Reference no: EM133595117

Case Study: A community Grocery store was started during the time of the great depression by combining two existing grocery stores to make sure everybody was getting their necessities during the time of great depression at an affordable price. Since then they have been in the market for a long time and have a lot of loyal customers and always maintained a good relationship with their employees by offering them timely wage increases and other employee benefits.

But recently it has been noticed that their long-time loyal customers are choosing other grocery stores because they are offering the same products at a cheaper price and it has been identified that they are doing this because they are cutting labor costs by hiring more casual employees like students, moms looking for part-time jobs only when their kids are school and other people who are not going to stay in the job for a long time. Hence, they are hired at the minimum wage and do not expect any kind of salary hike or other employee benefits. This is putting the management of the Community Grocery store at threat by losing their loyal customers and reputation in the market. The management realizes they are making a huge mistake by ignoring the supply of casual employees in the market. The Employer is concerned that Community Grocery has not evolved with the sector and has not adopted a low-cost labor model since it has not kept up with development. As a result, competitive food merchants may offer far lower pricing because their operational expenses are reduced. The Employer attributes the failure to include lower-cost casual employees in part to the Union and the rigidity of the collective bargaining agreement. The Just Cause Provision is viewed as a significant barrier to lowering worker expenses. In order to start the bargaining process, the Employer gave the Union an ultimatum: either accept some type of low-cost labor in the form of a two-tier contract or face store closings and widespread layoffs. The Union has responded with shock and horror. At first, the threat was considered a nasty bargaining tactic to scare the Union into accepting a two-tier contract; however, after further discussions, the Union is convinced that the Employer is sincere. Accordingly, the Union has agreed to some form of two-tier contract as a means to avoid devastating layoffs that would affect almost half of the bargaining unit. This does not mean that the Union is happy about the new classification of casual workers.

Bargaining issue:

Casual Classification pensions

The Union disputes the Employer's claim that there is no room in the contemporary supermarket industry for positions that are reasonably compensated and provide the standard array of benefits, including a pension plan. The Union also asserts that new hires will be interested in a long-term career with the company if the Employer offers fair wages, which include perks like a pension plan. The leadership of the Union has agreed that the current conditions of the pension plan for the Permanent Classification must be safeguarded and that the Casual Classification must have access to a pension plan of some kind.
The parties concur that discussions on the pension plan will be limited to alterations to the matching Employer funding and indicated as a percentage of yearly salary.

• a. The Union is adamant about keeping the Permanent Classification's current pension plan in place. The pension plan for the Casual Classification must be identical to or as near to identical to the Permanent Classification's as practicable (matched up to 4%).

Question: prepare the Opening position, Target position, Fallback/Trade-off position, Justification for my position, and estimation of the management team fallback position.