Proposals – Management Case II November 15, 2018 Objectives: Each student will individually prepare for and participate in a simulated labor relations negotiation. Based on a provided scenario above/below. Each student will research, select, justify and prioritized negotiations proposals. Each student will draft, a written proposal and provide legitimate justifications to support the proposal. • Issue Selection o Written Proposals o Proposal Justification ▪ Negotiation Management ▪ Achievement of Objectives Proposals – Management Agreement Between General Manufacturing & Fabrication Company Central City, Indiana, And Local 384, United Steelworkers of America AFL – CIO Effective: March 1, 2012 Proposals – Management Issue Selection: Acting as a member of a management bargaining team in formulating strategies and tactics for negotiations. Following a more detailed approach to contract costing and instructions, the exercise presents a copy of the expiring contract between General Materials & Fabrication Company (GMFC) and Local 384 of the United Steelworkers of America. Following are the demands of management and supplemental information that will help in choosing contract demands. Written Proposals – Management A - J Proposal A – Proposal B Proposal C Proposal D Proposal E Proposal F Proposal G Proposal H Proposal I Proposals – Management Proposal J Justifications for proposals A through J from management: Justification for proposal A – Justification for proposal B – Justification for proposal C – Justification for proposal D – Justification for proposal E – Justification for proposal F – Justification for proposal G – Justification for proposal H – Justification for proposal I – Justification for proposal J – Proposals – Management Acting as a member of a management bargaining team in formulating strategies and tactics for negotiations. Acting as a member of a management bargaining team in formulating strategies and tactics for negotiations. Following a more detailed approach to contract costing and instructions, the exercise presents a copy of the expiring contract between General Materials & Fabrication Company (GMFC) and Local 384 of the United Steelworkers of America. Following are the demands of both labor and management and supplemental information that will help in choosing contract demands. The union may formulate its demands from the following set, including all items from a through d and choosing any three from e through j: 1. A general wage increase of 5 percent of base wages per hour as of March 1 of each year during each year of the contract. If the contract length exceeds two years, wage negotiations may be reopened before the beginning of the third year and every second following year thereafter. 2. The company will neither subcontract work the bargaining unit is capable of performing nor close the plant or move any of the plant's operations during the life of the agreement. 3. The company will train bargaining-unit members to operate and maintain computer technology used in the production process, and all production technician jobs will be included in the bargaining unit. 4. Implementation of a cost-of-living adjustment (COLA) of 7 cents per hour for each 1-point increase in the consumer price index. COLA payments will be calculated based on revised U.S. Department of Labor Bureau of Labor Statistics data for urban workers and paid at the first pay day in the third month of each succeeding quarter. 5. The company will implement a prescription drug benefit that will pay the full cost of generic drug prescriptions and 80 percent of proprietary drug prescriptions. Proposals – Management 6. The first Tuesday after the first Monday in November will be a paid holiday in evennumbered years in order to permit employees to more conveniently exercise their rights to vote in federal elections. 7. Vacation accumulation will be increased by 0.02 hour per straight-time hour worked for employees with 20 or more years of service. 8. The company's 401(k) match will be increased from up to 3 percent to up to 5 percent of gross pay for employees contributing to the plan and will contribute 2 percent to the account of all other employees, including those who do not make individual contributions. 9. All benefits available to employee spouses shall be extended to domestic partners of employees. 10. Mandatory overtime cannot exceed 10 hours in any given week. The company's offers and demands will be formulated from the following list. All demands between a and d will be included in the offer, and any three demands between e and j may be included: 1. The length of the agreement shall be six years. 2. Wage increases of a 2 percent lump sum when the contract is ratified, a 2 percent lump sum on March 1 of the second year, a 2.5 percent lump sum on March 1 of the third year, a 2 percent base wage increase on March 1 of the fourth year, and a 2.5 percent base wage increase on March 1 of the fifth and sixth years. 3. The annual increase in the employer's contribution to the employee health care benefit will be limited to the percentage wage increase negotiated. 4. The supplementary unemployment benefit will be discontinued. 5. Persons promoted to supervisory positions will continue to accrue seniority within the bargaining unit after their promotion and retain 6. bumping rights back into the bargaining unit if an economic reduction in force among supervisors is implemented. 7. Employees may not refuse Saturday overtime and/or up to two hours of overtime per day, including Saturday. 8. All employees will be automatically enrolled in the 401(k) retirement plan. 9. If the health insurance plan is expected to incur a "luxury tax" as defined by the PPACA, the employer contribution for family coverage will be reduced by as much as necessary to avoid the tax. Proposals – Management 10. The losing party in arbitration shall be responsible for paying the arbitrator's fee for hearing the case and rendering an award. 11. A wellness program that will include counseling and prevention programs to address highrisk behaviors such as poor dietary habits, smoking, and lack of exercise that detrimentally affect health will be offered. Any employee who does not participate must pay a 25 percent surcharge on his or her required health care contributions. Each team is to construct a demand or offer package. This package is to include: 1. Identify the relative priority of the issues being included. 2. Identify issues the team would be willing to trade off. 3. For each demand, 1. Tie each demand to provisions in the present contract. 2. Identify a desired settlement position and expected settlement position, and a maximum concession position before bargaining. 3. Cost the provisions of the contract that would be changed. 