Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 12-1 Human Resource Management 11 th Edition Chapter 12 LABOR UNIONS & COLLECTIVE BARGAINING

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 12-2 HRM in Action: Change to Win Coalition Union federation consisting of 7 unions that broke from AFL-CIO and formally launched rival labor federation representing about 6 million workers in 2005 Led by Service Employees International Union Also included are Teamsters, United Food and Commercial Workers, Unite Here, Carpenters’ Union, Laborers’ International Union of North America, and United Farm Workers

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 12-3 Union Objectives To secure and, if possible, improve living standards and economic status of members To enhance and, if possible, guarantee individual security against threats and contingencies that might result from market fluctuations, technological change, or management decisions To influence power relations in social system in ways that favor and do not threaten union gains and goals.

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 12-4 Union Objectives (Cont.) To advance welfare of all who work for a living, whether union members or not To create mechanisms to guard against use of arbitrary and capricious policies and practices in workplace

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 12-5 Union Growth Strategies Strategically Located Union Members Organizing Several Big Companies at Once Pulling Union Through Political Involvement Union Salting Flooding Community Public Awareness Campaigns Building Organizing Funds Organizing through Card Check

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 12-6 Strategically Located Union Members Importance of jobs held by union members significantly affects union power Few strategically located union members may exert disproportionate amount of power Truckers or dock workers can affect entire country

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 12-7 Organizing Several Big Companies at Once Service Employees International Union (SEIU) in Houston organized janitors at several big companies at one time Negotiated big industry-wide contract Eliminates each company’s fear of being undercut by competitors if it allows higher wages Companies stay neutral

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 12-8 Pulling the Union Through Put pressure on end user of company’s product Strike against four Johnson Controls factories that make interior parts for some of country’s best-selling vehicles GM and Chrysler played active behind-the-scenes role by pressuring JCI to settle dispute

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 12-9 Political Involvement Political arm of AFL-CIO is Committee on Political Education (COPE) Union recommends and assists candidates who will best serve its interests With friends in government, union in stronger position Give money to candidates who pledge to help pass pro-labor legislation

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Union Salting Process of training union organizers to apply for jobs at company and, once hired, work to unionize Supreme Court has ruled employers cannot discriminate against union salts

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Flooding the Community Process of union inundating communities with organizers to target particular business Unions typically choose companies in which nonunionized employees have asked for help in organizing Target weak managers’ departments as way to appeal to dissatisfied employees

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Public Awareness Campaigns Maneuvers that do not coincide with strike or organizing campaign to pressure employer for better wages, benefits, etc. Alternative to strikes because more employers are willing to replace striking workers Employers have less recourse against labor campaigns involving joint political and community groups that support union goals

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Building Organizing Funds AFL-CIO asks its affiliates to increase organizing funds Increase funding to organizing institute, which trains organizers, and launches advertising campaign to create wider public support for unions

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Organizing through Card Check Organizing approach where employees sign card of support if they want unionization If 50% of workforce plus one worker sign card, union considers it a victory Expedited ways of polling workers on union representation but no secret-ballot election takes place Employee Free Choice Act has been introduced in Congress

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Why Employees Join Unions Dissatisfaction with management Social outlet Opportunity for leadership Forced unionization Peer pressure

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Dissatisfaction with Management Compensation Job Security Management Attitude

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Social Outlet Many people have strong social needs Take advantage of union-sponsored recreational and social activities that members and their families find fulfilling People who develop close personal relationships will likely stand together in difficult times

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Opportunity for Leadership Some individuals aspire to leadership roles Employees with leadership aspirations can often satisfy those aspirations through union membership Union also has hierarchy of leadership that begins with union steward

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Forced Unionization In 28 states without right-to-work laws, legal for employer to agree with union that new employee must join union after certain period of time (generally 30 days) or be terminated Referred to as union shop agreement

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Right-to-Work Laws Prohibit management and unions from entering into agreements requiring union membership as condition of employment State statutes or constitutional provisions that ban practice of requiring union membership or financial support as condition of employment 22 states, located primarily in South and West, have adopted such laws

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Peer Pressure Some will join union because they are urged to do so by other workers May constantly remind employee that he or she is not a member of union In extreme cases, union members have threatened nonmembers with physical violence and sometimes have carried out these threats

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Union Structure Local union National (or international) union American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) Change to Win Coalition

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Local Union Basic element in structure of American labor movement Deals with employer on day-to-day basis

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Craft and Industrial Unions Craft union - Such as Carpenters and Joiners, typically composed of members of particular trade or skill in specific locality Industrial union - Consists of all workers in particular plant or group of plants (example, United Auto Workers)

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall National Union Composed of local unions, which it charters Local union, not individual worker, holds membership in national union Service Employees International Union is largest and fastest growing national union (2 million members) International Brotherhood of Teamsters has about 1.4 million members

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) Represents labor interests at highest level Does not engage in collective bargaining Financed by member national unions Has little formal power or control Central trade union federation in U.S.

