A number of years ago the United Food and Commercial Workers Union organized 800 workers of the 1035 employees at one of the Wilson Brothers food operations in Toronto, Ontario. The employees include skilled tradespersons, apprentices, machine operators, food mixers and packers, shipping and receiving personnel and labourers. Previously, the plant had been in operation as a non-union shop.  Management had tried to convince employees not to join the union. The employees were paid quite well, in the view of the company.

However, after a lengthy campaign the union organizing drive was successful and there have been a number of successful negotiated settlements between the parties in the interim.  That said, there have also been some difficult times with contract negotiations going to a strike deadline prior to a settlement being reached.

As Director of Human Resources you have asked Jim Byer, the Toronto HR Manager, to act as the company spokesperson to negotiate the renewal of the collective agreement and he and his team will be working with Ralph Goodall, the chief spokesperson and business agent for the union.

The terms of the last collective agreement provided wage and benefits have resulted in costs in the final year of the contract of:

Average Hourly Wage Rate:                                      $30.00

Wage Impacted Benefits:                                           $  4.50

Non-Wage Impacted Benefits:                                    $  3.00                                    

Total Compensation Rate:                                          $37.50

These numbers will be used as the base year for future calculations.                                   

Jim Byer received the final set of union proposals in the mail this morning from Ralph Goodall and Ralph requested a meeting to start negotiations next week.  The union proposals were as follows:

Union Proposals

  1. General wage increase to all job classifications – 20%
  • Term – 1 year agreement
  • Add new: Contracting Out Clause: The company will not contract out any work currently done by members of the bargaining unit without the written consent of the union.  Under no circumstances will employees in the bargaining unit be laid off as a result of contracting out work.
  • Add  new: Technological Change Clause: The company will give the union 12 months written notice of any technological changes that it plans to make in any of the company operations.  Under no circumstances will employees in the bargaining unit be laid off as a result of technological changes made in company operations.
  • Add new: Pension Plan Company Contribution of $500,000 in the first year of the new collective agreement.
  • Add new: Safety Boots Requirement, Company Paid, $50.00 per year per employee.
  • Add new: The company will provide the union with bulletin boards on company premises to use for union business.
  • Add new: The company will deduct union dues from each bargaining unit member and remit the dues to the union on a monthly basis.
  • Change 3:01 to Read: Probationary Period-Decreased from Ninety (90) to Thirty (30) days.
  1. The union reserves the right to add proposals to this list at any point during the negotiations process.

Respectfully submitted – Ralph Goodall UFCW

Jim Byer read the list of union proposals and he wasn’t pleased.  That being said he was aware that this was just an initial position from the union and that there was no need to panic just yet.  He noted that there were some things in the union proposals that meant some difficult bargaining ahead if the union was serious about their position.  It was time to get down to work preparing for the negotiation.


  1. Make all calculations, per worker, per hour.
  2. Assume a 40 hour work week and 52 weeks per year.
  3. If unsure of the format of the Memorandum of Agreement, then use the template provided in your readings. Remember to include all clauses, changes and revisions.

Jim knows the current cost figures but needs to calculate the costs of the union’s proposals.

He will calculate the Average Hourly Wage Rate (AHWR), the Wage Impacted Benefits (WIB) and Non-Wage Impacted Benefits (NWIB) and the resulting Total Compensation Rate (TCR) based on the union’s proposed increases to the existing figures. Later, he will have to calculate the cost of both the pension and safety boot proposals.  And Jim will have to make these calculations per worker, per hour so that he can present senior management with the labour costs that would result from agreeing to such a proposal.  Then Jim will have to calculate a realistic counter proposal.  He has already calculated that using the current figures the WIB equals 15% of the current AHWR and NWIB equals 10% of the current AHWR.

Question 1

Jim will need to calculate the impact of the 20% wage increase proposed by the union. In order to do this he will have to make the following calculations:-

a-show the impact on AHWR

b-show the impact on WIB

c-show the impact on NWIB

d-calculate the new TCR for Wilson Bros in the first year of the new agreement if the company actually agreed to a 20% wage proposal as presented by the union. (5 marks)

Question 2

Jim will need to calculate the impact of the safety boot and pension proposal on the non-wage impacted benefit calculation in the first year of the new agreement.  He will assume each employee works a 40-hour week, 52 weeks per year.  Calculate the new non-wage impacted benefit (NWIB that would result from accepting the union’s proposals)? (5 marks)

Question 3

Jim doesn’t think he can agree to the union’s language on contracting out because as written it could severely limit the company’s flexibility.  What language, if any, should Jim propose to attempt to resolve this issue? (10 marks)

Question 4

Jim doesn’t think he can agree to the union’s language on technological change because as written it could severely limit the company’s flexibility. What language, if any, should Jim propose to attempt to resolve this issue?  (10 marks)

Question 5

How should Jim respond to Union Proposals #7, #8, #9 and #10?  (5 marks)

Question 6

If the parties reach an impasse during negotiations, discuss the process that they must follow prior to a legal strike or lockout scenario. Remember to cite relevant legislation (5 marks)

Question 7

Negotiations have completely broken down and a Mediator has been appointed by the government to help settle the agreement.  Discuss the Mediator’s final offer of settlement to the parties and draft a Memorandum of Agreement between the parties on that basis. (10 marks)

Criteria for Written Assignments

Percentage of grade  90-100% A+70-89% B-A60-69% C-B59% or less D-F
Understanding of Basic Conceptsshows understanding of all of the basic conceptsalways gives complete explanationsno errorsshows understanding of most of the basic conceptsusually gives complete or nearly complete explanationsvery few errorsshows some understanding of the basic conceptsgives partial explanationssome errorsshows little or no understanding of the basic conceptsgives explanations showing limited understandingmany errors
Communication of Required Knowledgecommunicates with clarity, precision and confidencealways uses appropriate terminologycommunicates with clarity and precisionusually uses appropriate terminologycommunicates with some claritysometimes uses appropriate terminologyunclearly communicated rarely uses appropriate terminology
Organization of Ideasorganized appropriately and in complex and logical waysorganized appropriately and logicallyorganized in a mechanical and sequential wayincompletely organized
Completenesstitle pagecompletereferences listedtitle pagecompletemay have a title pagemostly completeno title pageincomplete
References to the reading materialsprovides proper references for all concepts from readings inside and outside the course materials.provides proper references for most concepts from readings inside the course materials.provides proper references for some concepts from readings inside the course materials.provides few or no references.

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