Are We “In The Zone”?
Rikki Wang was the HR generalist serving three grocery outlets in a major metropolitan centre in western Canada. She graduated from the HR management program at MacEwan University and had secured the present job three weeks after graduation. The three stores were unionized with a total of 44 employees in one UFCW bargaining unit among the three sites. Wang carried responsibility for labour relations and health and safety for the regional chain of stores. Her other colleague picked up responsibilities for all remaining HR duties.
The union had served notice to bargain last month for a renewal of the existing contract expiring on June 30. Rikki had already begun her preparatory work by talking to store management about issues with the current contract and other operational matters that would likely be key contributors to the success of the grocery chain in the next five years. She had also done market research on compensation and cost-of living allowance trends both regionally and at the provincial level, as well as speaking to the corporate lawyer who provided HR advice to her from time to time. A meeting was planned later next week with the general manager, finance supervisor, legal counsel and heads of the receiving/stores, cashiers and produce sections to discuss developing bargaining strategies for the upcoming bargaining meetings with the UFCW team. Nikki had a good relationship with her union local president and chief steward. There was going to be a new UFCW business agent involved in the upcoming bargain round, who was reported to be “much tougher” than the recently retired head office union rep Nikki had dealt with since starting her job.
Due to the competitive nature of the retail grocery industry and inroads made by the emerging web-based food-to-your-door suppliers, Nikki’s company had tended to set terms and conditions for work of the bargaining unit at or slightly below the competition. Price pressures from much larger competitors also played a factor in preparing for the upcoming bargaining round with the union. From her consultations, Nikki was in the midst of preparing bargaining strategy on three key issues that surfaced from her consultations: call-in pay; seniority links to vacation entitlements; and cost-of-living allowances. Her research had revealed the following on these key issues:
• Call-in pay: the grocery chain currently follows provincial employment standards requirements—employees must be paid for a minimum of three hours if they’re asked to go to work or attend training, even if it’s for a period of less than three hours, unless it’s because the employee is unable to continue working. Regional competitors also adhere to provincial Employment Standard Act (ESA); one non-union store pays a four-hour call-in pay allowance.
• Seniority links to vacation entitlements: the grocery chain currently follows provincial employment standards requirements—less than 1 year of service (union contract allows for 4% proration); 1-5 years at ESA requirement (two weeks) and greater than 5 years (three weeks). Seniority-driven entitlements were discussed in the last round of bargaining but were withdrawn by the union in lieu of wage rate adjustments. Many of the bargaining unit members (67%) have eight or more years of service. Survey evidence shows other unionized food outlets (including those with UFCW locals) factor in seniority to vacation entitlements starting after three years of service.
• Cost of living (percentage)—regional and provincial forecasts for anticipated contract period: Year 1 (2.50%); Year 2 (2.75%); Year 3 (3.2%).
1. Work out estimated bargaining zone levels (initial, target and resistance) anticipated from union negotiators for each of these three contract items.
2. Work out estimated bargaining zone levels (initial, target and resistance) to be developed by the employer in this case?
3. On each of these issues, how would you answer Nikki’s question, “Are we ‘in the zone’?”