Employee and Labour Relations

This article discusses the dynamics of employee and labour relations in three different companies and their bargaining power. It explores the impact of strikes and union negotiations on businesses. The companies discussed are Grocery-Right, PowerCo, and ChemicalCorp.

Running head: EMPLOYEE AND LABOUR RELATIONS
1
Employee and Labour Relations
Name
Institution

EMPLOYEE AND LABOUR RELATIONS 2
Company A
Grocery- Right is headed for negotiations with the union in regards to its employees’ wages. The
store is wary of the fact that if the union demands for an increase in the employees’ wages the
store’s financial status will be affected. The store is also afraid that in case the union decides to
strike, their customers will start shopping at their competitors, and it would be difficult to regain
them back. They have taken notice of the fact that even if they employ other employees, the
picketing outside the grocery’s store would still affect the customer flow as customers would not
like to be caught in between the picketing when there are alternatives stores where they can shop.
In this case, the union has greater bargaining power than Grocery right store since the
store has more to lose than the union. Several external and internal inputs are affecting Grocery
Right’s bargaining power. In this instance, if the employees decide to strike, their customer flow
will decrease, and in turn, their sale volumes will be affected. The union’s decision to strike is an
external input (Penn Foster Inc., 2017). Section 84 of the Labour Relations Code stipulates that
picketing and striking are legal under the Act (Ibrahim, 2018). Grocery-Right will, therefore, be
expected to prevent the strike from happening as a measure of safeguarding their business.
On the other hand, if they decide to increase their employee’s wages, it will create a
ripple effect as the products prices will have to be raised. As a result, consumers will be
prompted to shop in their competitor stores in a bid to avoid the high rates. Consumers in the
Alberta area are known to discriminate on a price basis. This means that if Grocery- Right was to
increase the prices, they would lose most of their customer to their competitors. If they choose
not to increase the prices of the products but still increase the wages, their financial status will be
affected gravely since the profit margin will be very minimal. This will destabilize the store’s

EMPLOYEE AND LABOUR RELATIONS 3
economic position in the market as they will not be able to compete with their competitors
adequately. They will be subjected to suffer losses due to the loss of customer flow and large
volume sales
The sociocultural input of the customers in the Edmonton area is that they usually have
difficulty in changing their shopping habits, but in the case, they do change, the effects will be
long-lasting. Consequently, this means that if the union was to strike, the consumer would prefer
shopping at other stores and as a result, Grocery-Right will lose its consumers. Since the
consumers have difficulty in changing their shopping habits, Grocery-Right will have a hard time
trying to win its customers back.
Grocery-Right had formed the notion that since their employment was low skill; they
could hire new employees and train them since unions do not usually have much control on low
skilled workers (Davey, 1972). Unluckily for them, the consumers in the area are known to be
reluctant to crossing the picketing line as it is hectic and will, in turn, prefer shopping at the other
stores. This situation will still be a predicament for Grocery-Right even if they decide to hire
other employees as the customer flow will still be affected. Moreover, the current market job in
Alberta is very competitive which will affect Grocery-Right’s probability of finding workers to
employ. This means if they fail to agree to negotiate and decide to utilize their strategy to find
new workers, they might have a hard time finding workers to employ and their business will still
be affected.

EMPLOYEE AND LABOUR RELATIONS 4
Company B
PowerCo, a manufacturing company, is heading to another round of negotiations with the
union in the Edmonton region. In this case scenario, the company will possess the greater
bargaining power. This is because the company has twelve plants where each plant is unionized.
The company conducts negotiations with the unions separately and as a result different collective
bargaining agreements are made.
The company also does not suffer high competition from other manufacturers since most
of its products are customized to fit its client’s needs. The fact that the company customizes its
products means that it has a client base of its own. This would mean that their economic position
in the market is secured since it does not have high competition for consumers from other
manufacturers. The consumers will always engage PowerCo when seeking to purchase certain
products due to the customization benefit offered by the company.
Hyman defines power as the ability of a person to control their physical environment and
the skill to ensure that the decision made by other people is in their favor (Hyman, 1975). In this
instance, PowerCo has ensured that each of the company’s twelve plants has twelve unions
which they always negotiate with at different times. The collective agreement reached by the
company and the unions are always different due to the multiple unions. This fact puts the
company in a greater bargaining position since it has multiple unions that are decentralized. If
the unions representing the different plant came together and formed one union, then they would
possess the greater bargaining power (Pettinger, 2012).
In the instance the workers decided to go on a strike, PowerCo will not suffer losses due
to the fact that it is horizontally integrated. The other plants will be able to compensate for the

