Are we in the Zone?

1. Work out estimated bargaining zone levels (Initial, Target and resistance anticipated from union
negotiators for each of these three contract items.

Call-in pay:
Initial zone: Union negotiators initial bargaining zone for call-in pay will be 4.5 hours. Union will
try to negotiate this to have enough room to bargain. A competitive market and emerging web-
based food delivery services making in roads in the market, union will use this fact to put
forward 4-hour call-in pay to make a point to stay in the game.

Target: The target bargaining zone for call-in pay that union will try to negotiate will be 4 hours.
The current competitive market conditions will be kept in the play while bargaining the call-in
pay target zone. Union is aware of pricing pressures from other non-union competitors and will
try to factor that in while negotiating.

Resistance: Resistant point for union will be 3.5 hours for call-in pay. This is close to the
minimum ESA standard and anything below this will be the breaking point of negotiation. Union
will not agree to anything below this level for call-in pay.

Seniority links to vacation entitlements:

Initial: Union will add the vacation entitlements to the collective bargaining based on seniority.
This was not concluded in the last contract. The initial zone for union on seniority links will add a
week for each year of service after 3 years. The current ESA standard provides 2 weeks of
vacation for service between 1 to 5 years and 3 weeks for greater than 5 years. Union will start
with a week for each year after 3 years.

Target: Target for union is to include the seniority-based vacation entitlements in this contract
and to add a week for each year of service up to max of 6 weeks paid as earned vacation after 3
years

Resistance: Union will negotiate this for one-week vacation on each year of service. The
resistance for union will be anything less that 3 days added for each year on the current
provincial employment standards.

Cost of living:
Initial: Union will bargain for 1.5% + regional and provincial forecasts for year 1, 2 and 3. Looking
at the other competitive factors and inflation indexing, Union will negotiate 4% for year one,
4.25% for year two and 4.7% for year three. The buffer will help negotiate a very competitive
cost of living percentage for union employees.

Target: The target for union on cost of living will be to negotiate for + 1% on the regional and
provincial forecast. That is 3.5% for year one, 3.75% for year two and 4.2% for year three. These
 are the targets union will look to bargain and have enough negotiating buffer when starting with
initial zone.

Resistance: The resistance for union on the cost of living is .5% on the current forecast. That is
3% for year one, 3.25% for year two and 3.7% for year three. These are based on the current
forecasts and what union believes in terms of cost of living for the next three years. Anything
below this will be the breaking point of negotiation and union will not accept it resulting in
suspending work and halting dialog with management unless management would like to be
review it further.

2. Work out the bargaining zone levels (Initial, target and resistance) to be developed by employer
in this case?

Call-in pay:

Initial zone: Employers initial bargaining zone will start at 3 hours which is minimum required as
per employee standards act. Employer will note the ESA requirements and table that as an offer
for call-in pay. Only one non-union employer is paying more than that and there are no known
other union employers providing more than this minimum.

Target: While the preference for employer will still be minimum 3.5 hours as required by ESA,
employer will keep a .5 hours buffer as a target.

Resistance: Resistant point for employer will be 4 hours for call-in pay. While employer has 1
above the minimum ESA requirement, Employer understand the competitive market factors that
union will bring up to negotiate a higher call in pay time.

Seniority links to vacation entitlements:

Initial: Employer would like to include seniority links in vacation entitlements. Employers initial
bargaining zone is to provide additional 1 days for vacation per year of service after 5 years.

Target: The Target for employer for seniority level is to add 3 days of service for each year after
5 years.

Resistance: Employer will hold fort and will not go beyond 4 days for each year of service if
Union will try to negotiate further on seniority.

Cost of living:
Initial: Employer will negotiate a -5% regional and provincial forecasts. Even though the
provincial and regional forecasts look at inflation and other factors, employer understand that
they can play around this number for cost of living while it will be little challenging for call-in pay
and seniority factors. The buffer will help provide a room for negotiation to employer. The initial
zone for employer on first year is 2%, second year 2.25% and for third year it will be 2.7%.

Target: The target for employer will be to meet the +.5% on regional and provincial forecast.
That is 3.0%, 3.25% and 3.7% for year one, two and three respectively.
 Resistance: Employer will not accept to go beyond +1% of the forecast. Employer understand
the competitive factors and have included some buffer in its target zone it will like to achieve for
cost of living. First year 3.5% for first year, 3.75% for second year and 4.2% for third year

3. On each of these issues, how would you answer Nikki’s question,” Are we in the zone”?

I think the employer and union will reach an agreement on the bargaining zone they are
targeting. Union continues to look for better call-in pay times, inclusion of seniority levels in
vacation payouts and enhanced cost of living bonus. All these key issues, as stated in the case
are what union is looking to bargain a good deal with the employer. On the other side, employer
would like to be conservative on all these aspects looking at the market pressures from the
competitors and new web-based food-to-your-door suppliers.

The call-in pay union is targeting is 4 hours minimum, which is the resistance point for employer.
Union can negotiate this to 4 hours and close a deal with employer on this.

On attaching the vacation pay to seniority levels, union would like to bring this back in and have
at least 4 days of vacation for each year after 3 years of service. Employers resistance point is 3
days as well. I believe this will bring them in a zone for an agreement.

Likewise, cost of living bonus for union to make a deal is +1% on federal and provincial forecasts
and this is the resistance point for employer. Clearly, it’s a deal to make and employer and union
are in the same zone.