4. Identify and develop strategies and tactics to be used during the negotiations. AGREEMENTbetweenGENERAL MANUFACTURING & FABRICATION COMPANYCENTRAL CITY, INDIANA,andLOCAL 384, UNITED STEELWORKERS OF AMERICAAFL-CIOEffective March 1, 2012 CONTENTSArticle 1. Purpose388Article 2. Recognition388Article 3. Checkoff of Union Dues388Article 4. Management389Article 5. Representation389Article 6. Hours389Article 7. W ages391Article 8. Seniority394Article 9. Grievance Procedure and No-Strike Agreement397Article 10. Vacations399Article 11. Leaves for Illness and Family Emergencies400Article 12. General401Article 13. Renewal407Appendix Classified Base Rates407 ARTICLE 1.PURPOSE1.01It is the intent and purpose of the parties hereto that this Agreement will promote and improve industrial and economic relations between the employees and the COMPANY, and to set forth herein a basic agreement covering rates of pay, hours of work, and other conditions of employment to be observed by the parties and to ensure the peaceful settlement of disputes and to prevent stoppages of work. ARTICLE 2.RECOGNITION2.01The COMPANY recognizes Local Union No. 384, United Steelworkers of America, AFL-CIO, as the exclusive bargaining agent for all hourly paid employees Proposals – Management designated in the bargaining unit by the National Labor Relations Board for the Central City plant and warehouses, which includes all production and maintenance employees including machine shop employees and receiving department and warehouse employees but excluding boiler room employees, clerical employees, watchpersons, guards, assistant supervisors, supervisors, and any other supervisory employees with authority to hire, promote, discharge, discipline, or otherwise effect changes in the status of employees or effectively recommend such action.2.02Any employee who is a member of the UNION on the effective date of this Agreement shall, as a condition of employment, maintain his/her membership in the UNION to the extent of paying membership dues.2.03Any employee who on the effective date of this Agreement is not a member of the UNION shall not be required to become a member of the UNION but shall be required to pay an amount equal to the UNION's regular monthly dues. Any such employee, however, who during the life of the Agreement joins the UNION must remain a member as provided in Section 2.02. ARTICLE 3.CHECKOFF OF UNION DUES3.01Upon individual authorization from members, monthly UNION DUES in an amount to be determined by the UNION shall be deducted by the COMPANY from each member's first pay in each month. Such sums shall be forwarded by the COMPANY to the financial secretary of the UNION before the 15th day of the month. ARTICLE 4.MANAGEMENT4.01The UNION and its members recognize that the successful and efficient operation of the business is the responsibility of management and that management of the plant and the direction of the working force is the responsibility of the COMPANY, provided, in carrying out these management functions, the COMPANY does not violate the terms of this Agreement.4.02The COMPANY retains the sole right to discipline and discharge employees for cause, provided that in the exercise of this right it will not act wrongfully or unjustly or in violation of the terms of this Agreement. ARTICLE 5.REPRESENTATION5.01The UNION shall designate a UNION COMMITTEE of no more than 10 members who shall represent the UNION in meetings with the COMPANY, with no more than 7 employees actively working in the plant as members of the committee.5.02The COMPANY agrees that during meetings held with management members of the UNION required to attend shall be paid at their regular hourly base rate for all time lost from their regularly assigned work schedule. ARTICLE 6.HOURS6.01Work Day A day starts at the beginning of the first shift and ends at the close of the third shift. The first shift is any shift that starts after midnight. Normally the first shift starts at 7:00 a.m. or 8:00 a.m. Present shift schedules will continue unless changes are mutually agreed to by the COMPANY and the UNION.6.02Payroll Week The payroll week starts at the Proposals – Management beginning of the first shift on Monday and ends at the end of the third shift on Sunday.6.03Daily Overtime Time and one half shall be paid for all hours worked in excess of eight in any one day.6.04Saturday Work Time and one half shall be paid for work performed on Saturday between the hours of 7:00 a.m. or 8:00 a.m. Saturday to 7:00 a.m. or 8:00 a.m. on Sunday.6.05Sunday Work Double time shall be paid for work performed on Sunday between the hours of 7:00 a.m. or 8:00 a.m. Sunday to 7:00 a.m. or 8:00 a.m. Monday.6.06Consecutive Hours over 8 Time and one half shall be paid for all hours worked over 8 but less than 12. Page 390 6.07Consecutive Hours over 12 Double time shall be paid for all consecutive hours worked over 12.6.08Distribution of Overtime Overtime shall be distributed on an equitable basis within the department in a manner to be decided by the supervision and the UNION representatives in that department, giving consideration to seniority and ability to perform the work. Refused overtime hours shall be credited as overtime hours worked for purposes of distributing overtime.6.09Limits on Mandatory Overtime Employees may be required to work for no more than 12 hours during any 24hour period. Employees who have worked at least 10 hours of overtime during the current payroll week will be permitted to refuse additional overtime work during that payroll week.6.10Shift Premium 1. A shift premium of 30 cents per hour will be paid to all employees for all hours worked on a particular day if 50 percent or more of the hours worked on that day fall between the hours of 3:00 p.m. and 11:00 p.m. 2. A shift premium of 40 cents per hour will be paid to all employees for all hours worked on a particular day if 50 percent or more of the hours worked on that day fall between the hours of 11:00 p.m. and 7:00 a.m. 6.11Holidays 1. After completion of the probationary period an hourly employee not working on the holiday will be granted holiday benefit consisting of eight hours' straight-time pay at his or her regular hourly base rate on the following holidays:New Year's DayThanksgivingMemorial DayChristmasIndependence DayDecember 24Labor DayDecember 31Floating holiday 2. Double time in addition to the holiday pay, as stated in Section 6.12a, will be paid for all hours worked on the above holidays. Proposals – Management 3. The floating holiday will be designated by the COMPANY. The UNION will be notified at least 90 days prior to the day set by the COMPANY. 4. A holiday starts at the beginning of the first shift and ends at the close of the third shift. When one of these holidays falls on Sunday, the holiday shall be observed on Monday. When one of 5. these holidays falls on Saturday, the holiday shall be observed on Friday. 6. To be eligible, the employee must be at work on the day for which he or she is scheduled prior to the holiday and following the holiday unless absence is established for any of the following reasons: 7. Unavoidable absence caused by sickness or injury. 