COLLECTIVE BARGAINING SIMULATION



COLLECTIVE BARGAINING SIMULATION

At this point you have been placed in two teams – MANAGEMENT and LABOR. This business is a local microchip assembly plant that employs skilled labor to assemble microchips that are sent to major computer manufacturers around the world. The current contract runs out in a week and both sides are working feverishly to settle on a new contract. The union has promised to take a strike vote if a new agreement cannot be reached.

Here are the highlights of the existing contract:

1. Workers are hired at an hourly rate of $19.50 per hour. All employees are given a 5% raise for every year of the contract.

2. All workers are given individual health coverage – hospital and doctor’s care – and the employee has to pay $100 per month toward the premium for that coverage.

3. The work week is 40 hours and overtime is paid at 1 and ½ (time and one-half) per hour.

4. There is no paid vacation time. National holidays such as Christmas, New Years, Memorial Day, July 4th, Labor Day and Veteran’s Day are not work days because the business is closed.

5. Workers are “on call.” Their shifts can be placed wherever necessary. The shift manager must post the shifts one week in advance.

6. Management may hire part time workers. These workers do not qualify for health benefits.

7. Workers must use special clothing within plant assembly areas. All workers will receive a $400 per year allowance for the cleaning and maintenance of this clothing.

8. Promotion must come from within the ranks of existing workers. The management must first seek to recruit supervisors and managers from the existing workforce. Managers and supervisors are not members of the union.

9. Every six months, all employees must be tested for drug use.

10. Workers can be dismissed after two negative evaluations. All workers must be evaluated in writing every three months. Evaluations are based on punctuality, productivity, cooperation and initiative. Workers can receive a yearly bonus. The bonus pay will amount to the same percentage as the increase in the individual workers’ productivity.

HISTORY: This is a very successful local business. It has thrived on its connections to IBM and it had delivered a quality product because of the loyalty and devotion of its employees. As a result of the 2008 economic recession and competition form foreign producers of microchips who can produce at much cheaper expense ratios, demand for the company’s product has decreased. The management is under intense pressure to cut costs and at the same time maintain the quality of its product.

Workers have been positive about their experience with the company. Lately, they feel that their loyalty has not been recognized by the company. They wish to substantially increase their wage and benefit package but they also recognize that times are not easy and the company is in jeopardy because of the slow economic recovery.

THE TASK

1. Students will be assigned to one of two teams – labor or management.

2. Each team is to develop a package to be presented to the other side for consideration. The packages will be developed in private without the opposing team present. Each team will select one recorder.

3. Each group is to pick two negotiators who will work out a settlement in the classroom with the other as advisors and recorders.

4. Two “time out” periods will be allowed for each side to get together and reformulate their demands during the negotiation session.

5. Participants will be granted two homework credits if the packages they develop are realistic and if the negotiators bargain “in good faith” according to my judgment. Negotiators and recorders will be given one extra homework credit.

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