Chapter 14 Collective Bargaining and Labor Relations 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.
Chapter 14 Collective Bargaining and Labor Relations 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 laborrelations in the private sector.
The Labor Relations Framework Competitive Challenges - Legal - Stakeholder needs - High-performance work systems Goals - Employees and unions - Management - Society Union Membership and Relative Bargaining Power Union and Management Interactions - Organizing - Negotiating - Administering Union Structure and Administration Goal Attainment - Employees and unions - Management - Society
The Labor Relations Framework • John Dunlop suggested a labor relations system that consists of four elements: • An environmental context • Participants • A web of rules • Ideology
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 • Seek to give workers formal representation in setting the terms and conditions of employment.
Union Structure, Administration, and Membership • 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.
Union Security Checkoff Provision Right-to- Work Laws Closed Shop Maintenance of Membership Union Shop Agency Shop
Union Membership and Bargaining Power • Reasons for the consistent decline of union membership in the U.S. include: • Structural Changes in the Economy • Increased Employer Resistance • Substitution with HRM • Substitution by Government Regulation • Worker Views • Union Actions
Legal Framework • 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."
Unfair Labor Practices (ULPs) • 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.
Unfair Labor Practices - Unions • 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 • i.e. financial disclosure and conduct of elections.
Enforcement • The National Labor Relations Board(NLRB) has the primary responsibility for enforcing the NLRA. • 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.
Why Do Employees Join Unions? • 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?
The Process and Legal Framework of Organizing • An election may be held if at least 30 percent of the employees in the bargaining unitsign 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.
Organizing Campaigns • 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.
The Negotiation Process Distributive Bargaining - win/lose Integrative Bargaining - win/win Intraorganizational Bargaining - conflicting objectives of different factions Attitudinal Structuring - relationship and trust
Preparing Managers for Negotiations • 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.
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.
Management’s Willingness to Take a Strike • 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
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.
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? • 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 appropriate representation in the grievance process.
Grievance Procedure • 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?
New Labor Management Strategies • 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.
Labor Relations Outcomes • Strikes • Wages and Benefits • In 2000, private-sector unionized workers received, on average, wages that were 19 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.
The International Context • 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.
The Public Sector • During the 1960s and 1970s, unionization in the public sector increased dramatically. • As of 2003, 37 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.