8. Emergencies in the immediate family. 9. Regularly scheduled vacation. The holiday will not count against vacation. 10. Any other justifiable absence previously approved by his or her supervisor. ARTICLE 7.WAGES7.01Skill-Based Pay Plan Effective March 1, 1997, a skill-based pay plan shall be implemented. Pay shall be based on employees' demonstrated skills. Skill blocks associated with ability to perform work in five job categories shall be defined jointly by the COMPANY and the UNION. The five categories are assembler, skilled production, skilled maintenance, material handling and production support, and maintenance. In the assembler, skilled production, and skilled maintenance categories, there are three levels in each requiring significantly increasing skill levels. In the material handling and production support and maintenance categories, there is a single level. 1. Assembly Category The skills associated with the former Assembler grades 1, 2, and 3 shall constitute those required to perform as an Assembler, level 1. All employees currently assigned to these grades shall be initially qualified as Assembler, level 1. The skills associated with the former Assembler grades 4, 5, and 6 shall constitute those required to perform as an Assembler, level 2. All employees currently assigned to these grades shall be initially qualified as Assembler, level 2. The skills associated with the former Assembler grades 7, 8, 9, and 10 shall constitute those required to perform as an Assembler, level 3. All employees currently assigned to these grades shall be initially qualified as Assembler, level 3. 2. Skilled Production Category The skills associated with the following jobs shall be associated with skilled production, level 3: tool and model maker, tool and die maker, jig grinder operator, machinist, welder, and precision grinder. The skills associated with the Proposals – Management following jobs shall be associated with skilled production, level 2: layout and setup worker, painter, profile mill operator, machinist trainee, capital assembly worker, and weldment finisher. 3. The skills associated with the following jobs shall be associated with skilled production, level 1: metal fabricator, grinder operator, milling machine operator, lathe operator, head assembly worker, developmental assembler, experimental assembler, and assembler. 4. Skilled Maintenance Category The skills associated with the following jobs shall be associated with skilled maintenance, level 3: systems control technician, measurement and control technician, instrument maintenance technician, electrician, refrigeration and air conditioning mechanic, steamfitter, development electronics technician, millwright mechanic, maintenance mechanic, and millwright. The skills associated with the following jobs shall be associated with skilled maintenance, level 2: none. The skills associated with the following jobs shall be associated with skilled maintenance, level 1: cabinet maker, locksmith, specialist, oiler, and trades helper. 5. Material Handling and Production Support The skills associated with the following jobs are associated with the material handling and production support skill set: steelroom handler, head stockroom clerk, yard worker, stock service worker, truck driver, tool crib attendant, stockroom clerk, waste hauler, and yard laborer. 6. Maintenance The skills associated with the following jobs are associated with the maintenance skill set: air conditioning cleaner and janitor. 7.02Skill Level Rates Skill level rates effective March 1, 2012 will be increased by 1.5 percent, as given in the appendix and shall be increased by 1.5 percent on March 1, 2013, and March 1, 2014.7.03Certification of Qualifications All employees shall be given skill tests each year during the month in which they were initially hired to determine their current skill levels. If employees pass the next higher level skill test, they shall be promoted to that level (not more than one level per year). If employees fail a test at their current level, level 1 employees have one year to requalify or be terminated. Level 2 or above retain their current pay rates for one year and then shall be demoted if they don't qualify on the next test. There is no fixed number of openings at any level. When employees qualify, they shall be advanced at the rate of one level per year or less. Certification tests will be developed jointly by the COMPANY and the UNION and shall be administered jointly annually on March 1 by the COMPANY and UNION. For its part, the COMPANY shall offer not less than 30 hours of skill training scheduled during normal working hours annually to employees who request it.7.04Promotional Increases When an employee is promoted to a higher level, he or she shall Proposals – Management receive the classified rate for the job the first Monday on or after his or her promotion.7.05Temporary Transfers between Departments When in the interest of effective and economical operation or as a means of deferring layoffs it is desirable to transfer employees temporarily from one department to another, such temporary transfers may be made for a maximum period of four weeks, if mutually agreeable to both the COMPANY and the UNION. Wherever possible, departmental seniority will be given due consideration in determining employees to be transferred. The UNION agrees to cooperate with the COMPANY in arranging such temporary interdepartment transfers. The COMPANY agrees not to request temporary interdepartment transfers except in the interests of efficient and economical operation or as a means of deferring layoff. 7.06Employee Reporting and No Work Available Employees reporting for work according to their regularly assigned work schedules without being notified in advance not to report and work is not available shall be allowed a minimum of four hours' pay at the employees' regular straight-time hourly base rate except in cases beyond the control of the COMPANY.7.07Call-In Pay Employees who have been recalled to work after they have completed their regularly scheduled shift and have left the plant shall be given a minimum of four hours' work if they so desire. If four hours' work is not available, the employee shall be paid the hours worked according to the wage and premium pay policy, and the remainder of the four hours not worked shall be paid at the employee's regular straight-time hourly rate.7.08Jury Duty The COMPANY agrees to pay the difference between jury duty pay and the employee's straight-time hourly base rate earnings when the employee is called for jury duty. When called, the employee shall be scheduled to work on the first shift whenever possible. The employee shall be required to report for work whenever he or she is able to work four consecutive hours or more of the first shift.7.09Effective March 1, 