CITADEL

UNIVERSITY
BACKGROUND INFORMATION

Citadel University is a private, non-stock, sectarian educational institution, established

pursuant to the Corporation Code of the Philippines and duly recognized and licensed by CHED

and Dept. of Education to offer basic, secondary, tertiary, graduate and post graduate education. It has

been in existence for 50 years. The University is managed by a Religious group. Its highest

governing body is the Board of Trustees. The University is headed by a President. There are over

1,000 employees. There are three unions organized and recognized as the bargaining units for

their respective members. One union is composed of the non-teaching rank-and-file employees;

second union is comprised of elementary and high school teachers, while the third consists of the

college faculty.

PROBLEM STATEMENT

There is no agreement has been made by the parties.

ASSUMPTIONS

• The number of Rank and File employee is 500.

• Minimum daily wage per DOT 2006-2008

Ranges 288-300 php. Management follows 300.00.

• The School pays an annual seniority pay of P1,000,000.00.

• 25% of the 500 Rank and File employee has served for more than 25 years

• The number of Rank and File employee is 500.

• Minimum daily wage per DOT 2006-2008

• Ranges 288-300 php. Management follows 300.00.

• The School pays an annual seniority pay of P1,000,000.00.

• 25% of the 500 Rank and File employee has served for more than 25 years
First Course of Action: Stick with Management Proposal

Total Additional Cost to be Incurred in the year 2006

Description Amount

Salary Increase (500 employees X 500,000

1,000 increase)

Seniority Pay (10% X 1,000,000) 100,000

Vacation and Sick Leave No Change

Cash Incentive (500X25%X10,000) 1,250,000

Training Allowance (500X500) 250,000

Total 2,100,000

Second Course of Action: Agree with Union Proposal

Total Additional Cost to be Incurred in the year 2006

Description Amount

Salary Increase (500 employees X 1,250,000

2,500 increase)

Seniority Pay (50% X 1,000,000) 500,000

Vacation and Sick Leave 750,000

(5daysX300X500)
 Cash Incentive (500X50%X10,000) 2,500,000

Training Allowance (500X500) 250,000

Cash Assistance to Employees 3,125,000

Dreaded with Disease

(25,000X500X25%)

Total 8,375,000

Third Course of Action: Proposed New Collective Bargaining Agreement

• Salary increase of 1,750 instead of 2,500. This is the median between management 1K

increase to union of 2.5K increase.

• 30% increase of seniority pay. This is the median of 50 and 10%.

• Grant the 5 day extension of Vacation and Sick leave pay.

• Grant the training without any provision of the supervisor or department head.

• Cash Assistance for employees dreaded with disease will be shouldered half the union

and the other half from the school.

• Cash Incentive to employees who rendered more than 10 years of 5,000.00.

Total Additional Cost to be Incurred in the year 2006

Description Amount
 Salary Increase (500 employees X 875,000

1,750 increase)

Seniority Pay (30% X 1,000,000) 300,000

Vacation and Sick Leave 750,000

Cash Incentive (500X25%X10,000) 1,250,000

Training Allowance (500X500) 250,000

Cash Incentive (500X50%X5,000) 1,250,000

Total 4,675,000

Monetary Variances to the Three Courses of Action

Proposal 4,675,000

Management Proposal 2,100,000

2,575,000 Unfavorable

Proposal 4,675,000

Union Proposal 8,375,000

3,700,000 Favorable
 Net Effect

2,575,000 Unfavorable

3,700,000 Favorable 1,125,000 Favorable

ANALYSIS

1. Remain firm with the counter proposal.

1.1. Advantages

1.1.1. Controlled financial losses

1.2. Disadvantages

1.2.1. It can create labor unrest.

1.2.2. Can incur additional legal cost

2. Agree with the Union’s proposal.

2.1. Advantages

2.1.1. A harmonious relationship with the union

2.2. Disadvantages

2.2.1. May incur losses due to higher cost with declining number of enrollees.

2.2.2. Good facilities may suffer.

3. Create a new proposals that is favorable to both parties with less undesirable impact to the

organizations.

3.1. Advantages

3.1.1. Labor unrest may be prohibited

3.1.2. Still maintain its high standard education and improve

3.1.3. May have a good relationship with the union.

3.2.1. There is a possibility that both parties would not agree.

RECOMMENDATION

The best alternative course of actions is to create a new proposal that is favorable to both

parties with less undesirable impact with the organization.

APPENDICES

National wages and productivity commissions’ official website

Summary of Daily minimum wage rates per region 1989-2017

Wage per Region