scene is a company meeting, between employers and
employees and the trade union (TU), who are deadlocked
in an attempt to come to an agreement over a wage
The factory operates 24
hours a day, 365 days a year. It has a total workforce
of one thousand, from production to the management.
All workers are members of the trade union.
The company is currently
experiencing financial and economic difficulties,
but it is not actually facing bankruptcy. Profits
have remained high but they declined last year as
the sector as a whole is facing a downturn. Over the
past three years wages have fallen by 3% in real terms
and staff numbers have declined by 10%.
The workers are demanding
a wage rise in line with rises in other sectors of
Management has indicated
that staff reductions will be necessary in order to
pay for any wage rise. Their proposal is:
- a 4% wage rise in ordinary wage rates over 12
months on individuals contracts (inflation is currently
2% per annum).
- Payment on the basis of hours worked annually,
rather than daily or weekly hours and the abolition
of overtime working.
- Staff cuts (10% of staff - mainly part-time,
temporary positions and apprenticeships - following
the rule ' last in, first out') and voluntary redundancies.
The management proposal
was rejected by the general assembly of workers who
were concerned that the proposals would leave them
far worse off (at the moment 40% of employees receive
a significant part of their pay in overtime payments).
The TU and the employees made a counter-proposal to
- Increase of 9% in wages over two years
- Overtime and bonuses be kept in place
- Current staff numbers be retained and any employee
who is forced into redundancy be retrained at the
- If demands are not met, strike action will be
The counter-proposal was
refused by the management, who claimed that the TU
and employees' suggestions would not solve the problems
that the company is facing.
The negotiations have
been going on for two months now.
It is company policy that
when agreement can not be reached within a two-month
period, then a special meeting should be called involving
all parties concerned. It is this meeting that is
the basis of the simulation. Both sides are required
to come with a new proposal that is a realistic basis
for coming to a mutually satisfactory agreement.
There should be a total
of seven people around the negotiating table: two
management representatives, one chair of the meeting
(appointed by the employers) and four TU representatives.
Because it is a special general meeting, all employees
are welcome to attend.
Collective bargaining: This is a process of negotiation in which employers
and employees' representatives collectively seek to
agree and resolve issues, such as salaries and work
Lock-outs: A lock-out
is one of an employer's most radical means of exerting
power. The employer refuses to allow the employees
entry to their place of work, that is s/he literally
locks them out in an attempt to compel them to accept
are made redundant when they are dismissed because
the employer decides to close down the business. The
employees may be entitled to redundancy payments as
Severance pay: If
a permanent employee is unfairly dismissed or is dismissed
on the basis of the company being re-structured, then
s/he is entitled to receive compensation, which is
called severance pay. The value of the severance pay
is often based on the salary that the employee was
receiving, for example, one week's salary for every
year of work.
Strike: The right
to strike is a basic, social, human right which is
seen as a necessary element for successful collective
bargaining and as a tool to mitigate the inherent
inequality in the employer - employee relationship.
A strike is the refusal to work, or the obstruction
of work, by employees. Workers can not just go on
strike when they feel like it! Certain conditions
have to be met which are usually laid down in legislation
and differ from country to country.
Trade Union: A
trade union is an association that exists to defend
workers' interests, including pay and working conditions.
The trade union generally represents workers in negotiations
with the employers. In many countries TUs are organised