Question 1
Horizon Bikes (HB) manufactures electric bicycles. Following a rapid increase in orders, managers have introduced weekend overtime. Some production employees believe that the extra hours are unfair because their hourly pay has not increased. HB’s operations director wants to improve industrial/employee relations before the disagreement becomes more serious.
Define the term industrial/employee relations.
[2]
Question 2
Luma Foods (LF) operates a chain of healthy fast-food restaurants. LF has introduced a new app-based scheduling system that changes employees’ shifts at short notice. At the same time, managers have frozen wages because ingredient prices have increased. Employee representatives say that staff morale is falling.
Explain two possible sources of conflict in the workplace at LF.
[4]
Question 3
PortLine Ferries (PF) operates passenger ferries between two islands. Ferry crews claim that PF has ignored requests for safer rest breaks during overnight crossings. The crews want to put pressure on management but are concerned that a full strike would immediately affect tourists and local residents.
Describe two approaches that PF’s employees could use in this dispute.
[4]
Question 4
Aster Apparel (AA) produces uniforms for hotels. A trade union represents most sewing-machine operators. AA has lost a major contract and wants to reduce overtime rates. The union says that operators depend on overtime pay and that management should negotiate rather than impose the change.
Explain one advantage and one disadvantage to AA of using collective bargaining in this situation.
[4]
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Question 5
BrightPath Schools (BPS) manages five private secondary schools. Teachers and managers cannot agree on a new policy requiring evening online support for students. Both sides say they want to avoid public conflict because parents are concerned about exam results, but negotiations have reached a deadlock.
Explain how conciliation and arbitration could help resolve the dispute at BPS.
[4]
Question 6
Nova Foods (NF) produces packaged snacks for supermarkets. NF's production employees are represented by a trade union. The union argues that pay has not kept up with inflation, while NF's managers argue that the business cannot afford the union's demand.
| Item | Data |
|---|---|
| Current hourly wage | |
| Union's requested wage increase | |
| Management's offered wage increase | |
| Number of production employees | 160 |
| Average paid hours per employee per year | 1800 |
| Current annual profit | |
| Current annual inflation rate |
Item | Value | Unit |
|---|---|---|
Current hourly wage | 12.50 | CU/hour |
Union's requested wage increase | 8 | % |
Management's offered wage increase | 3 | % |
Number of production employees | 160 | employees |
Average paid hours per employee per year | 1800 | hours/employee/year |
Current annual profit | 310000 | CU/year |
Current annual inflation rate | 7 | % |
Calculate the additional annual wage cost if NF accepts the union's requested wage increase. Show all your working.
[2]
Comment on why pay may be a source of conflict at NF.
[2]
Question 7
CityCare Buses (CB) operates bus services for a large city. After negotiations over shift patterns failed, drivers began a work-to-rule. They followed every safety and rest procedure exactly and refused informal overtime.
Item | Data |
|---|---|
Normal number of routes completed per day | 520 |
Routes completed per day during work-to-rule | 442 |
Average passengers per route | 34 |
Average fare per passenger | 1.80 CU |
Variable operating cost saved per cancelled route | 6.50 CU |
Fixed daily costs | 18,000 CU |
Calculate CB's daily revenue lost as a result of the work-to-rule. Show all your working.
[2]
Comment on why work-to-rule may put pressure on CB's management.
[2]
Question 8
MetroClean (MC) provides cleaning services to hospitals under long-term contracts. MC’s cleaners are represented by three different unions, which often make separate pay demands. Hospital managers have warned MC that any service stoppage could lead to contract penalties. MC is considering either a no-strike agreement with unions or a single-union agreement.
Explain one benefit to MC of a no-strike agreement.
[2]
Explain one benefit and one limitation to MC of a single-union agreement.
[4]
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Question 9
Luma Components (LC) manufactures electronic parts for appliance producers. After collective bargaining over weekend pay failed, the union called a strike. LC can use some inventory to meet customer orders, but only for a short time. For this question, assume normal daily fixed costs continue during the strike and are included in the total short-term financial impact.
Item | Data |
|---|---|
Normal output per day | 2200 units |
Length of strike | 5 days |
Finished goods inventory available | 3000 units |
Contribution per unit sold | 4.20 CU |
Contract penalty for late deliveries | 14000 CU |
Normal daily fixed costs | 21000 CU |
Calculate the total short-term financial impact on LC of the strike, including the use of inventory and the contract penalty. Show all your working.
[3]
Comment on whether strike action is likely to be effective for LC's employees.