1982, 10 percent of profits (net income from operations before provision for income taxes) generated by the plant for the calendar year ending on December 31, 1982, and continuing thereafter on December 31 of each calendar year shall be divided among members of the bargaining unit. Each employee shall receive an amount equal to his or her hours worked divided by the total number of hours worked by the bargaining unit during the calendar year times the profit proportion (if any). Profit-sharing payments shall be made not later than March 31 of the following year for distributions earned for the preceding calendar year. ARTICLE 8. Proposals – Management SENIORITY8.01Plant Seniority Plant seniority shall be determined from the employee's earliest date of continuous employment with the COMPANY and shall apply to divisional and plant layoffs and plant recalls after layoff.8.02Departmental Seniority Departmental seniority shall be determined from the employee's earliest date of continuous employment in the department and shall apply to promotions, demotions, and reductions in force within the department.8.03Termination of Seniority Seniority shall terminate for the following reasons: 1. Voluntary resignation. 2. Discharge for proper cause. 3. Absence for three successive working days without notice, unless satisfactory reason is given. 4. Failure to report to work after layoff within five working days after being notified by registered letter (return receipt requested) at the employee's last available address, unless satisfactory reason is given. A copy of the written offer shall be sent to the UNION. 8.04Employees on Layoff 1. Employees who are or shall be laid off due to lack of work and later reemployed shall retain their seniority as of the time of the layoff but will not accumulate seniority during the layoff period. If an employee after the first six months of layoff declines to return to work when contacted by the production personnel office regarding an opening, his or her seniority rights shall be terminated. 2. Employees shall be given three working days' notice of impending layoff from the plant or three days' pay in lieu thereof. 8.05Probationary Employees 1. A new employee shall be on probation without seniority for 40 days actually worked after date of employment by the COMPANY, during which period the COMPANY shall determine the employee's ability to perform satisfactorily the duties and requirements of the work. Layoff or discharge of an employee during such probationary period shall not be subject to the grievance procedure. 2. Upon satisfactorily completing the probationary period, the employee will be placed on the department's seniority list, and his or her departmental seniority shall date from the beginning of the probationary period. If an employee is transferred to another department Proposals – Management during his or her probationary period, his or her departmental seniority shall date back to the date of transfer to the new department upon completion of the probationary period. 8.06Transfers 1. When an employee leaves his or her department to accept a job in another department, his or her seniority rights in the department that he or she left shall not be forfeited for a period of 90 days. If the employee chooses to return to his or her home department (home department is where he or she has recall and return rights) within 90 days from the date of such transfer, he or she shall be returned to his or her former job not later than the third Monday following his or her request. If he or she requests transfer to another department within 12 months of his or her return to his or her home department, he or she shall, upon being transferred, forfeit all departmental seniority rights. 2. If an employee signs a plant posting and during the 90-day period in that job signs another plant posting, he or she has the original 90 days to return to his or her home department but has no right of return to the second department he or she left. 8.07Layoffs 1. Departmental When the number of employees in a department is reduced, layoffs shall be made on the basis of departmental seniority, providing those remaining are qualified to perform the work. 2. Divisional The employee ultimately laid off from a department shall be entitled to bump into the department of the least senior employee in the plant on the basis of plant seniority, provided he or she has the necessary qualifications to perform the job to which he or she is assigned. In multiple reductions involving the displacement of employees in the department in which reduction is taking place, the employees with the most departmental seniority of those on the original reduction schedule shall be retained in the department, providing employees in the reducing department do not have sufficient plant seniority to allow them to remain in the plant. Others reduced from the department shall be assigned to one or two shifts according to plant seniority. Upon notification to the production personnel department, special shift requests will be given consideration. 3. Plant The employee laid off from his or her division shall be entitled to bump into the department of the least senior employee in the plant, providing the claiming employee has Proposals – Management the necessary qualifications to perform the job to which he or she is assigned and has more than six months of plant seniority to his or her credit. In case any of the jobs vacated by the least senior employees in the plant are on a one- or two-shift basis as opposed to the ordinary three-shift basis, the employees being laid off from a division who have the most plant seniority shall automatically be given these one- or two-shift jobs. Upon notification to the production personnel department, special shift requests will be given consideration. 4. The employee so transferred shall accept, according to his or her seniority, the position vacated to make room for him or her. The supervisor shall have the right to place the crew as he or she sees fit on jobs carrying the same classified rate in all cases of emergencies and vacancies, taking into account the most efficient utilization of his or her working force. 5. When a classification is eliminated, the employee(s) occupying that classification may exercise his or her seniority to claim any classification within the department to which his or her seniority entitles him or her. The employee(s) then affected shall follow the normal layoff procedure. 8.08Recall after Layoff 1. When it is necessary to employ additional employees, employees laid off due to lack of work shall be recalled in order of their plant seniority, providing they are qualified to handle the jobs, before new employees are hired. 