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Noe11e_ch_14_FINAL.pptxChapter 14
Collective Bargaining and Labor Relations
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Learning Objectives
LO 14-1 Describe what is meant by collective bargaining and labor relations.
LO 14-2 Identify the labor relations goals of society, management, and labor unions.
LO 14-3 Explain the legal environment’s impact on labor relations.
LO 14-4 Describe the major labor–management interactions: organizing, contract negotiations, and contract administration.
LO 14-5 Describe new, less adversarial approaches to labor–management relations.
LO 14-6 Explain how changes in competitive challenges (e.g., product market competition and globalization) are influencing labor–management interactions.
LO 14-7 Explain how labor relations in the public sector differ from labor relations in the private sector.
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The Labor Relations Framework 1 of 2
Dunlop, Industrial Relations Systems - a successful industrial relations system
An environmental context
Participants
A “web of rules”
Ideology
It does not eliminate conflict.
Collective bargaining, mediation, arbitration, participation in decision making
LO 14-1
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The Labor Relations Framework 2 of 2
Katz and Kochan – three types of decisions
Strategic level
Functional level
Workplace level
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Figure 14.1 A Labor Relations Framework
Jump to long description in appendix
SOURCE: AFL-CIO, http://afl-cio.org/About/What-the-AFL-CIO-Does, accessed April 29, 2017.
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Goals and Strategies 1 of 3
Society
Labor unions’ major benefit to society is the institutionalization of industrial conflict.
Unilateral control by management sacrifices workers’ rights.
LO 14-2
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Goals and Strategies 2 of 3
Management
Discourage or encourage unions?
Shifts focus from dealing with individuals to dealing with a group
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Goals and Strategies 3 of 3
Labor Unions
Give workers a formal and independent voice in setting the terms and conditions of their work
Wages and safety and welfare
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Table 14.1 Typical Provisions in Collective Bargaining Contracts 1 of 8
Establishment and administration of the agreement
Bargaining unit and plant supplements
Contract duration and reopening and renegotiation provisions
Union security and the checkoff
Special bargaining committees
Grievance procedures
Arbitration and mediation
Strikes and lockouts
Contract enforcement
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Table 14.1 Typical Provisions in Collective Bargaining Contracts 2 of 8
Functions, rights, and responsibilities
Management rights clauses
Plant removal
Subcontracting
Union activities on company time and premises
Union–management cooperation
Regulation of technological change
Advance notice and consultation
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Table 14.1 Typical Provisions in Collective Bargaining Contracts 3 of 8
Wage determination and administration
General provisions
Rate structure and wage differentials
Allowances
Incentive systems and production bonus plans
Production standards and time studies
Job classification and job evaluation
Individual wage adjustments
General wage adjustments during the contract period
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Table 14.1 Typical Provisions in Collective Bargaining Contracts 4 of 8
Job or income security
Hiring and transfer arrangements
Employment and income guarantees
Reporting and call-in pay
Supplemental unemployment benefit plans
Regulation of overtime, shift work, etc.
Reduction of hours to forestall layoffs
Layoff procedures; seniority; recall
Worksharing in lieu of layoff
Attrition and promotion arrangements
Training and retraining
Relocation allowances
Severance pay and layoff benefit plans
Special funds and study committees
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Table 14.1 Typical Provisions in Collective Bargaining Contracts 5 of 8
Plant operations
Work and shop rules
Rest periods and other in-plant time allowances
Safety and health
Plant committees
Hours of work and premium pay practices
Shift operations
Hazardous work
Discipline and discharge
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Table 14.1 Typical Provisions in Collective Bargaining Contracts 6 of 8
Paid and unpaid leave
Vacations and holidays
Sick leave
Funeral and personal leave
Military leave and jury duty
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Table 14.1 Typical Provisions in Collective Bargaining Contracts 7 of 8
Employee benefit plans
Health and insurance plans
Pension plans
Profit-sharing, stock purchase, and thrift plans
Bonus plans
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Table 14.1 Typical Provisions in Collective Bargaining Contracts 8 of 8
Special groups
Apprentices and learners
Workers with disabilities and older workers
Women
Veterans
Union representatives
Nondiscrimination clauses
SOURCE: From Harry Katz, Thomas Kochan, and Alexander Colvin, An Introduction to Collective Bargaining
and Industrial Relations 4e, 2008. Reproduced with permission of The McGraw-Hill Companies, Inc.
