Northville Transit Management

Bargaining Book

MHR 522 Industrial Relations

Ian Sakinofsky
Section 2, Tuesdays, 3-6PM
October 26, 2010

Regina Azevedo
Josh Hanson
Varinda Nandhra
Jessica Meneguzzi
Allison Reid
Ruth Tupe
Amyleigh Wood

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Northville Transit Management
Bargaining Book
The following is the bargaining strategy for Northville Transit Management to resolve the dispute
union dispute with the ATWU. This document analyzes the possible outcomes and outlines best
practices to reach to an agreement in good faith.

TEAM MEMBERS:
City Councillor,
Regina Azevedo
Chair of the Transit Committee of Council
Director of Industrial Relations (Chief Negotiator) Ruth Tupe

President, Northville Transit Josh Hanson

Managers, Northville Transit Varinder Nandhra, Jessica Meneguzzi

Assistant Directors of Human Resources Amyleigh Wood, Allison Reid

Part A) Bargaining Objectives

Our bargaining objectives will be mainly focused on: reducing overtime hours, resolving general
disputes between the union representatives and ourselves, as well as introducing innovative
strategies to resolve issues before they escalate to a strike.

First and foremost, our objective is to reduce overtime hours, as it will greatly influence our overall
costs in a positive way. Costs will drop substantially since the need to pay overtime workers a higher
wage will be eliminated by bringing in temporary workers, who will be paid at a regular rate. This will
ensure that the permanent employees are not over-worked and allow more people to be employed.
This can be used as a secondary bargaining point with the union representatives; by demonstrating
that greed for extra hours will not be ultimately not be beneficial for either party. A better solution is
to provide the overtime hours will be given to temporary employees on the spare board, which will
be strictly managed by the company.

Our next crucial objective will be to resolve the disputes and grievances of the union as efficiently as
possible and posing our solutions as the best resolution and that we have taken their interests into
consideration. Of course, we will fight a more favorable position for management but in essence, it
would be better to find a solution to satisfy all parties. The bargaining session is planned out to be as
democratic as possible, with an emphasis on demonstrating to the union that the company is
looking after the workers’ best interest. However, in order to arrive at a more favourable and

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profitable conclusion for the company, calculated concessions must be offered so that the union will
fall back on less demanding propositions. Our goal is to do so within reasonable boundaries and
without letting our opposing team detect any overly demanding requests.

Our final goal is to bring innovative propositions to the table in order to arrive at a common ground in
a more efficient way. This method will also give the union the impression that our management team
is truly attempting to reach a mutually beneficial agreement, and will take attention away from the
union’s primary interests. This tactic is a way for us to handle grievances while at the same time
steering the final outcome in our favour. Hopefully, this will allow us to bypass the union’s potential
decision to initiate a strike.

Part B) Initial Position

1. 0% WAGE INCREASE
Our rationale behind freezing wages is influenced by the decrease in ridership by 2% over the past
year. Amongst the drop in sales, advertising and other expenses are estimated to grow by 3% as
well. Therefore we are already loosing 2% of sales from our “per ride revenue”; which currently is our
main source or revenue (80%) and an additional 3% increase in expenses. In the past, to
compensate for these increases and decreases, we had increased bus fare by 20 cents.
Consequently, this created negative publicity and angered the public, therefore another increase is
not an option. We need to reduce expenses, implement lean management and financial
redundancies to improve our financial situation. We are aware that the union will resist against this
point, however increasing wage is not going to be possible with out adjusting other variables.

2. INTRODUCE A SPARE BOARD COMMITTEE

As mentioned, Northville transit increased bus fare by 20 cents to compensate for the increase in
expenses and the drop in ridership. This led to public anger and uproar, therefore, our alternative to
avoid this situation is to implement by scheduling flexibility on our routes. This will serve as a counter
measure to avoid provoking the citizens of Northville. Our aim is to provide better service to increase
ridership and revenues. To achieve this flexibility, we propose to use temporary workers to reduce
overtime on full time employees, as it will reduce costs. However, these “spare” drivers are not
guaranteed any minimum number of hours per week, as their role is to fill in sick workers and
employees on leave. The details of this spareboard is negotiable, however “spare drivers” must work
their entire shifts in one time slot and these positions are not necessarily guaranteed to the current
temporary employees.