2. When an employee is recalled after layoff for a job in another department and accepts, he or she shall retain his or her home departmental seniority until such time as he or she declines an opportunity to return to his or her home department, subject to Section 8.06. If a laid-off employee declines, he or she shall remain on recall to his or her home department for a period not to exceed six months after layoff date. If, during the six months' period, the employee wishes to be considered for an opening in another department, he or she may do so by notifying the production personnel office. Thereafter, he or she must return to work when offered employment by the COMPANY or his or her seniority will be terminated. 8.09Leaves of Absence 1. Members of the UNION, not to exceed two in number at any one time, shall be granted leaves of absence for the duration of this Agreement to work directly for the local UNION. It is further agreed that four additional leaves shall be granted to any employees of the Proposals – Management COMPANY covered by this Agreement who have been or who may in the future be elected to or appointed to a full-time office in the international union or the state federation of labor, AFL-CIO, providing that such leaves do not exceed the duration of this Agreement. Upon being relieved of their official union positions, they shall be entitled to full seniority rights as though they had been employed by the COMPANY continuously. 2. Employees, not to exceed 1 percent of the UNION's membership, who are members of the UNION when delegated or elected to attend a UNION convention or conference shall be granted such leaves of absence as may be necessary, providing reasonable notice is given the COMPANY. 3. Page 397 4. Any employee elected to or appointed to any federal, state, or city public office shall be granted a leave of absence during the period he or she is actively engaged in such service. 5. Maternity Leave 6. An employee who becomes pregnant shall be granted a leave of absence upon request at any time during pregnancy and extending for three months after the birth of the child. Where leave of absence is taken, such employee shall not lose seniority that was acquired before the beginning of such leave of absence. 7. All employees placed on maternity leave of absence shall have their seniority dates adjusted upon their return by an amount of time equal to the number of days absent prior to and after the birth of the child. 8.10Supervisory and Other Salaried Positions 1. It is recognized that all supervisory employees are representatives of management and the assignment of their duties, promotions, demotions, and transfers is the responsibility of the COMPANY and cannot be determined on the basis of seniority. 2. Hourly employees promoted to a supervisory position shall accumulate seniority until such a time that he or she holds a supervisory position continuously for six months. After six continuous months his or her seniority in the bargaining unit shall be frozen as of the date of promotion. If later reduced to an hourly job, he or she shall be assigned to the skill class to which his or her accumulated or frozen seniority entitles him or her in the department that he or she left to become a supervisor. Supervisors who are reduced shall be required to certify at a given skill level within their classifications not later than 18 months following reduction. Proposals – Management No supervisor as herein defined shall have posting privileges until 30 days following his or her reassignment to an hourly production job. 3. Supervisory and other salaried employees will not perform the work of hourly production employees except in cases of emergency. ARTICLE 9.GRIEVANCE PROCEDURE AND NO-STRIKE AGREEMENT9.01Departmental Representatives The UNION may designate representatives for each section on each shift and in each department for the purpose of handling grievances that may arise in that department. The UNION will inform the human resources department in writing as to the names of the authorized representatives. Should differences arise as to the intent and application of the provisions of this Agreement, there Page 398 shall be no strike, lockout, slowdown, or work stoppage of any kind, and the controversy shall be settled in accordance with the following grievance procedures:9.02Grievances Step 1. The employee and the departmental steward, if the employee desires, shall take the matter up with his or her supervisor. If no settlement is reached in Step 1 within two working days, the grievance shall be reduced to writing on the form provided for that purpose. Step 2. The written grievance shall be presented to the supervisor or the general supervisor and a copy sent to the human resources department. Within two working days after receipt of the grievance, the general supervisor shall hold a meeting, unless mutually agreed otherwise, with the supervisor, the employee, and the departmental steward and the chief steward. Step 3. If no settlement is reached in Step 2, the written grievance shall be presented to the departmental superintendent, who shall hold a meeting within five working days of the original receipt of the grievance in Step 2 unless mutually agreed otherwise. Those in attendance shall normally be the departmental superintendent, the general supervisor, the supervisor, the employee, the chief steward, departmental steward, a member of the human resources department, the president of the UNION or his or her representative, and the divisional committee person. Step 4. If no settlement is reached in Step 3, the UNION COMMITTEE and a national representative of the UNION shall meet with the MANAGEMENT COMMITTEE for the purpose of settling the matter. Proposals – Management Step 5. If no settlement is reached in Step 4, the matter shall be referred to an arbitrator. A representative of the UNION shall meet within five working days with a representative of the COMPANY for the purpose of selecting an arbitrator. If an arbitrator cannot be agreed upon within five working days after Step 4, a request for a list of arbitrators shall be sent to the Federal Mediation and Conciliation Service. Upon obtaining the list, an arbitrator shall be selected within five working days. Prior to arbitration, a representative of the UNION shall meet with a representative of the COMPANY to reduce to writing wherever possible the actual issue to be arbitrated. The decision of the arbitrator shall be final and binding on all parties. The salary, if any, of the arbitrator and any necessary expense incident to the arbitration shall be paid jointly and equally by the COMPANY and the UNION. 