MGT 430 – 2015Class 17 - Chapter 14

Collective Bargaining & Labor Relations

Need to Know

1. Unions and labor relations’ role in organizations.2. Labor relations goals of management, labor

unions, and society.3. Laws and regulations that affect labor relations.4. Union organizing process.5. How management and unions negotiate

contracts.6. Practice of contract administration.7. Cooperative approaches to labor-management

relations.

WHAT ARE UNIONS• Labor unions are legally recognized as representatives of workers

• Activities include:Collective bargaining over wages, working conditions, &

division of laborRepresent union members in disputes with

managementRepresent members over perceived violations of the

contractPolitical lobbying – local, state, national governments

Why Do People Join Unions?Achieve negotiating power relative to:

• Pay & Benefits• Job Security• Legal protection against unfair labor practices• Worker’s rights & workplace issues• Affect government policy• Grievance procedures• Union services (education & training)

Workplace Issues

Job securityWages & benefits

OpportunityCompetition

Health & SafetyFair treatmentDiscrimination

Favoritism

Role of Unions

• In U.S., most workers act as individuals to select jobs that are acceptable to them and to negotiate pay, benefits, flexible hours, and other work conditions.

• At times, workers have believed their needs and interests do not receive enough consideration from management.

• One response by workers is to act collectively by forming and joining labor unions.

History of Organized Labor

• Europe - 16th – 18th Century – Guilds of artisans & craftsmen

• U.S = 1850’sStone masonsSilversmithsCigar makersHat fittersRailroad workers

Notable Labor Organizations

1886 – American Federation of Labor (autonomous trade unionswith central administration)1891 – International Brotherhood of Electrical Workers (IBEW)1892 – International Longshoreman’s Association (ILA)1903 – International Brotherhood of Teamsters (IBT)1905 – Industrial Workers of the World (IWW)1915 – Brotherhood of Sleeping Car Porters (BSCP)1931 – United Auto Workers (UAW)

Service Employees International Union - SEIU

• 1921 (as the Building Services Employees Union)• HQ = Washington, DC• 2.1 million members• USA – Puerto Rico – Canada• Three key service industries

Healthcare – Property Services – Public Services• 56% women• 40% people of color

James Bond Is A Government Employee

Reasons for Organized Labor

• Dictator-like company owners

• Unfair and dangerous labor practices

• The Jungle – Upton Sinclair (1906)

• Representation on work issues

Historical & Current Challenges to Organized Labor

• Economic downturns - recessions, depressions, panics• Aggressive anti-union activities by smarter management• Government legislation & take over of labor issues• Wars (W.W.I - W.W.II - Korea) • Globalism• Information Technology • Reduction in union power• Changing economic and political realities• Individualism (USA) vs. collectivism (China)

Common InterestsBetween Unions & Management

• Strong business performance• Growing the business• Job or career opportunities for employees• Profits for the company• Improved safety – impacts reputation and W.C. rates

• Employment stability – impacts unemployment rates

• Others???

Representative Friction Between Union & Company Interests

• Higher pay for employees = higher costs for company

• Higher benefits = increased costs for company

• Higher costs for company = erosion of market share & competitive pricing opportunities

• Job security = lack of flexibility to take advantage of market opportunities

Competing Financial Points of View

How Best To Share the Profits

Unions TMTJob security Profit factorsBetter pay PPE investmentBetter benefits Shareholder value / dividendsImproved working conditions AcquisitionsIncreased hiring Cost of laborFair work rules RegulationPolitics Technology

Intense competitionPension improvementsFlexibilityGrowth opportunitiesPolitics

Unions and Labor Relations

• Unions – organizations formed for the purpose of representing their members’ interests in dealing with employers.

• Labor relations – field that emphasizes skills managers and union leaders can use to minimize costly forms of conflict (such as strikes) and seek win-win solutions to disagreements.

PHILOSOPHICAL BONDS FOR UNIONSA core set of values• Solidarity (We’re all in this together)• The sense that each should look out for the interests of

all• Commitments to mutual assistance• Commitment to a rough-and-ready sense of equality• Commitment to a disdain for elitism• Commitment to a belief that democracy and individual

rights did not stop at the plant gate or the office reception room.

SOME REASONS FOR DECLINE IN NON-PUBLIC SECTOR UNIONS

• Younger generation does not want to be confined by a labor contract – too restrictive for career development;

• Better grievance results through court system

• Global competition

• Uneven playing field

• American labor relations vs. other countries

LABOR RELATIONS CONCEPTS

Checkoff Provision – Employer automatically deducts union duesfrom employee paychecks;

Closed Shop – A person must be a union member before beinghired;

Union Shop – Requires an employee to join the union within acertain amount of time (30 days) after beginning employment;

Agency Shop – Requires the payment of union dues, but not unionMembership;

LOCAL UNIONS

• Chapters of national or international unions• Negotiate work rules and locally determines issues• Responsible for contract enforcement• Provide guidance on national union issues

• UNION STEWARD – An employee elected by union members to represent them in ensuring that the terms of the contract are enforced.