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Union Structure, Administration, and Membership 1 of 8
National and International Unions
American Federation of Labor and Congress of Industrial Organizations (AFL-CIO)
Unions are craft or industrial
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Union Structure, Administration, and Membership 2 of 8
Local Unions
Collective bargaining and administration occur at the local level
May be a single facility or a number of facilities
Individual members’ participation – electing union officials and strike votes
Shop steward
Business representative
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Union Structure, Administration, and Membership 3 of 8
American Federation of Labor and Congress of Industrial Organizations (AFL-CIO)
Not a labor union
Represents labor’s interests in public policy issues such as civil rights, economic policy, safety, and occupational health
Provides information and analysis that member unions can use in their activities
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Figure 14.2 AFL-CIO Organization Chart
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Union Structure, Administration, and Membership 4 of 8
Union Security
Two contract provisions critical to a union’s security or viability
Checkoff provision
Flow of new members
Closed shop
Union shop
Agency shop
Maintenance of membership rules
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A second union security provision focuses on the flow of new members (and their dues). The strongest union security arrangement is a closed shop, under which a person must be a union member (and thus pay dues) before being hired. A closed shop is, however, illegal under the NLRA. A union shop requires a person to join the union within a certain amount of time (30 days) after beginning employment. An agency shop is similar to a union shop but does not require union membership, only that dues be paid.
Maintenance of membership rules do not require union membership but do require that employees who choose to join must remain members for a certain period of time (such as the length of the contract).
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Union Structure, Administration, and Membership 5 of 8
Union Security continued
Taft-Hartley Act
Right-to-work laws
Make union shops, maintenance of membership, and agency shops illegal
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Union Structure, Administration, and Membership 6 of 8
Union Membership and Bargaining Power
Membership has consistently declined as a percentage of employment.
Structural changes in the economy
Job growth in the service sector
Increased employer resistance
Competitive threats
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Union Structure, Administration, and Membership 7 of 8
Union Membership and Bargaining Power continued
Substitution with HRM
Employers attempt to remain nonunion by offering most of the things a union can offer
Substitution by government regulation
Fewer areas in which unions can provide worker rights or protection beyond those specified by law
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Union Structure, Administration, and Membership 8 of 8
Union Membership and Bargaining Power continued
Worker views
Downtrend in union membership
Interest in unions is still substantial
Union actions and industry structure
Corruption and unions’ adapting to changes have hurt their cause
Right-to-work laws
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Legal Framework 1 of 3
Wagner Act (also known as the National Labor Relations Act or NLRA) 1935
Supported collective bargaining
Union membership nearly tripled
Protected activities:
Union organizing
Joining a union, whether it is recognized by the employer or not
Going out on strike to secure better working conditions
Refraining from activity on behalf of the union
LO 14-3
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Table 14.3 Are You Excluded from the NLRA’s Coverage?
The NLRA specifically excludes from its coverage individuals who are
Employed as a supervisor
Employed by a parent or spouse
Employed as an independent contractor
Employed in the domestic service of any person or family in a home
Employed as agricultural laborers
Employed by an employer subject to the Railway Labor Act
Employed by a federal, state, or local government
Employed by any other person who is not an employer as defined in the NLRA
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Legal Framework 2 of 3
Unfair Labor Practices—Employers
Section 8(a) of the NLRA
Prohibits certain activities by both employers and labor unions
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Legal Framework 3 of 3
Unfair Labor Practices—Labor Unions
1947 Taft-Hartley Act
1959 Landrum-Griffin Act
Enforcement
National Labor Relations Board
Enforcement is based on the commerce clause in the U.S. Constitution.
Conduct and certify representation elections and prevent unfair labor practices
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Union and Management Interactions: Organizing 1 of 3
Why Do Employees Join Unions?
Is there a gap between the pay, benefits, and other conditions of employment that employees actually receive versus what they believe they should receive?
Is union membership seen as the most effective or instrumental means of change?
LO 14-4
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Union and Management Interactions: Organizing 2 of 3
The Process and Legal Framework of Organizing
Union representation election
Secret ballot election
Runoff election
Decertification election
NLRB determines the appropriate bargaining unit and the employees who are eligible to participate in organizing activities.
