The case of the boss held hostage: the French trade unions have a way to solve disputes with management. They call it "sequestration" which means hostage-taking. Study this case and send your solutions for publication

Today's Manager, Oct-Nov, 2009 by Tan Chee Teik

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BLACK Carbon Co has been mining coal in the hill country of Eutopia for more than 20 years. It has a workforce of 3,000 workers. Because of customers swinging to the move for a green environment and the economic downturn, demand for coal has dropped 18 per cent for the past year. The company registered a loss of US$200,000 in the last financial year, and the projected loss for 2009 was expected to be US$350,000.

The mining director, R Bala, 48, held talks with the union about retrenching 550 workers otherwise the company may have to close the mines and concentrate on its other business in the hotel sector. Senior union officials were sceptical about the company's losses as they noticed that the owner, John Blackwell, 60, had recently bought a new BMW and the directors of the company were receiving fees in the region of US$150,000 each.

As negotiations with the union had dragged on for three months without any agreement, Blackwell's patience came to an end and he directed Bala to retrench 500 workers on 31 July. The retrenched workers were given their pink slips at 3 pm that day. The union officials were caught by surprise and the union chief, Sakozy Chen, 45, decided to hold Bala hostage until their demands were met.

At 3.30 pm Sakozy rounded up 90 unionised workers and they marched to Bala's office. Fifteen of them entered his room while the rest stood outside. One union member cut off the phone line to the office. Bala was shocked by the unruly gathering of workers.

"You can't barge into my office like this," he said in a shaky voice.

"As you can see," said Sakozy, "my members are unarmed. We are here to demand peacefully that you withdraw the retrenchment notices."

"You know that it is Blackwell's decision, I'm merely obeying his order," said Bala.

"It's an arbitrary decision," said Sakozy. "Our negotiations are continuing and Blackwell jumps the gun with this sudden unacceptable move. We will hold you hostage until you meet our demands."

"What you're doing is illegal. I shall call the police," said Bala.

"If you dare to do that, I won't be able to control the miners if they decide to turn your office upside down," said Sakozy calmly.

"Alright, you tell me what your demands are and I'll convey them to Blackwell by phone," said Bala.

"For a start," said Sakozy, "we want the retrenchment notices to be withdrawn immediately. We want Blackwell to apologise to the workers for acting arbitrarily and we want the company to provide three days of compassionate leave which the union has asked for previously."

Bala spoke to Blackwell on the handphone and advised him not to call the police as the workers may become violent or they could damage the mines. Blackwell said he would come to the office as soon as possible.

Blackwell arrived at the office at 5 pm. The workers jeered him as he entered Bala's office.

He said loudly to Sakozy: "Do you know that what you're doing is illegal? To my knowledge, taking the boss hostage is typically French. It is not done in this country. We can negotiate but not under duress."

Sakozy replied: "We cannot understand why senior management is receiving thousands of dollars in salaries and bonuses while workers are being retrenched. You have our demands which must be met before you and Bala can leave the office."

Blackwell was furious, he had never been treated so shabbily. He took out his phone and said: "I've no choice but to call the police to have all of you arrested for hostage-taking or kidnapping."

One worker snatched the phone from Blackwell and threw it into the waste paper basket. Sakozy said: "If you call the police, we'll be more unreasonable and call for an immediate strike by the miners. You know how expensive it will be for the company."

"Can I call my financial director and the four of us can sit down and continue with our negotiations?" asked Blackwell.

"It's too late for negotiations since you decided to retrench without consultation. You meet our demands by signing an agreement and both of you can go home for a home-cooked meal. Otherwise we'll sit here till you come to your senses. If you're hungry we can provide fast food. We poor workers can only afford such food while you entertain at fine dining restaurants," said Sakozy sarcastically.

One worker came into the room with a portable CD player and started to blast rap music while the others danced. This continued till midnight.

Questions to Ponder:

a) From the facts of the case, should Blackwell accede to the union's demands? If not, what course of action should he take?

b) Was the union leader right in holding the two men hostage?

c) Could the union have handled the case better?

Please send your views to the Editor at research@sim.edu.sg. Limit your comments to a maximum of 200 words. The best several original views will receive a gift. Please include your name and postal address.

All characters and firms mentioned in the case are fictional and bear no resemblance to any living person or existing firm.