Collective Bargaining and Labor Relations

Learning Objectives After reading this chapter, you should be able to: • Describe what is meant by collective bargaining and labor relations. • Identify the labor relations, goals of management, labor unions, and society. • Explain the legal environment's impact on labor relations. • Describe the major labor-management interactions: organizing, contract negotiations, and contract administration. • Describe the new, less adversarial approaches to labor-management relations. • Explain how changes in competitive challenges (e.g., product-market competition and globalization) are influencing labor-management interactions. • Explain how labor relations in the public sector differ from labor relations in the private sector. Human Resource Management Gaining a Competitive Advantage Chapter 14 Collective Bargaining and Labor Relations 1-1 The Labor Relations Framework Competitive Challenges - Legal - Stakeholder needs - High-performance work systems Goals - Employees and unions - Management - Society Union Structure and Administration The Labor Relations Framework • John Dunlop suggested a labor relations system that consists of four elements: Union Membership and Relative Bargaining Power Union and Management Interactions - Organizing - Negotiating - Administering 14-2 Goal Attainment - Employees and unions - Management - Society 14-3 – An environmental context – Participants – A web of rules – Ideology 14-4 Union Structure, Administration, and Membership Goals and Strategies • Society – Labor unions' major benefit to society throughout history has been the balancing of power and the institutionalization of industrial conflict in the least costly way. – The National Labor Relations Act (NLRA, 1935) sought to provide a legal framework conducive to collective bargaining. • Management – Must decide whether to encourage or discourage the unionization of its employees. • Labor Unions • National and International Unions – Craft unions – Industrial unions • Local Unions – Responsible for the negotiations of a contract as well as the day-to-day administration of the contract, including the grievance procedure. • AFL-CIO – Not a union but rather an association that seeks to advance the shared interest of its member unions at the national level. – Seek to give workers formal representation in setting the terms and conditions of employment. 14-5 14-6 Union Membership and Bargaining Power Union Security • Reasons for the consistent decline of union membership in the U.S. include: Checkoff Provision Right-toWork Laws Closed Shop Maintenance of Membership Union Shop – – – – – – Structural Changes in the Economy Increased Employer Resistance Substitution with HRM Substitution by Government Regulation Worker Views Union Actions Agency Shop 14-7 14-8 Legal Framework Unfair Labor Practices (ULPs) • The 1935 NLRA enshrined collective bargaining as the preferred mechanism for settling labor-management disputes. • Section 7 of the NLRA: employees have the "right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining." 14-9 Unfair Labor Practices - Unions • The NLRA prohibits certain activities by both employers and labor unions: – Employers cannot interfere with, restrain, or coerce employees in exercising their Section 7 rights. – Employers cannot dominate or interfere with a union. – Employers may not discriminate against an individual for exercising his or her right to join or assist a union. – Employers may not discriminate against employees for providing testimony relevant to enforcement of the NLRA. – Employers cannot refuse to bargain collectively with a certified union. 14-10 Enforcement • The National Labor Relations Board (NLRB) has the primary responsibility for enforcing the NLRA. • Originally the NLRA did not list any union unfair labor practices. These were added by the 1947 Taft-Hartley Act. • The 1959 Landrum-Griffin Act further regulated unions’ actions and their internal affairs – The NLRB is a five-member board appointed by the president. Additionally, there are 33 regional offices. – The NLRB has two major functions: • To conduct and certify representation elections. • To prevent unfair labor practices. – ULP charges are filed at and investigated by the regional offices. – i.e. financial disclosure and conduct of elections. 14-11 14-12 Why Do Employees Join Unions? The Process and Legal Framework of Organizing • Virtually every decision to join a union focuses on two questions? – Is there a gap between pay, benefits, and other conditions of employment that employees actually receive versus what they believe they should receive? – If such a gap exists, is it sufficiently large enough to motivate employees to remedy the situation? • An election may be held if at least 30 percent of the employees in the bargaining unit sign authorization cards. • A secret ballot election will be held. The union is certified by the NLRB if a simple majority of employees vote for it. • A decertification election may be held if no other election has been held within the year or if no contract is in force. • Certain categories of employees cannot be included in bargaining units. 