9.03In order to ensure the prompt settlement of grievances as close to their source as possible, it is mutually agreed that the above steps will be followed strictly in the order listed and no step shall be used until all previous steps have been exhausted. A settlement reached between the COMPANY and the UNION in any step of this procedure shall terminate the grievance and shall be final and binding on both parties. Page 399 9.04The arbitrator shall not have authority to modify, change, or amend any of the terms or provisions of the Agreement or to add to or delete from the Agreement.9.05The UNION will not cause or permit its members to cause or take part in any sit-down, stay-in, or slowdown in any plant of the COMPANY or any curtailment of work or restriction of production or interference with the operations of the COMPANY.9.06The UNION will not cause or permit its members to cause or take part in any strike of any of the COMPANY's operations, except where the strike has been fully authorized as provided in the constitution of the international union. ARTICLE 10.VACATIONS10.01Vacation Time Accumulation 1. For employees with less than 36 months of credited service, vacation time will be accumulated at the rate of 0.02 hour for each straight-time hour worked. 2. For employees with 36 or more months but less than 120 months of credited service, vacation time will be accumulated at the rate of 0.04 hour for each straight-time hour worked. 3. For employees with 120 or more months but less than 180 months of credited service, vacation time will be accumulated at the rate of 0.06 hour for each straight-time hour worked. Proposals – Management 4. For employees with 180 or more months but less than 300 months of credited service, vacation time will be accumulated at the rate of 0.08 hour for each straight-time hour worked. 5. For employees with 300 or more months of credited service, vacation time will be accumulated at the rate of 0.10 hour for each straight-time hour worked. 10.02Use of accrued vacation time shall be granted at such times of the year as the COMPANY finds most suitable, considering both the wishes of the employee according to plant seniority and the requirements of plant operations.10.03One week of vacation pay shall consist of 40 hours' pay at the employee's regular straight-time hourly base rate.10.04Unused vacations may be accumulated across years, however, the time accrued will be discounted each year by the average percent increase of the bargaining-unit hourly wage. For example, if 20 days are accumulated and unused and there is a 5 percent increase, the accumulated days will be reduced to 19. 10.05If a holiday recognized within this Agreement falls within an employee's vacation period, he or she shall be granted an extra day of vacation, provided the employee is eligible for holiday pay on that holiday.10.06Employees who are laid off will be continued at their regular straight-time hourly wage until their accumulated vacation is exhausted. Seniority will continue to be accrued over the length of the accumulated vacation. Employees on layoff status who continue to be paid their accumulated vacation wages are ineligible to apply for unemployment benefits or to receive supplementary unemployment benefits until their vacation pay is exhausted.10.07Employees who terminate their employment for any reason are entitled to receive the value of their accumulated vacation at their straight-time hourly wage rate in their final pay.ARTICLE 11.LEAVES FOR ILLNESS AND FAMILY EMERGENCIES11.01Personal Injury or Illness Employees shall be entitled to five working days' sick leave (40 hours' straight-time pay at the employee's regular hourly base rate) in any one calendar year. Such benefits, not to exceed 8 hours in any day, will apply only to time lost from scheduled work for reasons of personal illness or injury except that no benefits will be paid for the first two scheduled working days of any period of such absence for any employee with less than five (5) years of credited service.11.02Accumulation Sick leave benefits unused in any year of the plan may be accumulated for possible use in the next two years. When fourthyear benefits become available, the unused benefits from the first year automatically cancel and so on for each succeeding year. Order of sick leave usage is, first, the current year's benefits and second, the oldest year's benefits. Employees out sick before January 1 whose absence due to that illness extends through January 1 will first use those benefits that were available at the commencement of the absence.11.03Waiting period There shall be no waiting period for the first five days (40 hours) Proposals – Management of sick leave usage in a benefit year. However, no benefits shall be payable for the first normally scheduled working day in any period of absence commencing thereafter. 11.04Definitions Page 401 1. Unavoidable absence is defined as follows: 2. Unavoidable absence caused by sickness or injury. 3. Emergencies in the immediate family. 4. Immediate family shall consist of the following with no exceptions:SpouseSonSisterMotherDaughterMother-in-lawFatherBrotherFather-in-law 5. In addition, the death of the employee's grandfather or grandmother will be recognized as an emergency in the immediate family to the extent of allowing one day's benefit, provided it is necessary that he or she be absent. 11.05Hospitalization and Convalescence 1. A 15-year hourly employee will receive straight-time pay at his or her regular hourly base rate for time lost due to hospitalization in a recognized hospital or convalescence thereafter that occurs during the first 40 hours he or she is scheduled to work in any week not to exceed 8 hours in any day. The total amount of such allowance will not exceed 80 hours in any one year, calculated from year to year. Benefits provided in this paragraph shall not apply to days of unavoidable absence for which benefits are paid under the provisions of Section 11.04. 2. A 25-year hourly employee shall receive straight-time pay at his or her regular hourly base rate for time lost due to hospitalization in a recognized hospital or convalescence thereafter that occurs during the first 40 hours he or she is scheduled to work in any week not to exceed 8 hours in any day. The total amount of such allowance shall not exceed 160 hours (an additional 80 hours to [a] above) in any one year, calculated from year to year. Benefits provided in this paragraph shall not apply to days of unavoidable absence for which benefits are paid under the provisions of Section 11.04 above. 11.06In order to obtain these benefits, the employee shall, if required, furnish his or her supervisor satisfactory reason for absence.11.07The COMPANY and the UNION agree to cooperate in preventing and correcting abuses of these benefits. Proposals – Management ARTICLE 12.GENERAL12.01Bulletin Boards The COMPANY shall provide bulletin boards that may be used by the UNION for posting notices approved by the industrial relations manager or someone designated by him or her and restricted to: 1. Notices of UNION recreational and social affairs. 2. Notices of UNION elections. 3. Page 402 4. Notices of UNION appointments and results of UNION elections. 5. Notices of UNION meetings. 