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Michael R. Carrell & Christina Heavrin. Labor Relations and Collective Bargaining Eighth Edition. PART III: Cost of Labor Contracts. CHAPTER 8 Job Security and Seniority. © 2007 Prentice Hall Inc. All rights reserved. Chapter Outline. Job Security Seniority

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Michael R. Carrell & Christina Heavrin

Labor Relations and

Collective Bargaining

Eighth Edition

PART III: Cost of Labor Contracts


Job Security and Seniority

© 2007 Prentice Hall Inc. All rights reserved

chapter outline
Chapter Outline

Job Security


Calculation of Seniority


Layoff and Recall Rights

Advanced Notice of Shutdown

Shared Work

Determining Ability

Company Mergers


Employee Alcohol & Drug Testing

Public Sector Security Issues

labor news
Labor News

Railroad Unions, Carriers Clash Over Jobs

2005 contract talks between the five largest U.S. railroads and the unions that represent about 155,000 employees focused on one issue: job security .

The employers proposed to eliminate the traditional crafts and consolidate them into a “transportation employee” category under one agreement.

The unions opposed the change because it would: 1. Reduce the number of jobs 2. The unions are organized by crafts (engineers, conductors, switchmen, signalmen, firemen, oilers, maintenance) 3. Safety – the reduction from two workers (engineer, conductor) to one.

job security
Job Security

Workers’ demands for job security have never waned over the years, including:

Guarantee of work

Right to remain employed during times of layoff

Recall rights during times of layoff

Right to a fair hearing in discipline cases

Industrial jurisprudence

Generally embodies principle that operation of the organization will not be determined by a single individual or group of top management officials

Employees have rights that guarantee input into important decisions regarding their employment

job security cont
Ultimate labor-management conflict

Management needs a free hand in workplace operations

Labor requires protection against unreasonable managers and a voice in decision making

Theories used to justify staffing decisions based on seniority

Human capital theory

Implicit contract theory

Internal labor market theory

Larger unions able to negotiate more job security provisions

Job Security (cont.)

Seniority system

Set of rules governing the allocation of economic benefits and opportunities on the basis of service with one employer

Most commonly negotiated method of comparing employees for promotions and layoff-recall decisions

seniority cont
Seniority is the most important measure of employee job security

Easy to define and measure

Management would prefer to use performance appraisals as the basis for employment decisions

Labor views performance appraisals as subjective

Seniority is not required by law nor is it an inherent right of employees

Mandatory subject of collective bargaining

Seniority (cont.)
calculation of seniority
Calculation of Seniority

New employees generally begin acquiring seniority on the date & time of hire

Seniority may not be awarded until completion of probationary period

Seniority list

Created to ensure complete agreement regarding seniority rights of each employee

Seniority rights vested within a variety of employee units


Employees with greater seniority, whose jobs have been phased out, have the right to displace workers with less seniority, if they are at least “as qualified”

seniority rights
Seniority Rights




Employee units in

which seniority

rights are vested



calculation of seniority cont
Seniority and the ADA

U.S. Airways, Inc. v. Barnett

Employee is not entitled to a job assignment as a reasonable accommodation of his disability if the assignment would conflict with the rules of a bona fide seniority system


Union officers and committee personnel have preferred seniority rights for layoff and recall situations

Value of superseniority depends on the frequency and degree of layoffs typically experienced in the company

Calculation of Seniority (cont.)

Management’s position:

Often disagrees with the use of

seniority in promotion

Contend that promotion should be

based on performance and required skills

Contend that promotion based on

seniority takes away employee incentive

Only 5 percent of collective bargaining agreements use seniority as the sole determinant of promotion

Unless restricted by contract, mgmt. can fill temporary vacancies


promotions cont
Most labor agreements use both seniority and qualifications jointly to determine promotions

Difficult to determine:

Weight of each factor

Method for measuring skill (i.e., qualifications)

Arbitrators typically hold that management has the right to judge, weigh, and determine qualifications as long as methods are fair and nondiscriminatory

In most disputed cases, the employer’s decision is supported

Job bidding

To avoid grievances, process is detailed in the labor agreement

Promotions (cont.)
layoff and recall rights
Layoff and Recall Rights

Seniority is of less importance when layoffs are temporary or of an emergency nature

Cumbersome seniority rules need not be followed for brief layoffs

Probationary employees usually are laid off first

Layoffs in skilled trades commonly occur by seniority within the trades or classifications

layoff and recall rights cont
Layoff procedures fall into three categories

Layoff based entirely on seniority

Layoff based on seniority among employees that management believes are capable of performing the work

Layoff based on seniority only if ability and other factors are equal (arbitrators interpret “equal” as “relatively equal”)

Firefighters Local Union No. 1784 v. Stotts

Upheld a seniority system even though the resulting layoffs adversely affected employees hired under a consent decree to remedy past discrimination

Layoff and Recall Rights (cont.)
layoff and recall rights cont16

Contracts usually call for recall on the basis of plantwide seniority

Ability is not usually questioned by management

Temporary workers

Unions want to add them to the bargaining unit

Layoff and Recall Rights (cont.)
advanced notice of shutdown
Advanced Notice of Shutdown

Worker Adjustment and Retraining Notification Act (WARN) - 1988

Employers required to apprise workers and local communities of plant closings or mass layoffs

60 days advance written notice required once decision is made

Advance notice of temporary shutdown required whenever:

A large enough number of workers affected for more than six months

At least 50 employees and 33 percent of all employees

500 or more employees are laid off

advanced notice of shutdown cont
Worker Adjustment and Retraining Act (cont.)