[3]
Question 10
GreenTech Panels (GTP) manufactures solar roof panels. Falling demand has led managers to propose redundancies unless employees accept changes to their contracts, including more flexible shifts. The union argues that the threat is damaging trust.
Item | Value |
|---|---|
Current number of employees | 90 |
Proposed redundancies | 12 employees |
Average annual salary per employee | 28000 CU |
Redundancy payment per employee | 10500 CU |
Expected annual overtime cost saving from contract changes | 96000 CU |
Current annual labour turnover | 6% |
Calculate the payback period, in months, for the redundancy payments from the annual salary savings. Show all your working.
[3]
Comment on one non-financial reason why the threat of redundancies may worsen conflict at GTP.
[2]
Question 11
Starline Hotels (SH) operates a chain of city hotels. Housekeeping employees are in dispute with SH over pay. A conciliation service has offered to help both sides reach a voluntary agreement before a strike begins.
Item | Data |
|---|---|
Union wage claim | 6% |
Employer wage offer | 2% |
Current annual housekeeping payroll (CU) | 2400000 |
Estimated lost contribution per strike day (CU) | 18000 |
Conciliation service fee (CU) | 6000 |
Expected strike days avoided if agreement is reached | 3 |
Calculate the additional annual payroll cost if SH settles halfway between the union's claim and the employer's offer. Show all your working.
[2]
Calculate the net saving in strike-related contribution, relative to a strike lasting the expected number of days, after SH pays the conciliation service fee. Exclude the additional wage cost from the halfway settlement in part (a). Show all your working.
[2]
Question 12
AeroParts Services (APS) repairs aircraft engines. APS currently negotiates separately with three trade unions. Managers are considering a single-union agreement recognizing the largest union as the sole representative for collective bargaining.
| Item | Union A | Union B | Union C |
|---|---|---|---|
| Members at APS | 130 | 70 | 50 |
| Annual negotiation hours with managers | 42 | 36 | 30 |
Additional information:
| Item | Data |
|---|---|
| Management cost per negotiation hour | 85 CU |
| Expected annual negotiation hours under single-union agreement | 55 |
| One-off first-year training and transition cost | 4000 CU |
Item | Union A | Union B | Union C | Single-union agreement |
|---|---|---|---|---|
Members at APS | 130 | 70 | 50 | — |
Annual negotiation hours with managers | 42 | 36 | 30 | — |
Expected annual negotiation hours | — | — | — | 55 |
Management cost per negotiation hour | — | — | — | 85 CU |
One-off first-year training and transition cost | — | — | — | 4000 CU |
Calculate the first-year net saving from introducing the single-union agreement. Show all your working.
[3]
Comment on one possible disadvantage of the single-union agreement for APS employees.
[2]
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Question 13
NexaCare (NC) is a private healthcare provider. It plans to use artificial intelligence software to allocate nurses to wards and monitor time spent with patients. Senior managers argue that the system will reduce costs and improve efficiency. Nurses are worried about surveillance, deskilling and possible future redundancies. NC has communicated the plan only through a short email.
Analyse the likely effects of NC’s technology-led change on workplace conflict.
[6]
Question 14
GreenPack Ltd (GP) manufactures recyclable packaging. A new competitor has reduced market prices. GP’s directors want warehouse employees to accept lower weekend premiums and more flexible duties. Managers have warned that, if employees reject the changes, GP may close one warehouse and make redundancies. Employees argue that the threat is unfair because GP remains profitable.
Analyse the possible effects on GP of using threats of redundancies and changes of contract in this dispute.
[6]
Question 15
Metro Print (MP) prints promotional materials for retailers. During a dispute over new contracts, MP's managers locked out the finishing department for three days. The lockout prevented employees from working and aimed to pressure the union to accept the new contracts. During the three days, the finishing department could not operate, earned no revenue, and MP paid no wages to the locked-out employees.
Item | Quantity and unit |
|---|---|
Number of locked-out employees | 45 employees |
Average daily wage per locked-out employee | 95 CU per employee per day |
Normal daily revenue from finishing department | 28000 CU per day |
Daily variable materials cost saved during lockout | 7200 CU per day |
Customer compensation per day of lockout | 3000 CU per day |
Length of lockout | 3 days |
Calculate the net short-term financial loss to MP from the lockout. Show all your working.
[3]
Comment on the suitability of a lockout for MP.
[2]
Question 16
MedApps (MA) develops software for hospitals. MA plans to introduce employee monitoring software after managers reported high absence levels. Employee representatives argue that employee participation through consultation meetings would reduce resistance and improve implementation.
