HRM 4122 - Developing a Management Strategy for Union Negotiations

This project presents a comprehensive management strategy for union negotiations, focusing on a case study of Volvo Trucks Canada. It begins with an introduction to labor laws and the importance of wage and compensation strategies. The project outlines the composition of the management negotiating team, defines management objectives (including cost reduction and employee needs), and assesses associated costs. It then analyzes the union's campaign and strategy, including demands, financial strength, and potential problems. The project further explores bargaining position analysis, including strike/lockout plans and dispute resolution opportunities. It includes a draft bargaining notice and schedule. The assignment addresses key aspects of collective bargaining, labor relations, and negotiation tactics, emphasizing the importance of understanding both management and union perspectives to achieve mutually beneficial outcomes. The project includes an analysis of the current labor relations environment, potential grievances, and financial considerations for both the company and the union, providing a detailed framework for effective negotiation strategies.

Running Head: Management Strategy For Union Negotiations 0
MANAGEMENT STRATEGY FOR UNION NEGOTIATIONS

Management Strategy for Union Negotiations 1
Table of Contents
Introduction........................................................................................................................2
1. Management strategy document...................................................................................2
2. Union campaign and strategy........................................................................................5
3. Bargaining Position Analysis.........................................................................................7
4. Negotiation Development............................................................................................10
Conclusion.......................................................................................................................11
References.......................................................................................................................13

Management Strategy for Union Negotiations 2
Introduction
This study is mainly based on labor laws to minimize the cost of Canadian companies which will
help to regulate the needs of employees. A tractor manufacturing company named Volvo Trucks
Canada has been chosen to create a bargaining proposal. A management strategy illustrates
the significance of wages, compensation along with market demands for increasing the
productivity of the company. In this paper, the management strategy and Union campaign
strategy depicts the objectives of the management team and evaluates the financial strength
and demands of the union. In addition, the risks and opportunities associated with the company
can be found by evaluating the bargaining history. Bargaining position analysis is being done to
identify the outcome of lockout or strike in an organization. Action plan has been constructed in
the proposal to distribute and define the roles and responsibilities of each committee member.
Various strategies are used to develop the negotiation process within the company.
1. Management strategy document
a. Composition of Management Negotiating Team
As an HR leader of Volvo Trucks Canada, it can be observed that only zero wage increased in
one year, and directors planned to eliminate the retirement benefits which might affect the
profitability of the company. The negotiating team consists of 50 members and the whole HR
department, Finance department along with the operational department will be represented. The
HR department handles and prepares employees for the wages and benefit proposals. The
finance department helps the negotiating team to understand the risks associated with the
agreement. All the departments have the power to approve the negotiation points because they
control and regulate the finance and operation of the company. The Labor law of Canada
depicts that the employees should be treated equally and it ensures whether the employees are
valued within the organization (labour.gov.on. ca, 2020).

Management Strategy for Union Negotiations 3
b. Management’s objectives
● From the given mandate, it can be stated that there are some risks associated with the
Volvo Trucks Canada due to lack of leadership. The main motive of the company is to
reduce the cost but to maintain the needs of their employees. The main risks are based
on the removal of retiree benefits, which might affect the finance of the company. The
company can gain more stability if they make changes in the compensation rate i.e. the
company should provide compensation which is 1.2 times higher than the average cost.
This will be beneficial for the Volvo Truck Canada as it helps to gain more profitability by
reducing the wage percentage (volvogroup.com, 2020). The relationship of the union
has been strained ad the rate of grievance has increased on a large scale.
● Based on the given scenario, Existing policies which are present in the tractor
manufacturing company are retirement policies to help the ex-employees. However,
Practices such as increasing the compensation of employees and offering vacation
entitlements exist. Items of interest are to minimize the manufacturing cost of the
products by not affecting the employees. Employees demand high increment and the
company need more production which is only possible by establishing a win-win strategy
and it is based on the labor law.
● (i) The company can offer compensation to all the 50 employees who are doing
overtime; for which an approximate wage should be 1.2 times higher than the average. It
will provide benefits to both the company and will satisfy the needs of the employees.
(ii) The internal demographics of the company show that maximum employees fall in the
age group 30-55 and they are associated with the company for more than 20 years and
5 employees are close to retirement.
c. Costing
● Cost of each item