Ambush election rule
Browning-Ferris
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Union and Management Interactions: Organizing 3 of 3
The Process and Legal Framework of Organizing continued
Organizing campaigns: Management and union strategies and tactics
Unions attempt to persuade employees that their wages, benefits, treatment by employers, and opportunity to influence workplace decisions are not sufficient and that the union will be effective in obtaining improvements.
Management emphasizes that it has provided a good package of wages, benefits, and so on, and it will lead to costs for employees.
Associate union membership
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Associate union membership is a form of union membership by which the union receives dues in exchange for services but does not provide representation in collective bargaining.
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Union and Management Interactions: Contract Negotiation 1 of 6
The Negotiation Process
Distributive bargaining
Integrative bargaining
Attitudinal structuring
Intraorganizational bargaining
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Distributive bargaining focuses on dividing a fixed economic “pie” between the two sides. A wage increase, for example, means that the union gets a larger share of the pie, management a smaller share. It is a win–lose situation. Integrative bargaining has a win–win focus; it seeks solutions beneficial to both sides.
Attitudinal structuring refers to the relationship and trust between labor and management negotiators.
Intraorganizational bargaining reminds us that labor–management negotiations involve more than just two parties. Within management, and to an even greater extent within the union, different factions can have conflicting objectives.
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Union and Management Interactions: Contract Negotiation 2 of 6
Management’s Preparation for Negotiations
Establishing interdepartmental contract objectives
Reviewing the old contract
Preparing and analyzing data
Anticipating union demands
Establishing the cost of possible contract provisions
Preparing for a strike
Determining strategy and logistics
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Union and Management Interactions: Contract Negotiation 3 of 6
Negotiation Stages and Tactics
Initial stage includes all the various interest groups, sends a message to management about what the union feels it must do to satisfy its members, and it may also help the union achieve greater solidarity.
Middle stages decide importance of issues.
Final stage is agreement to avoid strike.
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Union and Management Interactions: Contract Negotiation 4 of 6
Bargaining Power, Impasses, and Impasse Resolution
What is the ability of each party to withstand a strike?
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Union and Management Interactions: Contract Negotiation 5 of 6
Management’s Willingness to Take a Strike
Can the company remain profitable over the long run?
Can the company continue to operate in the short run?
Important factors
Product demand
Product perishability
Technology
Availability of replacement workers
Multiple production sites and staggered contracts
Integrated facilities
Lack of substitutes for product
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Union and Management Interactions: Contract Negotiation 6 of 6
Impasse Resolution Procedures: Alternatives to Strikes
Mediation
Fact finding
Arbitration
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Mediation is the least formal but most widely used of the procedures (in both the public and private sectors). One survey found it was used by nearly 40% of all large private-sector bargaining units.61 A mediator has no formal authority but, rather, acts as a facilitator and go-between in negotiations.
A fact finder, most commonly used in the public sector, typically reports on the reasons for the dispute, the views and arguments of both sides, and (in some cases) a recommended settlement, which the parties are free to decline. The most formal type of outside intervention is arbitration, under which a solution is actually chosen by an arbitrator (or arbitration board).
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Union and Management Interactions: Contract Administration 1 of 5
Grievance Procedure
War Labor Board helped institutionalize the use of arbitration, reinforced by the Taft-Hartley Act
Three criteria
How well are day-to-day contract questions resolved?
How well does the grievance procedure adapt to changing circumstances?
In multiunit contracts, how well does the grievance procedure permit local contract issues (like work rules) to be included and resolved?
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Union and Management Interactions: Contract Administration 2 of 5
Grievance Procedure continued
Duty of fair representation
If the grievance does reach arbitration, the arbitrator makes the final ruling in the matter.
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The duty of fair representation is mandated by the NLRA and requires that all bargaining unit members, whether union members or not, have equal access to and representation by the union in the grievance procedure.
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Table 14.11 Steps in a Typical Grievance Procedure 1 of 3
Employee-initiated grievance
Step 1
Employee discusses grievance or problem orally with supervisor.
Union steward and employee may discuss problem orally with supervisor.
Union steward and employee decide (1) whether problem has been resolved or (2) if not resolved, whether a contract violation has occurred.
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Table 14.11 Steps in a Typical Grievance Procedure 2 of 3
Employee-initiated grievance continued
Step 2
Grievance is put in writing and submitted to production superintendent or other designated line manager.
Steward and management representative meet and discuss grievance. Management’s response is put in writing. A member of the industrial relations staff may be consulted at this stage.