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3. REDUCE UNIFORM ALLOWANCE
Another form of reducing company costs is by extending the annual replacement of uniforms to a
two-year basis. Certain uniforms are replaced yearly: trousers, neckties, shirts, and caps. However,
these uniforms may still be usable for another year. Therefore, we have decided to replace these
clothes every two years, thus resulting in cuts in annual costs.

4. REMOVE REPORTING TIME

Currently the employees of Northville transit are being paid $9 to report back to us when they check
in. We find this is unnecessary and that we can carry on the business without this extra cost. We
plan to have better scheduling practices to compensate for this current system. The money we
usually pay to employers we will invest in an information management system that will manage a
real-time database to quickly calculate schedules and automatically email these schedules to
employees well ahead of time. Any last minute shifts will be covered by the spare board.

5. 2 YEAR CONTRACT EXTEND

Normally our contracts are evaluated and then redesigned on an annual basis. This benefits the
company financially and secures any agreements for another year: saves us less headache to deal
with uncooperative employees, and money saved on agreed upon cut backs can accumulate for
another year.

6. $2 MEAL ALLOWANCE
The $2 meal allowance is simply put into action to make our employees happy and compensate for
their hard work. We want to show that the money that is being saved from cutting costs around the
company is going back to our employees. This action is to maintain peace and encourage a positive
work attitude towards our management.

Part C) Expected Fall Back Position

Upon receiving the employers’ initial proposal, we anticipate their demands will conflict with ours. In
any bargaining strategy, we anticipate that the opposing side will exaggerate their needs and leave
room for negotiation. The fall back plan is where we intend to ask for our actual desired demands
and numbers and present them as a negotiation. We will reiterate our strong stance on
implementing the spare board. We will propose settling other demands before addressing this issue
due to such a large disagreement.

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We assume that the employees will ask for a one-year contract, as opposed to our initial two year
contract proposal. We will offer to concede or negotiate the contract in exchange for 100%
coverage in health benefits where financially able possible. Currently we are only offering the
employees 70% coverage in dental benefits. Compared to the statistics of other towns’
transportation benefits, the unions are offering 100%. We will use the jump in benefits as a possible
selling point in order to help push the idea of developing a spare board.

At this time we are not offering the employees a meal allowance. We expect the employees to
propose adding a meal allowance to regular hours or overtime hours. We initially proposed a $2
meal allowance, and anticipate a higher request from the employees. If it is brought to negotiation,
we are prepared to raise the meal allowance to a maximum of $5-7 dollars.

The maximum wage increase that is allowed is 4%. We also anticipate that they will ask for 4% or
higher. We will counter offer with an increase of 0.5%. A warning must be brought to the attention of
the employees. If there is a substantial wage increase of 4% then the fare to the public must be
increase accordingly in order to compensate. This, in the past, has shown to decrease ridership
substantially, which in turn decreases profits, and may lead to company downsizing and schedule
cuts as well as reduced transit schedules. We will also inform the employees that in order to raise
the wages and remain financially stable, taking the spare board into consideration is highly
recommended on their part.

Part D) Resistance Points

Although we may concede a few of our initial propositions throughout bargaining with the union,
management will in no form forfeit our suggestion of developing a spare board committee.
Management is going into this collective bargaining with the addition of a spare board as our main
objective and we have prepared ourselves with other probable fall back positions to offer the union,
which will in turn help us to solidify the attainment of this demand.

The development of this spare board offers numerous gains to management, as well as a few for the
union members. The proposition of a spare board will ultimately save us 3600 overtime hours, which
is now a significant amount of hours in which management is paying with overtime rates and leaving
our budget with no room to budge. Without the development of the spare board, it will be nearly
impossible to remain under the $1.125 million constraint set upon management. If the union initially

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states that they will not agree to this demand, then as management we will have no room to offer a
reasonable wage increase and full dental benefits due to the overall cap on the budget that is
currently in place. Therefore, management has developed an additional side offer to go alongside the
spare board demand to help entice union. The side offer will be introducing the concept of
“Flextime” to union members only if the spare board is developed.