Item | Data |
|---|---|
Cost of monitoring software | 72,000 CU |
Current absence days per month | 310 days |
Expected reduction in absence with employee participation | 15% |
Average cost per absence day | 120 CU |
One-off cost of consultation meetings | 11,000 CU |
Time period for first-year saving | 12 months |
Calculate the first-year net saving from introducing employee participation, excluding the cost of the monitoring software. Show all your working.
[3]
Comment on whether employee participation is likely to reduce conflict at MA.
[3]
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Question 17
FrescoFit (FF) manufactures chilled ready meals for supermarkets. FF has grown quickly, but profit margins are falling because of higher energy and ingredient costs. The managing director, Amina, wants to introduce automated packing machines and a digital monitoring system that records employees’ output and breaks. She also wants production employees to move from fixed weekday shifts to flexible shifts, including some weekend work. Amina says the changes are necessary to keep supermarket contracts and avoid future redundancies.
Production employees are concerned that the monitoring system will increase stress and that automation may reduce the number of jobs. They also argue that weekend work will harm family life and that pay has not increased in line with inflation. Most employees found out about the proposed changes from supervisors rather than through a formal meeting. A trade union represents many production employees and has asked FF to delay implementation until consultation has taken place.
Evaluate the likely impact on FF of using employee participation to reduce workplace conflict over the proposed changes.
[10]
Question 18
PolarPort Logistics (PPL) operates a container terminal handling imported food and consumer goods. PPL's dockworkers are union members and have rejected a pay offer from management. The union argues that pay has not kept up with inflation and that workers have accepted extra weekend shifts for two years. PPL argues that shipping volumes are unstable and that a large pay rise would increase fixed costs. The union is considering strike action for three days during the busiest week of the month. Management has warned that, if strike action occurs, it may use a lockout after the strike and review whether to close the night-shift operation. Selected operational and financial data for PPL are provided.
Measure | Value / assumption |
|---|---|
Union membership among dockworkers | |
Number of dockworkers | 150 |
Average annual wage per dockworker | $45,000 |
Annual wage bill | $6,750,000 |
Annual inflation rate | |
Union pay claim | increase |
Management pay offer | increase |
Containers handled per day (normal) | 2,000 |
Containers handled per day (busiest week) | 2,400 |
Contribution per container | $50 |
Typical penalty per delayed ship per day | $60,000 |
Aggregate penalty for all delayed ships per day of delay | $650,000 |
Penalty interpretation | $60,000 is per ship; $650,000 is the aggregate daily total |
Expected impact of work-to-rule | fewer containers for 3 days |
Penalty under work-to-rule | No separate estimate; $650,000 applies for each day ships are delayed |
Expected impact of strike action | stoppage for 3 days |
Penalty under strike action | $650,000 applies for each day ships are delayed |
Discuss whether strike action is the most suitable approach for PPL's dockworkers in this dispute.
[10]
Question 19
NorthBridge Distribution (NBD) operates regional warehouses for online retailers. NBD’s largest warehouse has experienced late deliveries and rising labour costs. To improve efficiency, NBD’s operations director wants to change employment contracts so that warehouse employees can be moved between picking, packing and loading at short notice. Management also wants to reduce paid break times during peak periods.
A recognized trade union argues that the contract changes are unfair and unsafe because loading work requires training and employees are already tired during peak periods. The union has proposed collective bargaining and has warned that employees may begin a work-to-rule if NBD imposes the changes. NBD’s directors are considering a threat of redundancies if employees do not accept the new contracts. Some directors have also discussed closing the least efficient warehouse if delivery performance does not improve.
Discuss the likely consequences for NBD of the different approaches to conflict being considered by employees and employers.
[10]
Question 20
HarborHealth Clinics (HHC) operates eight private medical clinics. HHC has experienced falling profit margins because insurance companies are paying lower fees for routine appointments. To reduce costs and waiting times, HHC's directors plan to introduce AI-based appointment monitoring and new contracts for nurses. The new contracts would require more evening shifts, reduce paid handover time and link part of annual pay to patient throughput targets. Nurses are represented by a trade union. The union claims that HHC has not consulted staff and that the monitoring system will increase stress and reduce patient care quality. HHC argues that without the changes it may close two small clinics next year. Nurses are considering a work-to-rule and have requested collective bargaining before any contract changes are introduced. Selected financial and workforce data for HHC are provided.
