CAC MOCK ARBITRATION 6
CAC MOCK ARBITRATIONDemographic informationTheCAC Company has 42 employees located in the office-2, the field-10and the warehouse 30. The office workers are paid a range of $10.5 to$ 20 per hour while the field staff is paid in a range of $7.50 to$25 per hour. The warehouse employees are remunerated at a range of $10.28 to $ 31 per hour (The CAC Mock Arbitration). The Current Total Cost OfLabor Including Benefits Paid Time Off And Wages.Asper the current employment contract, the total hourly cost of laborin the office is $30.5 while that of the field is $135 and thewarehouse $557.11. The daily costs for the office are $ 244, thefield- $1,215 and the Warehouse- $5,571. The various types ofemployees work for varying number of days in a week: the office worksfor five days while the field and the warehouse work for six days.Consequently, the total weekly cost of office labor is $ 1,220 thatof the field is $ 7,290 while that of the warehouse amounts to $33,426.60. The overall cost of labor in one week amounts to $ 41,936(The CAC Mock Arbitration). Summary Of The CurrentContract TermsUndercurrent contract the 1-week vacation after one year of servicesresults in a net contribution of $2, 144,759.34 while that of 2-weekvacation after seven years of service results to $ 2,174,714.05. Thealternative of 3 weeks’ vacation after 12 years of service leads toa net contribution of 2,176, 211 (The CAC Mock Arbitration).Underthe current 90-day trial, the total cost incurred by the office is $5,294.8, the field-$31,638.6 while that of the warehouse amounts to145,071.44. The overall total cost of labor is $182,004.84.Additional costs to the company include the cost of one paid sick dayafter every six months that amounts to $ 14,620.20 per year. Otherexpenses include the benefits provided to the staff under the HMO andDMO options. Besides, the company shall incur additional costs bypaying 55% of the benefits costs to the employees and by providingfull coverage for the families of the staff (The CAC MockArbitration).Detailed Overview Of TotalCost Of The New Contract If All Labor Demands Were Satisfied ThroughArbitrationInthe situation where all the requirements for the employees are met,the work schedule of the warehouse employees changes from 10 to 9hours per day. The resultant decrease in the number of hours lowersthe total daily wage of warehousing from $ 5,571.10 to $ 5,013.99.The total weekly cost of storage reduces from $33, 426.6 to $30,083.94. Besides, the work schedule for office staff changes from8.30 a.m. to 4.30 p.m. The office staff demands to be paid for theone hour they spend during lunch hours and their total time increasesfrom 8 to 9 hours per day. The changes cause the daily wages foroffice staff to increase from $ 244 to $274.50. Besides, the totalweekly cost increases from $1220 to $ 1,372.50 (The CAC MockArbitration). Theeffect of the accrued vacation time indicates that the one-weekvacation after one week of service results to zero net contributionto the company. In contrast, the two weeks’ vacation after twoyears of service leads to a net contribution of $ 1,940,179.56 to theenterprise. The three weeks’ vacation after five years of serviceresults to $ 1,955,354.13. Finally, the four weeks’ leave afterseven years of service amounts to $ 1,956,438.03. The changes to thesick time policy required the employees to have a one paid sick dayper month the single offer will result to $ 6,368. 49 per month.Besides, the need to allow 5 hours for personal time off to runerrands will lead to $ 3,613.05 per month (The CAC Mock Arbitration)..Additional costs as per the demand of the staff include an increaseof employee benefits from 55% to 70% of costs. However, the overallcost incurred on the employees is expected to reduce due to thereduction of benefits to staff families from 100% to 50%. The changein the cafeteria plan calls for employees to select their HMO’s andPPO medical options that shall further dig deep into the company’sfinances. The staff demands on tuition fees require the company toreimburse employees who are attending school provided they takeclasses related to the business. The need to refund full charges forstudents that score an A and 75% for those that score a B is furtherexpected to incur additional costs to the company (The CAC MockArbitration).A Detailed Overview Of TheTotal Costs If The Company Is Successful In ArbitrationUnderthe company’s proposed vacation policy, the one week after one yearof service is expected to cost the company$ 41,936.60 of workerstime. The net employee contribution under the option is 306,394.19. The total cost of 2 weeks’ vacation after 3 years of service isexpected to cost $ 83, 873.20 of employee time and a net employeecontribution of $ 925,173.52. The policy to provide three weeks’vacation after seven years of service is expected to cost the company$ 125, 809.80 and a net employee contribution of $ 2,168,723.11 perannum (The CAC Mock Arbitration). The above analysis depictsthat the 3 weeks’ vacation after seven years works best for thecompany. It is imperative for employees to utilize all their vacationtime in the relative calendar year to avoid confusion in counting thenumber of vacation days carried forward from one year to the other.Additional costs may emanate from the proposed tuition reimbursementplan. However, the CAC Company turned down the need to increase theHMO plan. Instead, the organization will provide for 55% cover to theemployees and100 % for the staff families. The company also turneddown the proposal to improve the cafeteria benefits and consequently,employees will have no right to choose their HMO or PPO medicaloptions. The management also rejected the proposal to provide avision plan for employees and the request to change the workingschedules.Areas Of Potential Trouble InFuture NegotiationsProblemsin the future can emanate from the provision to provide one sick dayfor every two months. It implies that the employees will have sixsick days per year and cost the company $ 33,426.60. Similar to thevacation days, the employees are required to utilize their sick daysand avoid the need to carry over unused days from one year to theother. The employee’s efforts to use all the sick days provide roomfor trouble, as they may be unwilling to reschedule their sick daysin emergencies and hamper productivity. The one-hour time off policyimplies that each employee has 12 hours per year. The policy is boundto cost the company $8,671.32. The company expects to face moretrouble in providing the most life insurance policy promised to theemployees under the arbitration schedule (The CAC Mock Arbitration).
TheCAC Mock Arbitration. Excel workings.