Reference no: EM133255129

1. For the example below, explain: (1) who the parties involved are, (2) the interest of each party, and (3) how the Tesco Management could have minimized the damage to ER resulting from poorly managed contract change - give advice to manage contract change well.

Following negotiations that had been ongoing since the preceding summer, in February 2010, the management of a Tesco distribution plant based in Chepstow South Wales, was disappointed when the workforce rejected a relocation plan whereby they would move to a new distribution plant, built 9 miles away from Chepstow, on the other side of the Severn Bridge, at Pilning. The 750 employees were unhappy with the proposed move: to get to work, they would have to pay the toll charge to cross the bridge, and the new terms and conditions were not as favorable, as the average salary would drop from 21,000 GBP to 18,000GBP and the pension would be decreased, while their union Unite would no longer be recognized as their representative body. Following negotiations, the company had agreed that nobody transferring from Chepstow to Pilning would actually face a pay cut, but instead their salaries would be frozen until the rate paid to newly recruited employees caught up with their pay. Those staff not accepting the new terms and conditions would be made redundant.

Ron Web, the national secretary for Unite, said: "What Tesco is hiding behind this move is that it wants to keep the workers, but only if they agree to vastly inferior contracts. Athe same time they want to deny workers the chance to be represented by their lawful union. At time like this, when workers are frightened for their jobs, this is an underhand way to get them to agree to pay cuts."

In contrast, the operation director at Pilning Nigel Jones said: "Our new distribution center at Pilning will not only represent a long-term investment within the area, but also is good news for local job-seekers, particularly in the current climate."