Metric | 2022 | 2023 | 2024 | Plan / estimate |
|---|---|---|---|---|
Revenue (£m) | 38.4 | 37.8 | 37.1 | — |
Operating profit margin (%) | 8.3 | 6.7 | 4.1 | — |
Nurse payroll costs (£m) | 14.9 | 15.7 | 16.5 | — |
Average patient waiting time (mins) | 18 | 21 | 25 | — |
Nurse turnover (%) | 11 | 14 | 18 | — |
Savings from new contracts (£m/yr) | — | — | — | 1.4 |
Closure cost of 2 clinics (£m, one-off) | — | — | — | 3.0 |
Lost contribution from 4-week work-to-rule (£m) | — | — | — | 0.6 |
Evaluate HHC's plan to introduce the new contracts and AI-based monitoring system without further collective bargaining.
[10]
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Question 21
BrightWave Studios (BWS) develops video games for international publishers. BWS is six months from releasing its largest game. Programmers, artists and quality assurance testers have complained about unpaid overtime, known in the industry as "crunch". Two trade unions represent different groups of employees, while many programmers are not union members. Management wants to avoid a strike because a delayed release would reduce sales and damage relationships with publishers. Employees want a guaranteed overtime policy and formal participation in scheduling decisions. BWS is considering four conflict-resolution approaches: conciliation, arbitration, a no-strike agreement and a single-union agreement. Selected data on the dispute are provided.
Area | Measure | Value |
|---|---|---|
Workforce | Programmers | 84 employees; 24 members of the programmers' union; 60 non-members |
Workforce | Artists | 36 employees; 30 members of the creative workers' union; 6 non-members |
Workforce | QA testers | 24 employees; 20 members of the creative workers' union; 4 non-members |
Financial impact | Revenue lost from a 1-week release delay | $600,000 |
Financial impact | Overtime pay cost for current extra hours until release | $180,000 |
People cost | Staff turnover in the last 12 months | 15 employees |
People cost | Recruitment cost per replacement | $8,000 |
Conciliation | Fee | $12,000 |
Conciliation | Time estimate | 2 weeks |
Arbitration | Fee | $45,000 |
Arbitration | Time estimate | 8 weeks |
Single-union agreement | Expected management time saved | 8 hours/week (about 416 hours/year) |
Recommend the most suitable conflict-resolution approach for BWS.
[10]
Question 22
SecondChance Solar (SCS) – a social enterprise
Read the resources and answer the questions that follow.
Resource 1 — Background
SCS is a social enterprise that installs low-cost solar panels on schools and community centres. It trains and employs young people who have been long-term unemployed. SCS reinvests most of its surplus into free technical training and subsidized solar installations in low-income areas. Demand has increased rapidly after a local government announced grants for renewable energy.
Resource 2 — Selected human resource and operational information for SCS
A short table shows recent changes in installation backlogs, employee turnover, overtime hours, the union's pay request, management's pay offer and the number of customer complaints linked to delayed installations.
Resource 3 — Public and employee reaction
A social-media post using the hashtag #FairPowerFairPay has received 180000 views in one week. One trainee installer commented: “We believe in SCS's mission, but weekend work is becoming normal and our pay has not kept up with the extra pressure.” SCS's operations manager said: “If we cannot change shift patterns, we may lose grant-funded contracts that finance our training programme.”
Resource 4 — Options under consideration
SCS's board is considering three possible responses: impose new contracts with compulsory rotating weekend shifts; enter conciliation with the trade union and create an employee participation group to redesign schedules; or accept the union's full pay demand and delay expansion into two new districts.
Indicator | Current figure | Previous figure (four weeks earlier) |
|---|---|---|
Installation backlog / jobs awaiting installation | 48 | 32 |
Employee turnover / % of workforce per quarter | 14% | 8% |
Overtime hours / hours per installer per week | 11 | 5 |
Customer complaints about delayed installations / complaints per month | 25 | 9 |
Union pay request / % pay rise | 12% | Current demand |
Management pay offer / % pay rise | 4% | Current offer |
Using Resource 1 and Resource 3, describe one source of workplace conflict at SCS.
[2]
Using Resource 2 and Resource 4, analyse the possible impact on SCS of using changes of contract to introduce compulsory rotating weekend shifts.
[6]
Using all the resources provided and your knowledge of business management tools and theories, recommend a plan of action for SCS to resolve the workplace conflict while maintaining its social purpose.
[17]
Question 23
Harbour Hope Logistics (HHL) – a social enterprise
Read the resources and answer the questions that follow.
