Job security in Xerox contract - labor contract

Monthly Labor Review, Sept, 1994 by Michael H. Cimini, Charles J. Muhl

After only 3 weeks of early, win-win bargaining, Xerox Corp. and Local 14A of the Amalgamated Clothing and Textile Workers reached agreement on a 7-year contract that provides greater job security for some 3,850 workers in Webster, NY, in exchange for changes in the wage structure. The contract came on the heels of the company's announcement that it would slash 10,000 jobs from its worldwide work force and reexamine all its operations, including the Webster plant, which was slated for layoffs of 1,200 bargaining unit employees over the next 2 years unless the company could substantially reduce costs at the plant. The layoff announcement prompted the union to seek early negotiations of its contract, which was not due to expire until March 1995.

Under terms of the settlement, Xerox guarantees full pay to current employees for the next 7 years if it closes the plant or moves operations to another location. In addition, terms credit laid-off employees with up to 3 years of service for pay purposes upon recall. The contract also offers a voluntary one-time reduction-in-force program that provides participants with up to 1 full year's pay upon resignation. Participants can elect to be covered under either the current retirement insurance plan or a new one that will be offered in 1994. Under the program, participants also may "bridge" time to reach early retirement (at least age 55 with 10 or more years of service) by getting half pay for up to 2 years.

The pact freezes wage rates for current employees and establishes a two-tier wage system, with new employees in better paying job classifications starting at 50 percent of the normal base rate and progressing at 10-percent incremental increases until the full rate is reached after 5 years. The settlement also creates a series of new entry-level positions that will start at $7.80 an hour and advance to $10 an hour after 3 years. If current employees are involuntarily transferred into one of these jobs, their pay will be protected for at least 3 years. The contract also includes a new, lower rate schedule for cleaners--which starts at $6 an hour and progresses to $8 after 3 years--but grandfathers incumbents for 2 years at the current $10 an hour rate.

The contract calls for continuation of the cost-of-living adjustment (COLA) provision that has generated 3- to 4-percent average wage increases every year since the clause was introduced in 1974. In addition, the settlement rolls into wages up to 44 cents an hour of COLA previously earned under the prior contract and the full amount of COLA adjustments earned during the first 4 years of the current agreement.

The pact offers a series of new benefit options, including life cycle accounts, flexible health care for retirees, and cash value life insurance. A $10,000 life cycle account, which is fully company-funded, allows an employee to pay for child care costs and other expenses that will be specified in the future. At retirement, any unused balance would be transferred to the employee's retiree benefit allowance. Another new benefit, flexible retiree health care, permits a retiree to opt for the current health care plan, a health maintenance organization plan, or a Blue Cross/Blue Shield plan, each of which entails different employee cost-sharing arrangements. The third new benefit, the cash life insurance program, provides improvements in both pre- and post-retirement death benefits, alternative use of the equity in the plan while the insured is alive (living benefits), and other options. Other changes in benefits obligate the employer to provide $200,000 in funding for the Sidney Hillman Health Center, which provides pharmacy and optical services to union members; and cut workers' compensation benefits to 67 percent of straight time earnings for a 40-hour workweek, down from 80 percent.

A number of work rule changes were agreed to, several of which give Xerox more flexibility in its operations. The company may hire more temporary workers--up to 15 percent (formerly 10 percent) of the permanent work force in a year--and may transfer workers within a plant so long as they do not suffer a pay cut or have to change shifts. Other work rule changes permit employees earning 2 or more weeks of vacation to use 1 week's vacation in single days or half days; split holidays for distribution employees (50 percent take the day before the holiday and 50 percent take the day after); eliminate the December Holiday shutdown beginning in 1995; and allow employees to take Martin Luther King, Jr.'s Birthday as either a prescheduled vacation day or a day off without pay.