The contract chosen by labor covers the terms every company offers, it chooses what looks to be a favorable term, and would use it as the standard for the negotiation. There are usually four main categories labor and management negotiate about. They are wages, benefits, profit-sharing, and annual raise. The rules stipulate that if a contract expires in a given year or fiscal period, labor will be in a position to establish a bargaining position that will have a starting position and a negotiating ceiling.
According to the rule, the bargaining position of labor cannot be less than 80% or more than 150% of the prevalent current pay or contract. The negotiation ceiling could only make it to 10% of a given starting position. The starting point for the other categories benefit, profit sharing, and annual raise can fall between 0% and 150% of the prevalent pay or contract, whereas the ceiling cannot be over 10% of the current contract. However, each company could have its own starting position and negotiation ceiling based on what is applicable to the individual companies.
The key here had always been the demand labor makes depends on its knowledge of the existing opening offers, which would mean the starting point will be the best offer available for a given industry and it will decide how much more raise it will demand for the duration of the contract. This does not mean this stage will be the final stage, because labor will continue to compare offers since some of the companies could offer above what it requested. In a situation like this labor will ask the other companies to raise their offer.
If what labor demands is met by the companies there will be an agreement. Sometimes, there could arise a minor problem where what the company allows as a starting position could be high and when the 10% is calculated it could end up being higher than what labor demanded and in a situation like that it is possible to split the difference and allow the company to add half of the difference on the 10% of the initial positon so that it will not drag up the ceiling labor is negotiating for and is using as a benchmark.
On the other hand, if what a company offers fall below what labor demanded, strike would be underway. When the strike comes to a settlement usually the settlement will fall in between what labor demanded and what the company offers, which would be lower for the company. The length of a strike depends on the spread occurred between what the two groups offer. The maximum allowed strike period is 12 weeks and if there is no settlement within this period, both parties would have to accept arbitration.
The amount of wage difference could be $1 to require a one-week strike or a $300 benefit and a disagreement on annual raise or profit-sharing could also result in one-week strike. Since the negotiation starts as the end of the year or the fiscal period, strikes also take place around the end of the year or the physical period, but the company could continue to do what it is doing using the existing staff such as the management team when workers picket the last three weeks of the year or the fiscal period.