Flextime is an employee benefit that is in place in many different institutions and management views
the addition of this to Northville Transit will benefit both sides. Incorporating flextime allows full-time
employees to work a maximum one hour longer on their shift and rather than being paid over-time
for it, they will be able to bank that time and continue to accumulate it throughout the year. The
accumulation of this flextime will then be available for the employees to use that time as vacation
time, which is a benefit for the union. For example, an employee who regularly works an 8am-4pm
shift, can decide to work to 5pm and bank that one hour of flextime. Once the employee has banked
7 hours, they can then take that time and use it towards a vacation day, with the only stipulation
being that the vacation day must be taken during the summer. Placing the condition of flextime
being used during the summer months is an advantage to management due primarily to the fact that
during the summer Northville Transit runs on a reduced schedule largely in part to children being out
from school. Thus, having more employees on vacation during this time will in no form setback the
operations of the transit system nor will it affect our costs.

Management feels that with the addition of flextime to the union, it will help ensure that we attain the
spare board as additional vacation time is something we are positive the union members could not
argue against having. This offer has been created not only with management’s best interests in
mind, but also with the union’s as we want to demonstrate to the union that we are not trying to
work against them, but rather with them. We are hoping that this resistance point with advantages to
both sides will help cement our attainment of the spare board.

Part E) Estimated Costs

The following are the estimated costs for various scenarios in the simulation. We have taken into
account 6 main variables, which are: wages, overtime hours, meal allowance, dental benefits,
contract length, and reporting time. We have analyzed the net costs at every scenario in different
options, which subsequently have a small increase in each variable. Of course, the ideal situation is
Option 1 with Option 7 being the least favourable. But the ideal situation is between options 2-6 as it
still allows concessions in this area while remaining under budget.

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CALCULATIONS WITH ALL FULL-TIME EMPLOYEES IN PLACE

CALCULATIONS WITH PART-TIME EMPLOYEES MOVED TO SPARE BOARD

Notes:
 Fares would have to be increased by 4.5% to make Option 6 financially feasible
 Fares would have to be increased by 17% to make Option 7 financially feasible

Part F) Bargaining Strategy

After analyzing the situation, it seems that our best solution is to take an interest based or integrative
bargaining strategy. Given the poor relationship that has unfolded in the past few years, it is in our
best interest to propose a “win-win” situation for all parties involved and focus on interests. This
would be a wise move in order to disarm the constrained relationship with the union and to acquire
organizational autonomy and control over the situation. However, this also implies that there will be
compromised within our demands, but we calculated the costs and we have concluded that if we
are able to establish the true spare board, we have won the collective bargaining agreement.
As previously mentioned, the spare board committee has mutual interests for both parties as it
reduces the amount of temporary employees but still provides the scheduling flexibility needed for

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workers on leave. The benefit of the union is that it provides more working hours for permanent
employees. The huge benefit for Northville Transit is the huge reduction in overtime costs.

However we also recognize the importance of properly handling grievances, therefore we will make
the appropriate concessions that are within our financial range. Judging by the demands that were
sent, they seem to have a strong aggressive stance on all issues on the table. To counter this, we
will take an open and honest attitude during the process but more importantly showing the practical
reasoning for our decisions and stating the facts. First we will reveal our budgetary limitations, which
gives good justification for not being able to grant all requests. Furthermore, being transparent with
our finances will be a good show of our honest intentions. Our message would be “We would like to
grant as many benefits as we can without endangering our finances.”

We will also be attentive listeners and allow the union to openly express their demands. This is
another show of our good faith in the bargaining process. This initial standpoint will hopefully disarm
their demands and allow for a smooth transition to realistic bargaining. We notice that many of their
demands conflict with one another and are too idealistic. A way to make things realistic is to simply
ask how they justified those demands but also point out the cause and effect of those decisions.
With that being said, we would recommend to them to prioritize the items of utmost importance and
bargain to come to an agreement on those terms.

Our integrative suggestion is to implement our spare board committee proposal, which is a way to
bring both parties together on the issue of vacation time and overtime hours. However, we will not
allow temporary employees to be hired full-time unless they are on the spare board committee, this
is leverage for us to promote this idea.

Our wildcard is suggesting the idea of “Flextime” which was covered in detail earlier. We decided to
save this idea last, as it is the best offer we can provide to the union without having to majorly
compromise our budget. It is the most innovative solution that we have and shows great benefits on
both parties. We feel this would be a great way to end the bargaining on a positive note.

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