WARN affects most private sector and nonprofit employers

Does not supercede state laws or labor agreements that require additional assistance or notification

Exemptions raise questions about effectiveness of the law

Half of all contracts provide for additional notice beyond that required by WARN

WARN gives communities and workers time to prepare

United Food and Commercial Workers Union Local 751 v. Brown Group, Inc.

If employer did not provide sufficient notice of a plant closing, union may sue on behalf of affected workers

Advanced Notice of Shutdown (cont.)
shared work
Shared Work

Workers have their work time reduced

E.g., workers’ hours cut by one day per week

Union opinions

Preferable for 100 percent of employees to work 80 percent of their regular hours than to have 80 percent of employees work 100 percent of their regular hours

Without shared work, 20 percent of employees would be laid-off

Long-term use of shared work is not endorsed

Management has been slow to support these concepts

determining ability
Determining Ability

Generally agreed that management has the right to determine how ability is to be measured

Specific factors may be limited by the contract

Challenges to management’s determination of ability

Employer has burden of proof to show that a bypassed senior employee is not competent for the job

Employer not required to show that a junior employee is more competent

determining ability cont
Determining Ability (cont.)


Trial period


Criteria used

to determine

employee ability












company mergers
Company Mergers

One, or a combination of principles may

be used to combine seniority lists:

Surviving group principle - seniority

lists are merged by adding names of employees of acquired company to the bottom of seniority list of the acquiring company

Length of service principle - employee’s length of service is considered, regardless of which company he/she worked for prior to the merger

Follow the work principle - employees are allowed to continue previously earned seniority on separate seniority lists when their work with the merged company can be separately identified

company mergers cont
Methods used to combine seniority lists (cont.)

Absolute rank principle - employees receive rank positions on the merged seniority list equal to their rank position on the prior seniority lists

Ratio-rank principle - ratios established based on the total number of employees in the two groups to be merged

Company Mergers (cont.)
subcontracting outsourcing
Subcontracting: Arranging to make goods or perform services with another firm that could be accomplished by the bargaining unit employees within the company’s current facilities

Management’s insistence on its right to subcontract often leads to grievances

Fibreboard Paper Products v. NLRB

Subcontracting is a mandatory subject for collective bargaining

Arbitrators use standards of reasonableness and good faith in determining whether clauses in contract have been violated by subcontracting

Scope clause: prohibits outsourcing of any work if union member is on furlough

Subcontracting, Outsourcing
subcontracting cont
Subcontracting (cont.)

Type of






on union



Arbitrators’ standards

in subcontracting



History of


Regularity of


Effect on

unit employees


of qualified


Availability of

equipment and


Duration of




Moving work previously done at one location by union workers to another location that is generally nonunion

Issue is intertwined with subcontracting

Dubuque Packing Co. v. NLRB

Relocating work is a mandatory bargaining subject

Reversed previous court decisions

Unless an agreement contains specific language barring subcontracting, a union will have difficulty stopping it


Result of either a change in collective bargaining representative or employer

Change in collective bargaining representative

Existing collective bargaining contract is not binding for the successorship representative

Change in employer

If industry remains the same, successor employer required to recognize existing collective bargaining unit

Not bound by existing collective bargaining agreement

successorship cont
Fall River Dyeing v. NLRB

Court suggested three factors for application of successorship doctrine

Substantial continuity

Appropriate bargaining unit

Predecessor’s workers

Successor employer has several rights, including the rights to:

Hire its own workers

Disregard the predecessor’s labor contract

Set the initial terms of employment

Successor employer may be obligated to remedy unfair labor practices and grievances of predecessor

Successorship (cont.)
employee alcohol and drug testing
Employee Alcohol and Drug Testing

Important job security issue

Unions concerned about:

Unreliable and/or biased tests

Invasion of privacy

NLRB has ruled that drug testing is a mandatory subject of bargaining

Testing of job applicants who are not members of the bargaining unit is a management right

employee alcohol and drug testing cont
Pre-employment testing policies address:


No rescheduling of test

Test validity


Drug testing policies


Probable cause

After accidents

Employee Alcohol and Drug Testing (cont.)
employee alcohol and drug testing cont31
Employee Alcohol and Drug Testing (cont.)

Employee attitudes toward drug testing

Random testing has aroused strongest criticism

Unions insist on probable cause or accident-related program

Negotiation issues

Valid testing procedure

On-the-job impairment

Refusal to be tested

Supervisor training

public sector security issues
Public Sector Security Issues

2005 California election: job security of public employees was central issue, unions defeated initiatives of Gov. Schwarzenegger


Outsourcing public sector work to the private sector

Unions try to prevent civil service employees from losing their jobs to contract labor

Difficult to negotiate if management intends to outsource

Contract labor treated differently

privatization cont
Privatization (cont.)

Advocates of Privatization

  • Produces better management of programs
  • Frees public administrators from day-to-day operations
  • Provides specialized skills otherwise too costly for government to hire
  • Reduces capital outlays for facilities and equipment
  • Motivates private sector managers to perform well

Opponents of Privatization

  • Savings often are illusory
  • Dependence on contractors makes governments more vulnerable to cost increases
  • Private contractors expect to earn a profit
  • Laying off government employees results in unemployment compensation
  • Lowers quality of service
  • Lose in-house expertise
public sector security issues cont
Public Sector Security Issues (cont.)

School vouchers

Provide public funds that can be used for private schools

Force public schools to improve in order to remain competitive

Zelman, Superintendent of Public Instruction of Ohio v. Simmons-Harris

Court upheld an Ohio voucher program

public sector security issues cont35
Public employee drug testing

Executive Order 12564

Provided drug testing of federal workers

Court stated that employees, whose duties involve public safety or law enforcement, may be tested

Not a violation of the Fourth Amendment

Public Sector Security Issues (cont.)