Labor Relations 4

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Chapter 1Chapter 1

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Phases in the Labor Relations ProcessPhases in the Labor Relations Process

1.1. Recognition of rights and responsibilitiesRecognition of rights and responsibilities  Legal protections and constraints on union and Legal protections and constraints on union and

management representativesmanagement representatives

2.2. Negotiation of the labor agreementNegotiation of the labor agreement  Strategies, tactics, and dispute resolution techniquesStrategies, tactics, and dispute resolution techniques

3.3. Administration of the negotiated labor Administration of the negotiated labor agreementagreement

 Management administers the agreement.Management administers the agreement.  Union monitors management’s compliance with the Union monitors management’s compliance with the

terms of the agreement.terms of the agreement.

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Exhibit 1.1 Elements in the Labor Relations Process

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Focal Point of Labor Relations: Work Focal Point of Labor Relations: Work RulesRules• Work Rule CategoriesWork Rule Categories

 Rules governing compensationRules governing compensation  Wages, overtime payments, vacations, shift premiumsWages, overtime payments, vacations, shift premiums

 Rules specifying employees’ and employers’ job rights Rules specifying employees’ and employers’ job rights and obligationsand obligations  No strike/no lockout, performance standards, promotion No strike/no lockout, performance standards, promotion

qualifications, job specifications, layoff provisionsqualifications, job specifications, layoff provisions

• Characteristics of Work RulesCharacteristics of Work Rules  Common or uniqueCommon or unique  Vague or specificVague or specific  Change over timeChange over time

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Exhibit 1.2 Examples of Work Rules

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Participants in the Labor Relations Participants in the Labor Relations ProcessProcess• Management OfficialsManagement Officials

 Corporate, divisional, plant-level managersCorporate, divisional, plant-level managers  Management consultants, “union avoidance” expertsManagement consultants, “union avoidance” experts

• Union OfficialsUnion Officials  Elected officers and representativesElected officers and representatives

• EmployeesEmployees  Vote to organize and vote to ratify negotiated Vote to organize and vote to ratify negotiated

agreementsagreements

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Participants…(cont’d)Participants…(cont’d) • The GovernmentThe Government

 Executive, legislative, and judicial branchesExecutive, legislative, and judicial branches  Actions (laws and regulations) can change labor-Actions (laws and regulations) can change labor-

management relationships.management relationships.

 Federal, state, and local levels of governmentFederal, state, and local levels of government

• Third-Party NeutralsThird-Party Neutrals  MediatorsMediators

 Facilitate bargaining activities.Facilitate bargaining activities.

 ArbitratorsArbitrators  Consider disputed issues and make decisions binding on Consider disputed issues and make decisions binding on

both labor and management.both labor and management.

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Three Basic Assumptions Underlying Three Basic Assumptions Underlying U.S. Labor RelationsU.S. Labor Relations

1.1. The free enterprise (capitalist) economic The free enterprise (capitalist) economic system creates an inherent conflict of interest system creates an inherent conflict of interest between employers (owners) and employees.between employers (owners) and employees.

2.2. Employees have a right to pursue their Employees have a right to pursue their employment interests using lawful means.employment interests using lawful means.

3.3. Collective bargaining provides for employee Collective bargaining provides for employee participation through their chosen participation through their chosen representatives in determination of work rules.representatives in determination of work rules.

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Exhibit 1.3 Basic Characteristics of the U.S. Private-Sector Labor Relations System

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Constraints or Infuences on Work Constraints or Infuences on Work RulesRules• State of the EconomyState of the Economy

 Inflation, interest rates, unemployment, and Inflation, interest rates, unemployment, and productivity affect job security.productivity affect job security.