6. And other notices mutually agreed to. 12.02Relief Periods 1. Relief periods of 25 minutes for every eight-hour work period will be on COMPANY time at such times in each department as will be most beneficial to the employees and the COMPANY. A lunch period on COMPANY time and premises may be substituted for relief period, provided the total time allowed for lunch and relief period in an eight-hour work period does not exceed 25 minutes. 2. Employees leaving the COMPANY premises for lunch during their shifts must clock out and will not be paid for the time they are away. 3. The relief and lunch periods in each department will be determined by the department supervisors and the UNION stewards, considering both the wishes of the employees and the requirements of efficient departmental operations. 12.03All benefits now in effect and not specifically mentioned in this Agreement affecting all hourly paid employees of the COMPANY shall not be terminated for the duration of this Agreement.12.04Sickness and Accident The COMPANY agrees to maintain its current sickness and accident insurance plans, as amended, effective December 1, 1985. Benefits begin one month after the sickness and accident initially occurred and continue for six months. Benefits will be equal to 60 percent of the employee's straight-time wage at the time of the sickness or accident.12.05Long-Term Disability Plan Subject to the provisions and qualifications of the longterm disability plan, there will be available monthly income benefits commencing after 26 weeks of continuous disability and continuing until recovery or death but not beyond the normal retirement Proposals – Management date. The monthly amount will be $25 per $1,000 on the first $20,000 of group life insurance.12.06Group Life Insurance 1. The COMPANY will pay for the first $20,000 of group life insurance available to employees. Employees will have the option of purchasing an additional amount of insurance in accordance with their earnings class schedule. 2. The present permanent and total disability benefit is replaced by a disability waiver-ofpremium provision under which coverage will be continued during periods of total disability, while longterm disability payments are being made, but reduced each month by the amount of the long-term disability benefit. Reductions will cease when the amount of insurance in force is equal to the greater of (a) 25 percent of the original amount or (b) the employee's 3. Page 403 4. postretirement life amount calculated as of the date of commencement of long-term disability payments. Coverage will be reduced to the latter amount at the earlier of (a) normal retirement age or (b) commencement of any employee retirement income. 12.07Retirement Income Plan 1. The COMPANY will sponsor a 401(k) retirement plan to be administered by Commonwealth National Bank, Central City, Indiana. Any employee may participate in the plan. Employees may make pretax contributions in any amount permitted by current federal tax statutes. For employees who choose to participate, the COMPANY will match 60 percent of contributions up to a maximum of 3 percent of gross pay in any given calendar year. From a menu of choices provided by the plan trustee, employees may allocate how contributions will be invested. 2. The COMPANY will provide for 100 percent vesting of its contributions after five (5) years' service. All individual employee contributions and earnings (losses) are the exclusive property of the contributing employee. 3. Contributions and any investment income earned on them that are forfeited by employees who terminate prior to the vesting of retirement income benefits will be returned to the COMPANY. If an employee terminates in a situation in which the value of the investments attributable to employer contributions are in a loss status, the terminating employee is not responsible for paying the difference between the contributions and the forfeited amount. Proposals – Management 4. The UNION acknowledges that neither the COMPANY nor the PLAN ADMINISTRATOR has a fiduciary responsibility to employees as a result of its contributions to or administration of the 401(k) plan. Both the UNION and the COMPANY strongly urge plan participants to seek and utilize professional financial advice before deciding how to allocate plan contributions to various investment options. 12.08Health Care Plan For the first $2,500 in medical costs incurred by an employee and his or her family each calendar year, the COMPANY will pay 80 percent of the cost when provided by a Preferred Provider Organization (PPO) approved by the employer. If the employee chooses care from another provider, the employer will pay 80 percent of the cost of the treatment as determined by the PPO fee schedule. For coverage beyond the first $2,500, the COMPANY will contract with Indiana Blue Cross-Blue Shield to provide hospitalization and medical insurance for all employees and their family members residing at home (except children over 21). The COMPANY will pay 90 percent of the premiums necessary to provide full coverage of necessary and approved surgical, medical, and hospital care under Blue Cross-Blue Shield fee schedules when performed by a participating doctor in a participating hospital according to procedures approved by Indiana Blue Cross-Blue Shield.12.09Departmental agreements between COMPANY and UNION representatives shall not supersede provisions contained in this Agreement should controversies arise. In no case, however, shall any retroactive adjustment be made if and when such a departmental agreement is canceled. Wherever possible, the UNION shall receive a copy of the agreement.12.10Optical Care Insurance The company will self-insure optical care for bargaining-unit members. The company will provide for one eye exam per year for each employee and his or her dependents as provided by the company's PPO. Examinations conducted by other providers will be reimbursed up to $15 per employee and/or dependent per year. The company will pay for one pair of standard prescription glasses every other year for employees and/or their dependents whose vision prescriptions are measured by the employer's PPO. Eyeware is dispensed by the employer's PPO. If eyeware is not dispensed by the PPO, the employer will reimburse up to $100 per employee and/or dependent every two years. In odd-numbered years of this agreement, employees with birth years ending in odd numbers will be eligible for new prescription eyeware; in even-numbered years, employees with even-numbered birth years will be eligible. Employees must submit claims not later than three months after expenses are incurred to Employee Benefits Coordinators, Inc., the COMPANY'S payment coordinator. Forms for requesting payment are available in the production human resources office.12.11Safety Proposals – Management 1. The COMPANY shall make reasonable provisions for the safety and health of the employees of the plant during the hours of their employment. Such protective devices and other safety equipment as the COMPANY may deem necessary to protect employees from injury properly shall be provided by the COMPANY without cost to the employees. The supervisor in each department will arrange for this equipment. 