Reference no: EM133043196

The Management of the Plant and all Company operations shall be vested exclusively in the Company, including the direction of the work forces; the right to modernize and install new equipment and to rearrange production schedules; the right to hire; the right to suspend or discharge employees for just cause; the right to relieve employees from duty because of lack of work or for other reasonable causes; all subject to the provisions of this agreement. All employee job descriptions will be evaluated against standards of the industry to include, but not exclusive, the "Job Competencies Analysis System" agreement.

When a new job classification is established, the Company will develop a Job Description, Labor Grade, and Rate. These will be explained to the JLRC. The rate will then be installed. When a wage rate for a new job classification is installed, the employee or employees affected may object to the rate, and at any time within ninety (90) days from receipt of the Labor Grade and rate, file a grievance, and such grievance shall be processed under the grievance procedure of this Agreement. If such grievance is settled at any step of the grievance procedure, the decision shall be effective as of the date when the employee or employees were assigned to the new job classification.

The Company has the right pursuant to the Management Rights Clause to discontinue job classifications and establish new job classifications. The job classifications eliminated were not "core jobs" in that the Company was not in the business of truck driving, yard maintenance or janitorial work. The Company also had legitimate business reasons for discontinuing these job classifications and contracting out these duties. First, trash dumped on Company premises caused sanitation problems. Second, by eliminating the trash dump the Company could use that area for wet feed.

Third, the Company no longer was required to pay landfill fees or purchase a new trash truck. The Company estimated it had an immediate savings of $60,000 to $90,000. The Company did not negotiate the discontinuance of these job classifications as there was nothing in the CBA requiring them to do so. There had been five previous instances wherein the Company discontinued job classifications and established new job classifications and the Union did not grieve any of those Company actions. As a result of the Company's actions in this dispute, the five employees whose job classifications were eliminated were not laid off nor did they lose employment.

As to the subcontracting, the Company pointed out that there is no contractual provision preventing the Company from subcontracting work. And that the Company had been contracting out work for a number of years without any protest or grievance filed by the Union. Under the Management Rights Clause, the Company had legitimate business purposes to contract out certain work that was not core work of the Company's business. The Union's position is that the Company violated the CBA by unilaterally eliminating three job classifications and establishing one new job classification and subcontracting out the work without negotiating with the Union.

This is a contract interpretation case, and it is the Arbitrator's duty to determine the mutual intent of the parties as expressed in the language of the CBA. If the disputed CBA language is clear and unambiguous, the Arbitrator will give such language its plain meaning. However, if the disputed CBA language is reasonably susceptible to more than one meaning, the language may be considered ambiguous and the Arbitrator may rely on other interpretative aids such as bargaining history or past practice of the parties.

The Union contends that the phrase "the right to relieve employees from duty because of lack of work or for other reasonable causes" in the Management Rights Clause is susceptible to more than one meaning. First, there was no lack of work, the Company still needed the services performed by the bargaining unit employees, as demonstrated by the fact that the Company contracted out the work. So, that leaves the issue of what is "reasonable causes"? The only reasons cited by the Company to support their action was to save money. But the Management Rights Clause speaks to specific operational and not financial decisions.

Furthermore, because the CBA specifically provides for the creation of new job classifications, but says nothing about eliminating job classifications, the Union argued that eliminating job classifications was not contemplated by the "relieve employees from duty" language. As to subcontracting, if the Management Rights Clause is interpreted to allow for subcontracting out bargaining unit work, then there would be nothing to prevent the Company from dismissing all of its employees and contracting for all of the plant's work. That was certainly NOT the intent of the Union when it agreed to the very specific Management Rights Clause in the CBA.

Assume you are the new HR Manager for this company and the Plant Manager asked you to draw up a plan to avoid this type of dispute/situation from happening again. Please develop a comprehensive approach/plan which you will submit to the plant manager to prevent this situation from happening again.