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Strike deal deemed fair.

After averting a strike by service employees, commercial building owners and managers last week said the contract settlement reached was fair.

The three-year agreement, arrived at by bargainers from the Realty Advisory Board on Labor Relations and with the Local 32B-32-J of the Service Employees, came at 5:30 a.m., 90 minutes before last Wednesday's strike deadline.

The union represents 30,000 workers who provide maintenance, security and cleaning to 900 office buildings in the city.

The pact will add $8 to the porter wages for current paychecks and $12 in each of the following two years. The old porter paycheck was $541.48. Benefit fund contributions will increase $17.43 the first year, $8.07 the second and $12.50 the last year of the contract. Porter wages are the subject of lease escalation clauses with tenants paying 'penny for penny' or 'wage plus fringe' or other variations as increases in rent.

A key provision provides a reduction of 10 percent of a property's workforce at the discretion of the owner. This provision begins March 31, 1993, and a reduction of 5 percent may take place up through March 1994. Then another five percent reduction can be implemented through March 1995.

James M. Berg, executive vice president of the Realty Advisory Board, said not every owner will take advantage of this service reduction element. It will, however, provide an opportunity for owners stung with vacancies to increase productivity and save on costs. "If you reduce the force, obviously the remaining employees will have to pick up the slack, Berg said.

"We considered it to be a significant advance to get the productivity reduction and to have the reduction provisions applicable to contractors as well as direct employees," he added.

The 10 percent workforce reduction will offset the approximately 11 percent cost of the package over the three years. Berg said the wage increases are the equivalent of a wage rise of 1.5 percent the first year, 2.2 percent the second and 2.1 percent the third. Benefits bring the rise to 4 percent, 3 percent and 3.5 percent, respectively.

While security guards and chairpersons are paid the same as the porters, foremen, handipersons and starters will end up with $622 per week the first year as wages will rise an additional $10, with $14 more in each of the next two years of contract.

"Various changes have been made to the health plan in order to reduce costs including a modification of the deductibles and coinsurance," Berg explained. "There were also changes in the plan benefit structure so certain items will be done at specific sites -- principally at our Health Center -- in order to save costs."

Board member, Edward Riguardi, whose firm, Koeppel Tener Riguardi, manages about 8 million square feet, said "Health costs continue to rise and go through the roof." He feels they were successful in reducing costs and thought it was a fair agreement. "Am I overjoyed? No," he said. "We wanted to get the two tiers and an entry wage and some givebacks. We did get a few things with the reduction though."

The severance package is tied to the reduction in workforce. Those employed for less than five years will receive wages ranging from two weeks and 22 weeks wages for those employed for 25 or more years. Additionally, the person with most seniority would be able to chose whether to resign and take the severance pay. It is equivalent to twice the severance pay for automation.

Pensions for workers will rise from $600 to $650 per month.

"These are rough times and its a difficult time to give any increase," noted Peter L. Malkin, chairman of W&M Properties which owns the JP Stevens Building at 1185 Avenue of the Americas. "One would like to encourage favorable wages, and the hope is there will be cooperation in productivity."
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Title Annotation:commercial building owners and managers arrive at contract settlement with service employees before strike deadline
Author:Weiss, Lois
Publication:Real Estate Weekly
Date:Jan 13, 1993
Previous Article:850 3rd Ave to sell.
Next Article:1140 6th Avenue sold.

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