14-13 Organizing Campaigns 14-14 The Negotiation Process • The NLRB may set aside the results of an election if the employer has created an atmosphere of confusion or fear of reprisals. • Associate union membership is a form of union membership in which the union receives dues in exchange for services but does not provide representation in collective bargaining. • Corporate campaigns seek to bring public, financial, or political pressure on employers during the organizing and negotiating process. 14-15 Distributive Bargaining - win/lose Intraorganizational Bargaining - conflicting objectives of different factions Integrative Bargaining - win/win Attitudinal Structuring - relationship and trust 14-16 Preparing Managers for Negotiations Negotiation Stages and Tactics • The early stages may include many individuals, as union proposals are presented. • During the middle stages, each side makes decisions regarding priorities, theirs and the other parties'. • In the final stage, momentum may build toward settlement or pressure may build as an impasse becomes more apparent. May involve interaction with negotiators or facilitators. • Seven steps: – Establish interdepartmental contract objectives. – Review the old contract. – Prepare and analyze data. – Anticipate union demands. – Establish the costs of various possible contract provisions. – Make preparations for a strike. – Determine the strategy and logistics. 14-17 Management’s Willingness to Take a Strike 14-18 Alternatives to Strikes • Mediation - Has no formal authority to force a solution; acts as a facilitator for the parties. • Fact finder - Investigates and reports on the reasons for the dispute and both sides' positions. • Arbitration - A process through which a neutral party makes a final and binding decision. • The following factors help determine whether management is able to take a strike: – – – – – Product Demand Product Perishability Technology Availability of Replacement Workers Multiple Production Sites and Staggered Contracts – Integrated Facilities – Lack of Substitutes for the Product 14-19 14-20 Grievance Procedure Grievance Procedure • The negotiation process typically occurs every three years. • Negotiation processes and administration processes are linked. • The effectiveness of grievance procedures may be judged on three criteria: – How well are day-to-day problems resolved? – How well does the process adjust to changing circumstances? – In multi-unit contracts, how well does the process handle local contract issues? • Duty of fair representation • Arbitration is a final and binding step. • Criteria arbitrators use to reach decisions include: – Did the employee know the rule and the consequences of violating it? – Was the rule applied in a consistent and predictable way? – Were the facts collected in a fair and systematic way? – Did the employee have the right to question the facts and present a defense? – Does the employee have the right of appeal? – Is there progressive discipline? – Are there mitigating circumstances? 14-21 New Labor Management Strategies 14-22 Labor Relations Outcomes • Strikes • Wages and Benefits • There are signs of a transformation from an adversarial approach to a less adversarial and more constructive approach to union-management relations. – The transformation includes increasing worker involvement and participation and reorganizing work to increase flexibility. • Union leaders have frequently resisted such change, fearing an erosion of their influence. – In 2006, private-sector unionized workers received, on average, wages that were 24 percent higher than nonunion counterparts. • Productivity – Some argue that unions increase productivity, while other argue that they decrease productivity. – Studies have concluded that union workers are more productive than nonunion workers although the explanation is unclear. • Profits and Stock Performance – These may suffer under unionization if costs are raised. 14-23 14-24 The International Context The Public Sector • The United States has both the largest number of union members and the lowest unionization rate of any Western European country or Japan. • The growing globalization of markets will continue to put pressure on labor costs and productivity. • The United States differs from Western Europe in the degree of formal worker participation in decision-making. 14-25 • During the 1960s and 1970s, unionization in the public sector increased dramatically. • As of 2006, 36 percent of government employees were covered by a union contract, and 42 percent of all government employees were covered by a collective bargaining contract. • Strikes are illegal at the federal level and in many states for government workers. 14-26