The Structure of the AFL-CIO Convention Meets biennially Executive Council President, Secretary-Treasurer, and 33 Vice Presidents Meets at least three times a year General Board Executive Council members and principal officer of each international union affiliate Meets on call of Federation President or Executive Council Executive Officers President and Secretary-Treasurer National Headquarters Standing Committees Staff Departments Department or Organization and Field Services Regional Directors Trade and Industrial Departments Building, Food, Metal, and Maritime Trades, Industrial Union, Public and Railway Employees, Union Label Local Dept. Councils Affiliated National and International Unions Affiliated State Bodies Local Bodies Local unions affiliated directly with AFL-CIO Local Unions of National and International Unions 12-27

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Remember the Change to Win Coalition Union federation consisting of 7 unions that broke from AFL-CIO and formally launched rival labor federation representing about 6 million workers in 2005 Led by Service Employees International Union Also included are Teamsters, United Food and Commercial Workers, Unite Here, Carpenters’ Union, Laborers’ International Union of North America, and United Farm Workers

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Collective Bargaining Defined Performance of mutual obligation of employer and employees’ representative to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment, or the negotiation of agreement, or any question arising there under, and execution of written contract incorporating any agreement reached if requested by either party, but such obligation does not compel either party to agree to proposal or require making of concession.

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Bargaining Unit Consists of employees (not necessarily union members) recognized by employer or certified by administrative agency as appropriate for representation by labor organization for purposes of collective bargaining

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Steps for Forming a Bargaining Unit External Environment Internal Environment Signing of Authorization Cards Petition for Election Election Campaign Election and Certification

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Signing Authorization Cards Document indicating employee wants to be represented by labor organization in collective bargaining Is there sufficient interest on part of employees to justify unit? Evidence of interest when at least 30% of employees sign authorization cards Usually need 50% to proceed

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Petition for Election After authorization cards signed, petition for election made to regional NLRB office NLRB will ordinarily direct that election be held within 30 days

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Election Campaign Both union and management usually promote causes actively Cannot threaten loss of jobs or benefits Cannot misstate important facts Illegal to incite racial or religious prejudice

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Election and Certification NLRB monitors secret-ballot election Board issues certification of results to participants If majority of employees vote for union, NLRB will certify

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Trends & Innovations: The Two- Tier Wage System Returns Wage structure where newly hired workers are paid less than current employees for performing same or similar jobs In 2007, UAW and General Motors negotiated contract which included provisions for two-tier wage system Goodyear’s recent contract with United Steelworkers, covering 16 U.S. and Canadian sites, has two-tier structure

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Collective Bargaining Fundamental to management-organized labor relations in United States Process does not require either party to make concessions; only compels them to bargain in good faith

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Forms of Bargaining Structures One company dealing with single union Several companies dealing with single union Several unions dealing with single company Several companies dealing with several unions

Collective Bargaining Process Preparing for Negotiation Bargaining Issues Negotiation Reaching the Agreement Negotiation Breakdowns? Ratifying the Agreement Administration of the Agreement Overcoming Breakdowns EXTERNAL ENVIRONMENT INTERNAL ENVIRONMENT Yes No 12-39

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Psychological Aspects of Collective Bargaining Difficult because process is adversarial situation and must be dealt with as such Psychological aspects vitally important

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Bargaining Issues Mandatory bargaining issues - Wages, hours, etc. Permissive bargaining issues - May be raised but neither side may insist that they be bargained over Prohibited bargaining issues - Statutorily outlawed

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Bargaining Issues Document that results from collective bargaining process is labor agreement or contract Recognition Management Rights Union Security Compensation and Benefits Grievance Procedure Employee Security

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Recognition Appears at beginning of labor agreement Identifies union that is recognized as bargaining representative Describes bargaining unit

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Management Rights Section that is often (but not always) written into labor agreement which spells out rights of management