2. Gloves and uniforms required on such jobs and in such departments as the COMPANY may deem necessary shall be furnished and maintained by the COMPANY. 3. The UNION agrees in order to protect the employees from injury and to protect the facilities of the plant that it will cooperate to the fullest extent in seeing that the rules and regulations are followed and that it will lend its wholehearted support to the safety program of the COMPANY. 4. Page 405 5. Rotating UNION departmental representatives chosen by the UNION will participate in periodic safety inspections conducted by departmental supervision and safety staff. 6. The COMPANY agrees that it will give full consideration to all suggestions from its employees or their representatives in matters pertaining to safety and health, including proper heating and ventilation, and if these suggestions are determined to be sound, steps will be taken to put them into effect. 7. It shall be considered a regular part of each employee's regular work to attend such safety meetings as may be scheduled by the COMPANY. Hours spent at safety meetings will be compensated for as hours worked. 8. It is understood that the COMPANY shall not be required to provide work for employees suffering from compensable or other injuries; the COMPANY, however, will offer regular work that may be available to such employees, provided that they can perform all duties of the job. 12.12Other than for the recall provisions of the Agreement and the privileges accorded an employee under the COMPANY group insurance plans, employees on layoff shall not be entitled to the benefits of this Agreement except eligibility to continue in the health care plan at the employee's expense consistent with the requirements of federal COBRA regulations.12.13Supplementary Unemployment Benefit Plan 1. Objective To provide a greater measure of income protection during periods of unemployment for all eligible employees by supplementing state unemployment benefit payments. Proposals – Management 2. Principles 3. To provide income protection for permanent full-time employees as mentioned in (a) above. 4. To preserve the necessary differential between amount received while unemployed and straight-time weekly earnings while working so as to provide an incentive for the unemployed to become employed. This differential is defined to be 65 percent of straight-time weekly earnings less any normal deductions that are not of the savings variety. 5. The COMPANY will pay the difference between 65 percent of straight-time weekly earnings less normal deductions and the state unemployment benefit for which the employee qualifies. In the event the state benefit check is reduced because of ineligibility, the SUB payment will be reduced in the same proportion. The straight-time weekly earnings will be based on the week of layoff. The number of weeks an employee qualifies for depends on length of service. 6. Eligibility 7. Permanent, full-time employees covered under this Agreement. 8. Five years or more of service. 9. On layoff from the COMPANY as per seniority provisions in the UNION-MANAGEMENT Agreement and with the following conditions present: 10. Be able and available for work. 11. Maintain an active and continuing search for work. 12. Register and maintain constant contact with the State Employment Office. 13. Accept referral by the COMPANY to other employers in the area and accept resulting employment offers if deemed suitable under terms of the existing state system. 14. Layoff not due to a strike, slowdown, work stoppage, or concerted action. 15. Layoff not due to a labor dispute with the COMPANY or labor picketing conducted on the COMPANY premises that interferes with the COMPANY's operations. 16. Layoff not due to voluntary quit. 17. Layoff not due to disciplinary suspensions or discharges. 18. Layoff not due to leaves of absence. 19. Weeks of eligibility. 20. 0-5 years' service credit—0 weeks of SUB. 21. 5-26 years' service credit—1 week of SUB for each full year of service credit. 22. 26 or more years' service credit—26 weeks of SUB. Proposals – Management 23. Reinstatement When an employee has received any benefits for which he or she is eligible under this plan as per the schedule, he or she will have his or her full benefits reinstated after 6 months of continuous service. 24. To Obtain Benefits To obtain benefits, the employee must initiate the claim by preparing the necessary forms and presenting his or her state unemployment check weekly to the human resources office for verification and process of claim. 12.14The COMPANY will contract with Delta Dental Plan to provide full coverage for preventive dental care and basic restorations up to a limit of $200 annually. The plan will also provide for a lifetime orthodontic benefit of $2,000 for each employee and/or his or her spouse and children when a Delta Dental Plan dentist determines that orthodontia is necessary to prevent higher costs of future dental treatments if left uncorrected.12.15In the event any section or any article of this Agreement shall be found to be illegal or inoperable by any government authority of competent jurisdiction, the balance of the Agreement shall remain in full force and effect.12.16Nondiscrimination Agreement 1. The COMPANY and the UNION agree that the provisions of this agreement shall apply to all employees covered by the Agreement without discrimination, and in carrying out their respective obligations, it will not discriminate against any employee on account of race, color, national origin, age, sex, or religion. 2. In an effort to make the grievance procedure a more effective instrument for the handling of any claims of discrimination, special effort shall be made by the representatives of each party to raise such claims where they exist and at as early a stage in the grievance procedure as possible. If not earlier, a claim of discrimination shall be stated at least in the third-step proceedings. The grievance and arbitration procedure shall be the exclusive contractual procedure for remedying discrimination claims. ARTICLE 13.RENEWAL13.01This Agreement shall become effective as of March 1, 2012, and shall continue in full force and effect until 11:59 p.m., February 28, 2015, and thereafter from year to year unless written notice to modify, amend, or terminate this Agreement is served by either party 60 days prior to the expiration of this Agreement, stating in full all changes desired.13.02After receipt of such notice by either party, both parties shall meet for the purpose of negotiating a new agreement within 30 days from the date of service of said notice, unless the time is extended by mutual agreement. Proposals – Management