remain relevant in a fiercely competitive industry. Several of the options discussed below are being considered in direct response to this reality.

The collective agreement on pgs$.219-223$ of the TB forms the template $($the starting point$)$ upon which these negotiations will be based.

Wages:

$1.$ The beer industry is fiercely competitive, not only for beer sales but for workers as well, particularly skilled Beer Makers. Lately, we have had several employees move to big city competitors who offer better benefits and pay. Therefore, the company is willing to give a reasonable wage increase $(3-4\%),$ but we fear that the Union will seek to bargain a full wage catch up to the highest paying competitors $($as high as $7-8\%)$ immediately, rather than over time. Do not agree to anything beyond $4\%!$

$2.$ County Beer recently became aware of another micro$-$brewery that successfully negotiated for a two$-$tiered wage system. According to this contract term, we could hire new workers at a lower wage rate than existing employees and experience cost savings. Try to negotiate this into the first agreement; we really need this flexibility.

$3.$ County Beer would also like to bargain a merit pay system into the collective agreement of some sort in order to motivate employees. However, it has heard that unions often resist merit pay systems. For this first agreement, try to get the Union to accept a compensation system that includes merit pay. Introduce merit pay into the new collective agreement even if it only forms a small proportion of total compensation at this point.

Automation:

$4.$ A new Bottle Sorting technology has been developed specifically for the growing microbrewery market. The technology automatically detects and sorts of bottles and can operate $24$ hours a day, thereby significantly reducing the number of bottle sorters needed. We estimate that with this technology we would need only $2$ Bottle Sorters to operate the machinery. The cost savings from eliminating $8$ Bottle Sorters would almost pay for the automated bottle sorter machinery in $2$ years. Make sure the collective agreement terms do nothing to restrict us from adopting this kind of automation.

Seniority:

$5.$ County Beer is hearing rumours that the Union may be looking for greater protection of seniority rights $($i$.$e$.$ they may argue that Articles $9\mathrm{.}03$ and $14\mathrm{.}04$ aren't good enough$)$ Keep the wording in the template agreement $($whereby seniority is only "a consideration", as we need the flexibility it gives us in deciding such matters as who gets laid off and the timing of vacations.

Grievance Procedures:

$6.$ a$)$ County Beer understands that the Union may be looking to introduce contract language to make it a mandatory requirement that a union representative be present at disciplinary meetings, that strict time limits be set in the grievance procedure, and that written reasons for the discipline are provided to any disciplined employee. Be prepared to counter these arguments, in case they come up$.$

b$)$ County Beer is concerned about the language in Article $5\mathrm{.}02$ of the template collective agreement that makes the timelines in the grievance procedure mandatory $-$ unless the union agrees to extend them. With so few managerial staff, we are concerned that sometimes it may be difficult to meet the timelines and so we would like a more flexible procedure that permits the arbitrator to relieve against strict timelines if no injustice would be done to the Union or the Grievor.

Contracting Out:

$7.$ County Beer has two custodians who work after hours $(4$ p$.$m$.$ to midnight$)$ and receive a shift bonus of $$1\mathrm{.}00/$ hour. There is an external cleaning contractor that provides cleaning staff at a significantly lower cost than what County Beer pays its custodians. However, current language in the template collective agreement does NOT permit contracting out if it will lead to layoffs. Keep this $($or similar wording$)$ OUT of our new collective agreement.

Leaves:

$8.$ We are hearing rumours that the Union will try to negotiate greater bereavement leave