Resource 1 — Background
HHL collects surplus food from supermarkets and restaurants and delivers it to shelters and community kitchens. It operates as a social enterprise: commercial delivery contracts help fund free food deliveries to vulnerable families. HHL employs paid warehouse staff and drivers, many of whom were previously homeless, and also coordinates volunteers.
Resource 2 — Selected operational and financial information for HHL
A short table shows recent changes in daily collections, late deliveries, cash reserves, average driver hours, the union's requested pay increase, management's proposed pay increase and the estimated cost of delayed deliveries.
Resource 3 — Industrial relations context
Drivers are considering a work-to-rule followed by strike action if collective bargaining fails. A supporter poll on HHL's social-media page found that 72% of respondents agreed with the statement “HHL should pay its drivers a living wage even if delivery growth slows.” HHL's founder stated: “A strike during winter would damage the communities we exist to serve.”
Resource 4 — Options under consideration
HHL's senior managers are considering whether to continue collective bargaining, threaten closure of the least profitable evening delivery route if costs rise, or use temporary agency drivers to reduce the impact of industrial action.
Indicator | Value | Recent change |
|---|---|---|
Daily collections | 8.4 tonnes/day | +14% in 6 months |
Late deliveries | 17% of deliveries | +6 percentage points in 6 months |
Cash reserves | £62,000 | -20% in 6 months |
Average driver hours | 47 hours/week | +3 hours/week |
Union pay request | 12% | — |
Management pay offer | 4% | — |
Estimated cost of delayed deliveries | £3,600/week | — |
Using Resource 3, describe one employee approach to conflict that HHL's drivers could use.
[2]
Using Resource 1, Resource 2 and Resource 3, analyse the likely effects of strike action by HHL's drivers on HHL's stakeholders.
[6]
Using all the resources provided and your knowledge of business management tools and theories, recommend a plan of action for HHL to manage the industrial dispute and protect its social impact.
[17]
Question 24
HarbourLink Trams (HLT) operates a tram network under a contract with a city government. The contract includes financial penalties if more than 5% of scheduled journeys are cancelled. Tram drivers, maintenance engineers and station employees are represented by two different trade unions. Recent negotiations over pay and night-shift allowances have failed. One union has voted in favour of strike action, while the other union wants an independent third party to help resolve the dispute.
HLT’s chief executive, Mateo, is worried that a strike would damage the company’s reputation with passengers and the city government. He is considering several approaches to conflict resolution: conciliation, arbitration, a no-strike agreement and a single-union agreement. Union representatives say they will not accept any arrangement that removes employee voice or weakens bargaining power.
Recommend the most appropriate approach or combination of approaches for resolving HLT’s industrial relations dispute.
[10]
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Question 25
CareMakers Connect (CMC) – a social enterprise
Read the resources and answer the questions that follow.
Resource 1 — Background
CMC provides affordable home-care visits for elderly and disabled people. It is a social enterprise that trains and employs carers who have faced barriers to employment. CMC has recently introduced a route-planning and monitoring app to reduce missed visits. Carers argue that the app increases surveillance and does not solve the problem of unpaid travel time between visits.
Resource 2 — Selected employee relations information for CMC
A short table shows staff turnover, missed visits, employee grievance cases, the number of carers represented by each union, average unpaid travel time and the operating surplus available for reinvestment.
Resource 3 — Stakeholder reaction
A carer posted online: “We need a real voice in decisions, not just an app that measures us.” The post was shared 9600 times by local community groups. A local authority commissioner stated: “Continuity of care is essential; repeated industrial action could put future contracts at risk.”
Resource 4 — Conflict resolution options
CMC's board is considering several approaches: conciliation over unpaid travel time; binding arbitration if negotiations fail; an employee participation council with elected carers; a no-strike agreement linked to a formal grievance procedure; and a single-union agreement to simplify collective bargaining.
Indicator | Current figure |
|---|---|
Staff turnover (% per year) | 18% |
Missed visits (per month) | 14 |
Employee grievance cases (per quarter) | 11 |
Carers represented by Union A | 24 |
Carers represented by Union B | 16 |
Carers represented by Union C | 8 |
Average unpaid travel time (per day) | 40 minutes |
Operating surplus available for reinvestment | £84,000 |
Using Resource 4, explain one benefit to CMC of using conciliation in this dispute.
[2]
Using Resource 2 and Resource 4, analyse one benefit and one limitation of introducing a single-union agreement at CMC.
[6]
Using all the resources provided and your knowledge of business management tools and theories, recommend a conflict resolution plan for CMC that improves employee relations and maintains continuity of care.
[17]
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