Step 3
Grievance is appealed to top line management and industrial relations staff representatives. Additional local or international union officers may become involved in discussions. Decision is put in writing.
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Table 14.11 Steps in a Typical Grievance Procedure 3 of 3
Employee-initiated grievance continued
Step 4
Union decides on whether to appeal unresolved grievance to arbitration according to procedures specified in its constitution and/or bylaws.
Grievance is appealed to arbitration for binding decision.
Discharge grievance
Procedure may begin at step 2 or step 3.
Time limits between steps may be shorter to expedite the process.
Union or group grievance
Union representative initiates grievance at step 1 or step 2 on behalf of affected class of workers or union representatives.
SOURCE: From H. C. Katz, T. A. Kochan, and A. J. S. Colvin, An Introduction to Collective Bargaining and Industrial Relations, 4e, 2008. Reprinted with permission of The McGraw-Hill Companies, Inc.
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Union and Management Interactions: Contract Administration 3 of 5
Grievance Procedure continued
Due process questions
Did the employee know what the rule or expectation was and what the consequences of not adhering to it were?
Was the rule applied in a consistent and predictable way?
Are facts collected in a fair and systematic manner?
Does the employee have the right to question the facts and present a defense?
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Union and Management Interactions: Contract Administration 4 of 5
Grievance Procedure continued
Due process questions: continued
Does the employee have the right to appeal a decision?
Is there progressive discipline?
Are there unique mitigating circumstances?
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Union and Management Interactions: Contract Administration 5 of 5
Cooperative Labor-Management Strategies
Trend toward less adversarial workplace relations
To increase the involvement of individuals and work groups in overcoming adversarial relations and increasing employee commitment, motivation, and problem solving
To reorganize work so that work rules are minimized and flexibility in managing people is maximized
LO 14-5
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Labor Relations Outcomes 1 of 2
Strikes
Most recent strikes have involved white-collar employees
Strikes are the exception
Wages and Benefits
Unions influence pay, benefits, and promotions
Although wages and benefits are higher for union members, job satisfaction is lower, on average.
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Labor Relations Outcomes 2 of 2
Productivity
Unions both help and hurt productivity.
Union workers are generally believed to be more productive than nonunion workers overall.
Profits and Stock Performance
A company’s profits and stock performance may suffer if unions raise costs
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The International Context
Union Membership
Except for China, Russia, and Ukraine, the United States has more union members than any other country.
But it has almost the lowest union rate of any country.
Labor and social democratic political parties are commonplace in western Europe
Labor costs and productivity will continue to be key challenges
LO 14-6
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The Public Sector
Union Membership
Public-sector union growth among white-collar employees
Strikes are illegal at the federal level of the public sector and in most states
LO 14-7
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Nonunion Representation Systems
88.9% of workers not part of a union
Nonunion representation not equivalent to collective bargaining agreement or union
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Appendix of Image Long Descriptions
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Appendix 1 Figure 14.1 A Labor Relations Framework
The labor relations framework depicted in Figure 14.1 incorporates many of the ideas discussed so far, including the important role of the environment (the competitive challenges); union, management, and societal goals; and a separation of union–management interactions into categories (union organizing, contract negotiation, contract administration) that can have important influences on one another but may also be analyzed somewhat independently. The model also highlights the important role that relative bargaining power plays in influencing goals, union–management interactions, and the degree to which each party achieves its goals. Relative bargaining power, in turn, is significantly influenced by the competitive environment (legal, social, quality, high-performance work systems, and globalization competitive challenges) and the size and depth of union membership.
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Appendix 2 Figure 14.2 AFL-CIO Organization Chart
At the top is a box labelled 55 affiliated national unions.
The next box reads executive council 55 vice presidents, president, secretary-treasurer, executive vice president.
The next box lists AFL-CIO departments ;
Accounting • Campaigns • Civil, Human and Women’s Rights • Digital Strategies • Facilities Management • Government Affairs • Human Resources • Information Technology • International • Meetings and Travel • Office of General Counsel • Office of Investment • Organizing • Policy • Political • Public Affairs • Support Services
The next box lists trade and industrial departments:
Building and Construction Trades • Maritime Trades • Metal Trades • Professional Employees • Transportation Trades • Union Label and Service Trades
The final, bottom box reads thousands of affiliated local unions and 12.75 million members, 51 state federations
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