EMPLOYEE AND LABOUR RELATIONS 5
lost production. The compensation of lost production puts PowerCo in a position of power since
it will not be desperate for it employees to return to work as their output will be covered. The
compensation also ensures that PowerCo will secure a steady flow of income since their
operations will not be profoundly affected. Consequently, it would be difficult for the union to
possess a higher bargaining power since the union’s strike will not affect the company. This is
because the company will still be able to compensate its losses by using the other plants.
The company’s plants have an estimate of one hundred and fifty to two hundred
employees in each plant. This means if one of the plants decides to go on a strike, the company
will be able to replace the workers easily even though it is considered as an unfair labor practice
(Farrell, 2008). The number of employees in each firm is minimal which consequently ensures
their easy replacement. The facts of the case have also stipulated that one plant’s lost production
can easily be compensated by the other plants. This means that in the instance the company
decides to replace the employees with new employees, their production will not be affected as it
will be covered by the other plants.
The company has adopted the policy on wage parity meaning their workers’ pay in all the
plants is standard. Even though the collective agreements reached upon by the unions are usually
different, the company has ensured that the pay and benefits to its workers are consistent
throughout the country (Richardson, 2003). The workers cannot, therefore, complain that they
are being subjected to low pay in comparison to their colleagues in the other plants across the
country. By doing so, Power Co has ensured it has possession of the bargaining power as the
unions will be obstructed from complaining of discrimination in their workers’ pay (Adams,
1983).

EMPLOYEE AND LABOUR RELATIONS 6
Company C
ChemicalCorp a large capital-intensive industrial chemical is a subsidiary to a multinational
chemical company which owns other subsidiaries worldwide. Chemical Corp has numerous
plants across the country which have employed from fifty employees to six hundred employees
per plant. The holding company of Chemical Corp has dominated the industry throughout the
years however competition has increased in the recent years. This means that the company is
facing active competition which it cannot afford to ignore. Previously ChemicalCorp was 100%
unionized, but that decreased to 2/3rds of the company since it started following the policy of
union avoidance (Lynk, 2009). The company started following the said policy with the intention
of closing down the unionized plants and relocate to Mexico.
In this case scenario, Chemical Corp has possession of the greater bargaining power. This is
because it is still one of the dominating companies in the market (Mishel, 1986). Even though the
company has started to face recent competition it has already secured its position in the industry
by ensuring it is one of the leading companies in that particular industry. Chemical Corp is also
owned by a multi-national company which has subsidiaries all over the world. This is a benefit to
the company as it guarantees security since it has a wide client base.
The company which has recently started to follow the union avoidance policy is planning to
close all the unionized plants and relocate. This means that the company will not suffer huge
losses in relocating, but instead, the workers will become jobless and incur losses. A worker that
is faced with being jobless at any moment cannot have possession of a greater bargaining power.
The company’s strategy is to avoid unionization and close the plants down is an internal input
which seeks to ensure that the company’s operations are not disrupted by the many strikes
conducted by the unionized workers (Adams, 1983)

EMPLOYEE AND LABOUR RELATIONS 7
Chemical Corp has been signing over twenty five different contracts with different unions. This
shows that it has separate collective agreements with the various unions. An employer who deals
with different unions usually has a higher bargaining power since the unions have different needs
thus making them divided. If one of the unions instructs their workers to go on strike, the other
workers belonging to the other unions will still go to work since their needs are not affected. The
multiple unions mean that the workers do not have one voice to represent them, unlike the
employer whose interest is the same across all it various plants spread out through the country.
Chemical Corp had previously considered establishing the wage parity and increasing the
worker’s wages, but in the recent years, it became impossible. Due to the company’s high level
of capital intensity, it considers the strikes to be extremely costly. This means that the when the
numerous strikes take place, the company incurs a lot of loss. If the unions were to agree to strike
at the same time, then the company will not have any bargaining power (Adams, 1995).
Regardless of that fact, the company can still be able to manage the strikes even if they are costly
since it has many plants in the country and has the option of closing the unionized plant and
relocate to Mexico.
The current workers in the company’s plant do not exceed six hundred employees. In the
case the union decides to call for a strike, the company has the option of hiring new workers if
they are unable to meet the union’s demands. Since only one plant will be affected, the company
will be able to hire new employees who are not unionized. The bargaining power in this setup
will not be favorable to the union since if they do not agree, the union risks its workers losing
jobs as the plant may be closed down and relocated to Mexico.

EMPLOYEE AND LABOUR RELATIONS 8
References
Statutes
The Labor Relations Code of 1988
Online Sources
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Ibrahim, M. (2018). The right to strike. Retrieved on 6th October from
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