After months of intensive negotiations, the Christian Labour Association of Canada (CLAC) and a Calgary grocery distribution warehouse achieved an innovative settlement that both sides are enthusiastic about. The union entered negotiations seeking modest wage and benefit improvements for its 150 members. The company sought a wage reduction and benefit cap in order to remain competitive and hold onto its contract with its current client, Overwaitea Foods. Both positions posed difficulties for the other side, and yet a “down the middle” compromise would be inadequate for both.
It became clear that another solution would have to be found. During negotiations, the discussion began to shift from how to do things cheaper to how to do them smarter. This was narrowed down to two central questions: How can the workplace be organized to allow for more direct employee input? Can incentives be effectively implemented to reward improved productivity?
The parties quickly agreed that the warehouse could be run better and more efficiently. As the discussion progressed, the parties agreed to establish “work teams,” divided by job functions and shifts. These teams will work together with a supervisor whose role will change from that of enforcer of rules to team facilitator. The teams were given responsibility for deciding shift times, work assignments, vacation schedules, and evaluating the viability of proposed capital projects.
The parties also agreed to allow individual employees considerable flexibility in accumulated overtime and using their overtime “bank” for time off, extended vacations, or simply extra cash in the form of payouts. In addition, the company agreed to share with the employees 50 per cent of any cost savings realized on a cost per unit basis, up to $1,500 per employee per year.
The key to this agreement is that the financial incentive has been coupled to a change in the structure of the workplace, allowing employees greater input in the decision-making process. Implementing an incentive plan will not work unless employees are allowed to make effective decisions concerning their work. Employees must be given a chance to exercise responsibility.
The challenge now will be to change some of the established attitudes on the shopfloor to make the written agreement work. If the initial enthusiasm is any indication, it does look promising. The members of the union’s bargaining committee are excited about the agreement, particularly about changing some of the attitudes about their work and their company. The first step has been taken in fundamentally changing their workplace in a very positive way. Hard work, good communication, and ongoing commitment will be needed to make it successful in the long run. If this occurs, it could be a model for other unions and companies in the warehousing business.