• Labor MarketLabor Market  Skills and wage levels in the relevant labor marketSkills and wage levels in the relevant labor market  Demand for labor and shifts in labor market sectorsDemand for labor and shifts in labor market sectors

• Product MarketProduct Market  Vulnerability of disruption to product supply to Vulnerability of disruption to product supply to

customers from the potential for labor strikescustomers from the potential for labor strikes  Use of outsourced materials and products Use of outsourced materials and products

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Constraints or Infuences…(cont’d)Constraints or Infuences…(cont’d) • Financial MarketFinancial Market

 Availability and cost of funds for investmentAvailability and cost of funds for investment  Exchange rates that affect plant location choiceExchange rates that affect plant location choice  Funds borrowed to support ESOPsFunds borrowed to support ESOPs  Capital investments in nonunion and offshore facilitiesCapital investments in nonunion and offshore facilities

• TechnologyTechnology  Equipment changing or eliminating skills requiredEquipment changing or eliminating skills required  Pace and scheduling of the workPace and scheduling of the work  Work environment and tasksWork environment and tasks  Information exchangeInformation exchange

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Constraints or Infuences…(cont’d)Constraints or Infuences…(cont’d) • International ForcesInternational Forces

 Wars in Iraq and AfghanistanWars in Iraq and Afghanistan  North American Free Trade Agreement (NAFTA)North American Free Trade Agreement (NAFTA)  U.S. firms’ overseas investmentsU.S. firms’ overseas investments  Globalization and the global economy (24/7)Globalization and the global economy (24/7)  Low wages in newly industrializing countriesLow wages in newly industrializing countries  Rising volume of importsRising volume of imports

• Public OpinionPublic Opinion  Influential individuals and organizationsInfluential individuals and organizations  Attitudes and traditions of the communityAttitudes and traditions of the community

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How Unions Enhance Public OpinionHow Unions Enhance Public Opinion • Monitoring and reacting to negative comments Monitoring and reacting to negative comments

made in the media.made in the media.

• Getting organized labor’s positive message out Getting organized labor’s positive message out to the community.to the community.

• Forming alliances with various groups in the Forming alliances with various groups in the community.community.

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Union Membership Is DecliningUnion Membership Is Declining • Structural Changes in the Labor ForceStructural Changes in the Labor Force

 Shift from manufacturing to knowledge-based jobsShift from manufacturing to knowledge-based jobs

 Growth in professional, technical, and service workers Growth in professional, technical, and service workers

 Shifts in workforce demographics (more females and Shifts in workforce demographics (more females and younger workers)younger workers)

 Employment growth primarily in smaller firmsEmployment growth primarily in smaller firms

 Increases in the use of part-time and contingent Increases in the use of part-time and contingent workersworkers

 Economic recessionsEconomic recessions

1–15

Exhibit 1.4 Union Membership Trends, 1975–2014 (in thousands)

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Union Membership Is Declining Union Membership Is Declining (cont’d)(cont’d)• Organizational PracticesOrganizational Practices

 Union-avoidance practices by firmsUnion-avoidance practices by firms

 Improved human resources practicesImproved human resources practices

• Employment LawEmployment Law  Companies’ use of laws to forestall organizingCompanies’ use of laws to forestall organizing

 Laws that make unions appear unnecessaryLaws that make unions appear unnecessary

• Union Organizing EffortsUnion Organizing Efforts  Questions about the sufficiency of resources devoted Questions about the sufficiency of resources devoted

to organizing by unionsto organizing by unions

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Key TermsKey Terms • Labor relations processLabor relations process • Interest disputesInterest disputes • Rights disputesRights disputes • Work rulesWork rules • ManagersManagers • Management consultantsManagement consultants • Union representativesUnion representatives • EmployeesEmployees • Dual loyaltyDual loyalty • GovernmentGovernment • Third-party neutralsThird-party neutrals • MediatorsMediators

• ArbitratorArbitrator • EconomyEconomy • Discouraged workersDiscouraged workers • Labor marketLabor market • Product or service marketProduct or service market • Financial marketFinancial market • TechnologyTechnology • International forcesInternational forces • Public opinionPublic opinion • Worker centersWorker centers • Union densityUnion density • Employment-at-willEmployment-at-will