• Any perceived grievance should go first to the Union Steward

UNION DUES

Amount of money paid by employee from his/herpaycheck fore union membership benefits

Representative annual dues:UAW = 1.15% hourly rate per monthFord = $693.12GM = $932.50SEIU = 1.85% hourly rate/month. Cap $65/monthTeamsters = 2.5 times your hourly rate per monthNational average = $400 per year ($33.33/month)

What Do You Get For Your Union Dues

• Contract negotiation• Power in numbers• Benefits• Strike fund• Legislative power• Social community• Brotherhood• An element of control over your work environment

3 Facets of Labor Relations Decisions:

1. Labor relations strategy

2. Negotiating contracts

3. Administering contracts

Figure 14.1: 10 Largest Unions in U.S.

National and International Unions

Most Union members belong to a national or international union that may be:

Craft unions (guilds): members all have a particular skill or occupation, e.g. carpenters, electricians, plumbers, etc.

Industrial unions: members are linked by their work in a particular industry, e.g. auto manufacturers, aviation, construction, etc.

Most national unions are affiliated with the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO).

Decline in union membership due to:

Change in the structure of the economy

Management efforts to control costs

Smarter & more enlightened HRM practices

Government regulation

Impact of Unions on Company Performance

•Harley-Davidson and the International Association of Machinists and Aerospace Workers have cooperated to produce good results.

•Companies wishing to become more competitive need to continually monitor their labor relations strategies.

Management Goals

• To increase organization’s profits, market share, sustainability.

• Prefer options that lower costs, raise output and keep organization’s operations flexible.

• When an employer has recognized a union, management’s goals continue to emphasize restraining costs and improving output.

• With labor unions, managers prefer to limit increases in wages and benefits, and retain as much control as they can over work rules and schedules (a.k.a. Flexibility)

Labor Unions Goals

• Obtain pay and working conditions that satisfy and give members a voice in decisions that affect them.

• Unions achieve results by gaining power in numbers.

• Unions want to influence the way pay and promotions are determined.

Goals of Labor Unions

• Survival and security of a union depend on its ability to ensure a regular flow of new members and member dues to support the services it provides.

• Unions place high priority on negotiating two types of contract provisions that are critical to a union’s security and viability:

Check-off provisionsUnion membership or contribution provisions

Societal goals

• Activities of unions and management take place within the context of society;

• Society’s values drive laws and regulations that affect labor unions.

• Society’s goal for unions is to ensure that workers have a voice in how they are treated by their employers.

Laws Affecting Labor Relations

National Labor Relations Act (NLRA) of 1935

Taft-Hartley Act of 1947

Landrum-Griffin Act of 1959

National Labor Relations Act - 1935

Guarantees basic rights of private sector employees to: 1. Organize into trade unions2. Engage in collective bargaining for better terms and conditions

at work3. Take collective action including strike if necessary to redress

grievances4. Created the National Labor Relations Board which

conducts elections which, if voted in favor of representation, awards labor unions with a requirement for the employer to engage in collective bargaining – in good faith - with this union

Labor Management Relations Act – 1947a.k.a. Taft-Hartley Act

An amendment to the NLRAEstablishes ‘right-to-work’ lawsRestricts the power and activities of labor unionsProhibits unfair labor practices, e.g.

Wildcat strikesSolidarity or political strikesSecondary and mass picketingClosed shopsRestricts union shops (i.e. hiring only union members)

Labor Management Reporting and Disclosure Act – 1959 a.k.a. Landrum-Griffin Act

Regulates labor unions' internal affairs and their officials' relationshipswith employers.• Unions had to hold secret elections, reviewable by the DOL;• Union members are protected against abuses by a bill of rights that

includes guarantees of freedom of speech and periodic secret elections of officers;

• Require unions to submit annual financial reports to the DOL;• Declare that every union officer must act as a fiduciary in handling

the assets and conducting the affairs of the union;• Limit the power of unions to put subordinate bodies in trusteeship, a

temporary suspension of democratic processes within a union.• Provide certain minimum standards before a union may expel or

take other disciplinary action against a member of the union.

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).

ULP charges are filed at and investigated by the regional offices.

14-36

Other Laws Affecting Labor Relations

Right-to-work laws:

state laws that make union shops, maintenance of membership, and agency shops illegal.

National Labor Relations Board (NLRB): Federal government agency that enforces the NLRA by conducting and certifying representation elections and investigating unfair labor practices.

Right To Work laws

Taft-Hartley Act allows states to pass ‘Right To Work’ laws which:• Prohibits union security agreements, or

agreements between labor unions and employers;

• Govern the extent to which an established union can require employees' membership, payment of union dues, or fees as a condition of employment, either before or after hiring

Figure 14.4:States with Right-to-Work Laws

SOURCE: National Right to Work Legal Defense Foundation, “Right to Work States,” www.nrtw.org , accessed May 3, 2012.