Management Strategy for Union Negotiations 4
Resources Cost (Approximate)
Salary of employees $25000
Training cost $1000
Retirement plan policies $300
Total cost $ 28100
Table 1: Cost of each item
(Source: Created by author)
● The total average cost per employee
Based on the above table, it can be observed that there are overall 50 employees in the
manufacturing plant. The total cost of the items is $28,100. The total average cost per employee
will be $ 562.
● Estimate the Cost or saving
The cost or savings of the proposed changes will be the cost before changes - the cost after
proposing the changes. Original salary= $ 25000/1.2*1.3= $ 27083 approx. Original cost=$
27083+$1000+$ 300= $ 28383.
Therefore, the savings gained is $ 28383-$ 28100= $ 283.
● Organization information
The Volvo truck manufacturing Company has launched medium-duty trucks and signed an
agreement with the Carlsberg group to deliver 20 electric trucks (volvotrucks.ca, 2020). The
company promised to enhance its sales by increasing organic growth through its sustainability
programs.

Management Strategy for Union Negotiations 5
2. Union campaign and strategy
a. Determining the union bargaining committee
● Size of team
Based on the scenario, the size of the team would be large as it comprises union
representatives along with the employees of the manufacturing plant. In order to resolve the
consequences based on cost-saving, the 5 finance department representative would involve.
● Union members
All the employees of the Volvo truck Canada Company and Canadian labor union committees
would be represented.
● The interest of each group
The interest of each group is to stabilize the situation and minimize the high-cost in the
manufacturing sector.
b. Union demands and objectives
Based on a given scenario, it can be stated that the main demands of the union are associated
with the removal of the retiree benefits from the organization. The main objective of the Union is
to minimize the financial impact of the Volvo truck company due to the retiree benefits plan. As it
has been observed that the board of directors wants to eliminate the retiree benefits from the
agreement; which might affect the retired employees (Andreeva & Dimitrova, 2019).
c. The opinion of how the union will negotiate based on the initial executive proposal
Based on the initial executive proposal it can be stated that the union can negotiate by
establishing a bargaining agreement with the employers and the company itself (Strunk &
Marianno, 2019).
d. Examining the financial strength of the union

Management Strategy for Union Negotiations 6
In case there is a strike or lockout situation the company can easily run its operations and pay
salaries to the employees; because they have collected enough money in the past 9 years and
this is the financial strength of the union.
e. Problems that may exist within the union
The problems that may exist within the union are as follows:
● Political issues
● Lack of effective resources
● Different designation of the employees
● Labour laws
● Wages issues
● Management and financial issues
f. Bargaining history with other locals
The Volvo truck Canada Company has gained huge profit compared to the other local
communities and its net asset is considered as goodwill. The main motive of this manufacturing
plant is to drive prosperity with the help of advanced solutions based on transport
(volvogroup.com, 2020).
g. Common grievance issues that may have arisen from the current collective agreement
Based on the case scenario, it has been observed that the last round of negotiation process has
increased in the grievance rate. The main issues of grievance are concerned with wages and
the working hours of the employees. The labor law depicts that high discrimination and health
and safety are two crucial grievances which might result in high consequences if not regulated
properly (labour.gov.on. ca, 2020).
h. Reviewing and summarizing grievance processes and arbitration awards
The grievance process is the step by step procedure which is used by an employee to register
his or her complaint. In addition, it is a type of formal communication within the employer and

