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Bargaining Power Assignment
Part A
There are many factors that can influence the outcome of distributive bargaining where the bargaining power of management and the union are concerned. The party with greater bargaining power will have the ability to acquire more positive results. The factors that affect bargaining power are external economic, social and legal factors and internal workplace and organizational factors. The following are examples of the factors and how they affect management and unions.
Management Bargaining Power
• Macroeconomic Environment - Currently the employer is experiencing a time of economic downturn, which will have a significant impact on both sides of the bargaining table. During a time of economic growth where companies see bigger profits, the union is in a stronger bargaining position and would seek higher wage increases to maintain a real standard of living, while the employer will comply as to not want any workplace interruptions. In this case, with the rise in value of the Canadian dollar, the attendance of US patrons has declined, having an effect on total revenue. The inflation rate is predicted to only rise between 1-2% the following year, making the demand for significant wage increases impractical. With the unemployment rate still fairly high at 7.8% in Ontario, it is unlikely the union would wish to go on strike for risk of job loss. The employer is currently in a stronger bargaining position, as focus will be made on budgetary cuts, therefore looking for wage freezes and concessions from the union. The union’s main concern will be with job security.

• Inventory Levels – This is a service type industry where there is an inability to stockpile a product for sale on a later date. This is an immediate demand type service; therefore the company is in a weaker bargaining position in the case the union is to strike. However, the ability to continue operations to some degree may be attained through the use of management and replacement workers. This may be enough to get Diamond Casino by, but may not be enough to keep the business running in the case of a long drawn out strike.

• Interdependence of bargaining unit – Diamond Casino is a service type business where there is no dependency on the output of that particular bargaining unit to other units within the company. Therefore there is no negative impact on the company in the case of a strike. The bargaining unit is replaceable with replacement workers and members of management; placing the employer is in a stronger position.

• Competitive position of the employer – Currently there is a decline in attendance due to economic factors, competition in the United States and lack of interest. For those remaining customers who still frequent Diamond Casino, a strike may create a temporary decline in the customers who are in support of family members/friends on strike, but will likely return once the strike is over as there is little competition within the city limits. Also, due to the current economic conditions (i.e. unemployment rate), it is felt that the employees will have a more difficult time find alternate employment, therefore will likely return to Diamond Casino at a strikes end. From the above reasoning, it is clear that the employer is in a stronger bargaining position.

• Time of negotiations – If a company is of seasonal nature and during their peak time, a strike is to occur, this will hurt their business and place them in a weaker bargaining position. However, the casino never closes as it operates 24/7, 365 days a year. As the holiday season approaches, attendance may increase somewhat, but not significantly enough to impact the company. Management is in a stronger bargaining position than the union.

• Ability to continue operations – The three factors that determine the ability to use replacement workers is legislation, size of company and technology used. In some provinces (British Colombia and Quebec), the use of replacement workers is prohibited by legislation. Where replacement workers are permitted, the size of the company would determine if it is realistic to replace all of the workers to successfully continue operations. If the company is too large for replacement workers, supervisors may be able to keep operations going through the use of technology. In Ontario, legislation allows for replacement workers to be used in the case of a strike. The size of the company having 400 employees is pretty high, but Diamond Casino will utilize replacement workers and members of management to keep operations running. This will place the union in a weaker bargaining position.

• Bargaining Structure – The Ontario Lottery Corporation has ownership of several casinos in Ontario. Each casino has a separate collective agreement; therefore they are each negotiated separately, putting them in a stronger bargaining position.

• Public Opinion – The effect a strike would have on the public is minimal due to the fact that it is part of the entertainment industry and not an essential service. The public would take an impartial stance with some family members and friends supporting the employees, but the employer will not feel public pressure to change their standpoint. The employer would have the stronger position bargaining position in this situation.

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