Human Resource Management:Gaining a Competitive Advantage

Chapter 14

Collective Bargaining and Labor Relations

Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Learning Objectives

Describe collective bargaining and labor relations. Identify labor relations, goals of management, labor

unions and society. Explain legal environment's impact on labor relations. Describe major labor-management interactions:

organizing, contract negotiations and contract administration.

Describe new, less adversarial approaches to labor-management relations.

Explain how changes in competitive challenges are influencing labor-management interactions.

Explain how labor relations in the public and private sectors differ.

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Labor Relations Framework4 Elements of John Dunlop’s Labor Relations System

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Labor Relations Framework

Competitive Challenges- Legal- Stakeholder Needs- High-performance Work Systems

GoalsEmployees & Unions

- Management- Society

Union Membership&Relative

Bargaining Power

Union Structure&

Administration

Goal Attainment- Employees& Unions

- Management- Society

Union&ManagementInteractions- Organizing- Negotiating

- Administering14-4

Goals&Strategies Society

Labor unions' major benefit to society has been balancing power and institutionalization of industrial conflict in the least costly way.

National Labor Relations Act (NLRA, 1935) provides a legal framework conducive to collective bargaining.

Management decides to encourage or discourage unionization.

Labor Unions seek to give workers through collective action formal and

independent voice in setting employment terms and conditions.

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Union Structure, Administration & Membership

National and International Unions Craft unions Industrial unions

Local Unions Responsible for contract negotiations and day-to-

day contract administration, including grievance procedure.

AFL-CIO Not a union but rather an association that advances

its shared interest of its member unions at the national level.

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Union Security

Check offProvision

Right-to-Work Laws

ClosedShop

Maintenanceof Membership

UnionShop

AgencyShop

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Reasons for Decline in U.S. Union Membership

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Legal Framework

Wagner Act of 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."

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Unfair Labor Practices (ULPs)

NLRA prohibits certain activities by both employers

and labor unions.

Employers cannot: interfere with, restrain, or coerce employees in exercising

their Section 7 rights. dominate or interfere with a union. discriminate against an individual for exercising his or her

right to join or assist a union. discriminate against employees for providing testimony

relevant to enforcement of the NLRA. refuse to bargain collectively with a certified union.

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Unfair Labor Practices - Unions

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Enforcement

National Labor Relations Board (NLRB) enforces NLRA. NLRB is a five-member board appointed by the

president with 33 regional offices. NLRB’s 2 Major Functions:

1. conduct and certify representation elections.

2. prevent unfair labor practices. ULP charges are filed at and investigated by the

regional offices.

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Why Do Employees Join Unions?

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Process &Legal Framework of Organizing

An election may be held if at least 30%of employees in the bargaining unit sign authorization cards.

Secret ballot election will be held. The union is certified by NLRB if a simple majority of employees vote for it.

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- agricultural laborers, independent contractors, supervisors, and managers.

The Employee Free Choice Act- pending

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Organizing Campaigns

NLRB may set aside election results if the employer created an atmosphere of confusion or fear of reprisals.

Associate union membership- union receives dues in exchange for services but does not provide representation in collective bargaining.

Corporate campaigns bring public, financial or political pressure on employers during the organizing and negotiating process.

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Union and Management Interactions:Negotiation Process

Distributive Bargaining- Win/Lose

IntraorganizationalBargaining

-Conflicting Objectives-Different Factions

Integrative Bargaining- Win/Win

Attitudinal Structuring

- Relationship&Trust

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Preparing Managers for Negotiations

7 Steps:1. Establish interdepartmental contract objectives.

2. Review old contract.

3. Prepare and analyze data.

4. Anticipate union demands.

5. Establish costs of various contract provisions.

6. Make preparations for a strike.

7. Determine strategy and logistics.

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Negotiation Stages and Tactics

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Negotiation Stages and Tactics

Early stages may include many individuals, as union proposals are presented.

Middle stages, each side makes decisions regarding priorities, theirs and the other parties'.

Final stage, momentum may build toward settlement or pressure may build as impasse becomes more apparent. May involve interaction with negotiators or facilitators.

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Management’s Willingness toTake a Strike

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Management’s Willingness toTake a Strike

7 Factors If Management Is Able To Take a Strike:

1. Product Demand

2. Product Perishability

3. Technology

4. Availability of Replacement Workers

5. Multiple Production Sites and Staggered

Contracts

6. Integrated Facilities

7. Lack of Substitutes for Product

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Alternatives to Strikes

Mediation - Has no formal authority to force a solution; acts as a facilitator for parties.

Fact finder - Investigates and reports on reasons for dispute and both sides' positions.

Arbitration -process through which a neutral party makes a final and binding decision.

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Grievance Procedure

Negotiation process occurs every three years. Negotiation and administration processes are

linked.

Effectiveness of grievance procedures may be judged on three criteria:1. How well are day-to-day problems resolved?2. How well does the process adjust to changing

circumstances?3. In multi-unit contracts, how well does the

process handle local contract issues?

Duty of Fair Representation

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Grievance Procedure Arbitration is a final and binding step. Criteria arbitrators used to reach decisions

include:1. Did the employee know the rule and the

consequences of violating it?2. Was the rule applied in a consistent and

predictable way? 3. Were the facts collected in a fair and systematic

way?4. Did the employee have the right to question the

facts and present a defense?5. Does the employee have the right of appeal? 6. Is there progressive discipline?7. Are there mitigating circumstances?

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New Labor Management Strategies

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Labor Relations Outcomes• Strikes- impose significant costs on union members,

employers, and society. Wages and Benefits

In 2008, private-sector unionized workers received

21% higher wages that nonunion counterparts. Total compensation was 40 % higher for union-covered

employees because of unions’ effect on benefits. Productivity effects of unions is debated.

Union workers are more productive than nonunion workers although the explanation is unclear.

Profits and Stock Performance- may suffer under unionization if costs are raised.

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International Context Except for China, Russia and Ukraine, U.S. has

more union members than any other country.

Growing globalization of markets will continue to put pressure on labor costs and productivity.

U.S. differs from W. Europe in formal worker participation in decision-making.

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Public Sector

2008 some 36.8 % of government employees were union members.

Strikes are illegal at the federal level and in many states for government workers.

In 2008, 3 of 15 major work stoppages were

in the public sector.

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Summary

Labor unions seek to represent their members’ interests in the workplace.

May witness diminished ability to compete effectively in global economy.

Management in nonunion companies feel compelled to resist unionization.

Union losses in membership and bargaining power in the private sector.

Management and unions are seeking new, more effective ways of working together to enhance competitiveness while giving employees a voice in workplace decisions.

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