Management Strategy for Union Negotiations 7
employee to resolve the issues. Arbitration awards help to establish a quality strategy for the
welfare of employees such as increasing their salary which will motivate the employees. As
commented by Wolenski, Thompson & Geer (2019), arbitration awards will help to gain more
productivity and profitability in the tractor manufacturing plant.
3. Bargaining Position Analysis
3.a. A Strike or Lockout Plan
A commercial strike refers to an occupational hazard created by working employees to
cessation at work, slow down production process and other opposing activities to minimize
organizational outputs and manufacturing process. Strikeout mainly occurs due to unusual
failure in the collective bargaining agreement between employer and unions to incorporate
desirable economic stand. Collective workplace strike creates several challenges for Volvo
Trucks to maintain manufacturing process, transportation services and outsourcing products
within the real-time frame (Fudge 2017). Slow production, revenue losses, overhead inventory
cost and time delay in deliverables are the common limitations for Volvo authority during
organizational strikes.
An action plan for Volvo Trucks regarding common bargaining agreement refers to a systematic
empirical framework of activities that can be implemented to resolve occupational hazards and
miscommunications regarding economic stands and reformations in the organizational structure.
The prime obstructions and obstacles for Volvo Trucks are disagreements regarding wage
criteria, holiday allocation and retiree benefits. The financial executives and board of directors
(BoD) needs to reinforce organizational employment policies and payment structures to satisfy
the union's position. Several legal solutions such as bargaining agreement, conciliation process
and strike vote and employment regulatory affairs including labor relation acts can be
incorporated by the board of directors to diminish employee agreement challenges and loss of
properties. Certificates of representations, negotiation criteria and dispute resolutions are

Management Strategy for Union Negotiations 8
essential to creating by the HR department to confine adequate solutions through conciliation
process or strike vote bargaining under legal arrangements while considering Canadian
employment and Labor law enforcement.
Volvo Trucks has gained significant market attractions for its outsourcing quality, cost-
effectiveness and customer-driven strategies. Strike and occasional conflicts in operation
management create limitations to sustain Volvo Trucks' core principles; the authority can
undergo distinct commercial contractual agreements to meet project requirements along with
maintaining production credits and accessibilities to mitigate revenue risks. Independent
contracts, dependent contractions can be used to reduce the scope of catastrophic events such
as revenue losses, production losses and reputation damages based on labour relation acts and
employment regulatory compliance (volvogroup.com, 2020). As Volvo currently upholds existing
collective agreement, certain legal preconditions can be made by Volvo to incorporate seamless
business development. Canadian jurisdiction and legal privilege adequately leverage Volvo to
incorporate productive and innovative approaches to mitigate project challenges.
3.b. Dispute Resolution Opportunities
Dispute resolution refers to a certain provision that allows diminishing organizational challenges
due to collective failure in bargaining and negotiation process. Specific circumstances can be
resolved utterly by providing efficient employment benefits in contract terms and conditions.
Volvo needs to consider the economic background and capabilities of the workers to redesign
payment structures aligning with various principles such as fuel efficiency, driver productivity,
safety and uptime. As per the Employment and Labor law, protected leaves, adequate wage
criteria and occupational health standards are required to provide to eliminate regulatory affairs
and constraints (Strauss & McGrath, 2017). Volvo Trucks can increase year-wise increments
and implement effective rewarding policies to cope with overhead costs to incorporate financial
stability and employee reliability. Amount of non-payment leaves, maternity and retiree schemes
can be examined effectively to reduce overhead costs due to strike and disagreements between