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Union Security Closed Shop - Arrangement whereby union membership is prerequisite to employment Union Shop - Requires all employees become members of union after specified period Maintenance of Membership - Must continue membership until termination of agreement

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Union Security (Cont.) Agency Shop - Nonunion members pay union equivalent of membership dues as kind of tax Exclusive Bargaining Shop - Company must deal with union that has achieved recognition, but employees not obligated to join Open Shop - Equal terms for union members and nonmembers Dues Checkoff - Company agrees to withhold union dues

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Compensation and Benefits Wage rate schedule Overtime and premium pay Jury pay Layoff or severance pay Holidays Vacation Family care

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Grievance Procedure Means by which employees can voice dissatisfaction with specific management actions Procedures for disciplinary action by management Termination procedure that must be followed

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Employee Security Seniority - Length of time employee has been associated with company, division, department, or job

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Job-Related Factors Many of rules governing employee actions on job are included

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Negotiating the Agreement Begins with each side presenting initial demands Suggests certain amount of give and take Each side does not expect to obtain all demands presented

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Example of Negotiating Wage Increase LABOR Additional Cents per Hour Demanded MANAGEMENT Additional Cents per Hour Offered Bargaining Zone Labor’s Plan A Labor’s Plan B Labor’s Final Offer (before strike) Management’s Final Offer (before plant lockout) Management’s Plan B Management’s Plan A

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Breakdowns in Negotiations Third-party intervention Union strategies for overcoming breakdowns Management strategies for overcoming breakdowns

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Third-Party Intervention Mediation - Neutral party comes in when impasse has occurred Arbitration - Impartial third party makes binding decision to settle dispute Sources of mediators and arbitrators - FMCS and AAA

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Types of Arbitration Rights arbitration - Disputes over interpretation and application of various provisions of existing contract Interest arbitration - Disputes over terms of proposed collective bargaining agreements (Rarely used in private sector )

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Union Strategies for Overcoming Negotiation Breakdowns - Strikes Strikes - union members refuse to work to pressure management in negotiations Halts production, resulting in lost customers and revenue Fewer strikes today Timing is important Unions prefer to strike only as last resort

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Virtual Strikes Proposed as means to avoid hurting others When labor calls strike, more than labor and management are hurt In virtual strike only labor and management suffers Worker wages, management salaries, and company profits go into separate account

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Union Strategies for Overcoming Negotiation Breakdowns - Boycotts Union members agree to refuse to use or buy firm’s products Effect often lasts much longer than strike Shoppers change buying habits Example - Coors Secondary Boycott - Union practice to encourage third parties to stop doing business with company Illegal

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Management Strategies for Overcoming Negotiation Breakdowns - Lockout Lockout - Keep employees out; operate by placing management and nonunion workers in striking workers’ jobs Effective when management dealing with weak union, when union treasury is depleted, or when business has excessive inventories Type of industry involved has considerable effect on impact of this maneuver

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Management Strategies for Overcoming Negotiations Breakdowns – Continue Operations Without Striking Workers Operate firm by placing management and nonunion workers in striking workers’ jobs Type of industry involved At petroleum refinery or chemical plant, this practice may be quite effective

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Ratifying the Agreement May be more difficult for union Until approved by majority of union members, proposed agreement is not final Approval process for management is easier

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Administration of the Agreement Larger and perhaps more important part of collective bargaining Seldom viewed by public Agreement establishes union- management relationship for duration of contract

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Collective Bargaining for Federal Employees Executive Order established basic framework for collective bargaining in federal government agencies. Did not allow bargaining over wage issues

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Union Decertification Essentially reverse of process that employees must follow to be recognized as official bargaining unit Employees have used decertification petitions with increasing frequency and success

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Decertification Procedure Rules established by NLRB At least 30% must petition for election Petition submitted days prior to expiration of current contract Schedule decertification election If majority of votes against union, employees will be union free

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Management and Decertification If management wants union decertified, must be active rather than passive Effective first-line supervisors Effective communication Trust and openness Effective compensation programs Effective employee and labor relations

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Unions Today Fall of Big Labor has been dramatic Unionized share of private sector workforce was 7.5% in 2007

Percentage of the Private Workforce That is Unionized Year Percentage of Workforce

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall A Global Perspective: The ICFTU Says Union Organizing Can Be Dangerous Thousands of trade unionists have been arrested, jailed, tortured, fired, intimidated, and murdered or disappeared, across the world

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