Labor Relations OS652 HRM Fisher November 4, 2004

2 Agenda Finish benefits discussion Some background on labor-management relations – Right to work laws – Variability in union contracts

3 Who is covered by employee benefits? Traditionally, employee, spouse, and children – Married couples with kids now only 25% of households in the US Part-time employees often not covered – Ikea, Wegman ’ s cover part time employees more broadly; report lower turnover Domestic partner benefits – Opposite sex – Same sex Extended family benefits

4 Flexible vs. Fixed Benefits Programs Flexible (Cafeteria) Employees select the benefits they want. May be less costly. Supports corporate diversity strategy. Increased fairness perceptions. But, administratively complex. Fixed All employees receive the same benefits. Simple administration. But, one-size-fits-all approach may not meet employees ’ needs.

5 Unions: History and Current Status Started in late 1700s in US (printers, carpenters, etc.) Purpose was to protect worker rights (pay, working hours) Declining membership – In 1945, 35.5% of workforce was unionized (high point) – Currently 13.5% of the workforce (Bureau of Labor Statistics, January 2002) – Decrease in union membership attributed to increase in service sector, high tech jobs

6 Potential Benefits of Unions For employees – Higher wages – Better benefits – Increased job security – Subcontracting/outsourcing limitations – Better quality of work life (work environment, grievance procedures, etc.) For employers – Clearly defined work rules – Potential for wage concessions – Cooperation in joint workplace efforts

7 Laws Governing Labor-Management Relations Railway Labor Act – 1926 National Labor Relations Act (Wagner Act) – 1935 Labor Management Relations Act (Taft- Hartley) Landrum-Griffin Act

8 Right to Work Can you work in a union shop without joining the union? – Employment at will addresses real or implied contracts with individual employees and grounds for dismissal – Employees who choose not to join the union are still protected by the collective bargaining agreement 22 states have right to work laws New York is not one of them – More common in southern states with traditionally less union presence (and avg. incomes are lower in right to work states)

9 A different kind of union- management relationship Saturn ’ s collaborative relationship – Increased quality – Productivity – Employee and customer satisfaction – Returned to standard contract in 1999 Similar strategy used at NUMMI (joint venture between GM and Toyota)

10 GM Massena Unique union contract motivated by competitive environment (or fear, depending on your perspective) Local living agreement – Ongoing problem solving process – Provisions of the contract (at the local level) may be changed at any time if there is mutual agreement

11 Airlines and unions Airlines were deregulated in 1978, making cost an issue for the first time Labor contracts have kept costs high for the majors – Mergers resulted in broader use of more expensive practices – Threat of strikes (and slowdowns) was very real Now seeing some union concessions Source: Carey, S. and McCartney, S. (Oct ). How airlines resisted change for 25 years and finally lost. Wall Street Journal.

12 For next class Labor-management relations, part 2 – In class case study, discussion Presentation