Management Strategy for Union Negotiations 9
various stakeholders. 1.3% yearly increment, upgraded safety policies and reward policies can
be implemented by Volvo Trucks to minimize risk magnitudes.
3.c. Draft Bargaining Notice and Schedule
To
The Employees
Volvo Trucks, Canada
Sub: Formal Notice and Schedule Regarding Employment Terms and Wage System
Volvo Trucks has decided to impose newly renovated wage structure and employment
regulatory terms to incorporate efficient growth and development within the organizational
context. The company is willing to provide 5years agreement along with 1% increment from the
second year of employment terms. No occupational retiree benefits and concessions will be
provided by Volvo Trucks. The prime needs of reformation have been checked while focusing
on significant market instability and financial uncertainties within the Canadian transportation
industry.
Sincerely,
HRM Team
3. d. Formal Notice to the Union
To,
The Labor Union
Volvo Trucks, Canada
Subject: Organizational Reformation in Employment Terms and Salary Structure
It has been notified that the Volvo Trucks has taken various major changes in payment
attributes and employment terms to sustain productivity growth in business and Management.
The organization has decided to hike 1% on base payment contract from the second year term
without any occupational and retirement concessions. However, the company is willing to sign
common contracts and bargaining agreements to facilitate employees within employment terms

Management Strategy for Union Negotiations 10
with the legally certified labor union under the jurisdiction of the Employment and Labor Act of
Canada.
Sincerely,
HRM Team
Volvo Trucks, Canada
4. Negotiation Development
4.a. Proposal For The Board of Directors
As the current transportation industry within Canada is going through several uncertainties and
limitations, Volvo Truck needs to develop market-focused strategies to increase potentiality and
accountability within employment procedures. Several items are essential for the increment of
wage, holiday facilities and retirement planning to incorporate employee satisfaction and loyalty
components. Creation of a collective bargaining platform is essential to use fair bargaining
power to make decisions regarding wage, holiday and retiree schemes. Effective and legal
negotiation can be made by imposing employment and labor act jurisdiction and formation of a
conciliation committee under the supervision of the Ministry of labour (Ebisui et al. 2016).
Decreasing demands of products and irregular market trends have forced the organization to
take such decisions. Economic background of employees and stakeholders are also considered
to confine sufficient growth in the increment (1%) and occupational health policies. However,
rewarding schemes, retiree benefits and holiday facilities have been reduced to sustain the
financial strength and durability of the organization.
4. b. Proposal for the Union
Employee bargain regarding wage hike, holiday facilities and retirement planning can be
resolved through a systematic empirical framework of the agreement between key stakeholders
and the union. As the union is responsible to deliver economic and workplace benefit for
employees, the union needs to be heard sincerely to diminish employee-employer relationships.

Management Strategy for Union Negotiations 11
The common commercial negotiation process is required to implement with the interference of
employment regulatory affairs of Canada to minimize challenges during the collective bargaining
agreement process. Fundamental issues such as wage hike, mandatory holiday facilities and
health benefits are required to include within contract documents to reduce the scope of
disagreements and striking resemblance between the union and Volvo Trucks. To satisfy overall
requirements, a 1.3% increment can be made in a new agreement to acquire successful
business administration (Bogg, 2017). Various mandatory holidays such as maternity, medical
leave and pay leaves are required to consider by newly renovated payment structure as per
standardise scales mentioned in employment and labour Acts.
4. c. Proposal for Upgraded Cost Efficiency
The Volvo Truck authority and the union can be agreed upon taken decisions by a systematic
empirical framework of collective bargaining agreement which includes that 1.3% salary hike will
be provided to the employees from the second year of employment terms. Based on the current
changes, the company needs to provide $27083 per employee to enhance financial strengths.
Original salary= $ 25000/1.2*1.3= $ 27083 approx. Original cost=$ 27083+$1000+$ 300= $
28383.
Therefore, the savings gained by the Volvo Trucks is $ 28383-$ 28100= $ 283.
Conclusion
Regulation and accessible implementation of Employment and Labor Acts is an inevitable
component of modernizing commercial sectors to ensure systematic growth and advancement
in business administration. Effective implementation of the legal framework allows determining
the effectiveness of bargaining agreement between stakeholders and union along with
incredible transparency and equality within employment opportunities within Volvo. Commercial
Strikes can inevitably affect collective growth and profit margin aspects due to the immensely
powerful obstructions of employees and refusal stand against newly renovated employment