Human Resource Management 10th Edition Chapter 12 LABOR UNIONS & COLLECTIVE BARGAINING © 2008 by Prentice Hall

HRM in Action: Change to Win Coalition New union federation consisting of seven 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 © 2008 by Prentice Hall

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 favors and does not threaten union gains and goals. © 2008 by Prentice Hall

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. © 2008 by Prentice Hall

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 Befriending Laid-off Workers Organizing through Card Check © 2008 by Prentice Hall

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 © 2008 by Prentice Hall

Organizing Several Big Companies at Once Service Employees International Union (SEIU) in Houston organized janitors at several big companies at once Negotiated big industry-wide contract Eliminates each company’s fear of being undercut by competitors if it allows higher wages Companies stay neutral © 2008 by Prentice Hall

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 © 2008 by Prentice Hall

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 © 2008 by 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 © 2008 by 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 © 2008 by Prentice Hall

Public Awareness Campaigns Labor maneuvers that do not coincide with strike or organizing campaign to pressure employer for better wages, benefits, and the like 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 © 2008 by 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 © 2008 by Prentice Hall

Befriending Laid-Off Workers AFL-CIO hopes castoffs from Enron, WorldCom, and others will become advocates for organizing Fear and stress break down relationships between management and workers © 2008 by Prentice Hall

Organizing through Card Check Organizing approach where employees sign card of support if they want unionization If 50% of work force plus one worker sign card, it is considered a union victory Expedited ways of polling workers on union representation but no secret-ballot election takes place © 2008 by Prentice Hall

Why Employees Join Unions Dissatisfaction with management Social outlet Opportunity for leadership Forced unionization Peer pressure © 2008 by Prentice Hall

Dissatisfaction with Management Compensation Job Security Management Attitude © 2008 by 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 © 2008 by 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 a hierarchy of leadership that begins with the union steward © 2008 by 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 © 2008 by 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 © 2008 by Prentice Hall

Peer Pressure Some will join a union because they are urged to do so by other members of the workgroup May constantly remind an employee that he or she is not a member of the union In extreme cases, union members have threatened nonmembers with physical violence and sometimes have carried out these threats © 2008 by 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 © 2008 by Prentice Hall

Local Union Basic element in structure of American labor movement Deals with employer on day-to-day basis © 2008 by Prentice Hall

Craft and Industrial Unions Craft union - Such as Carpenters and Joiners, is 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) © 2008 by 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 (1.8 million members) International Brotherhood of Teamsters has about 1.4 million members © 2008 by 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. © 2008 by Prentice Hall

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 Department or Organization and Field Services National Headquarters Standing Committees Staff Departments Regional Directors Trade and Industrial Departments Building, Food, Metal, and Maritime Trades, Industrial Union, Public and Railway Employees, Union Label Affiliated National and International Unions Affiliated State Bodies Local Unions of National and International Unions Local Bodies Local unions affiliated directly with AFL-CIO © 2008 by Prentice Hall Local Dept. Councils

Remember the Change to Win Coalition New union federation consisting of seven 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 © 2008 by Prentice Hall

Collective Bargaining Defined Performance of mutual obligation of employer and representative of employees 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 an 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 a concession. © 2008 by 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 © 2008 by Prentice Hall

Steps for Forming a Bargaining Unit External Environment Internal Environment Signing of Authorization Cards Petition for Election Election Campaign Election and Certification © 2008 by 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 in workgroup sign authorization cards Usually need 50% to proceed © 2008 by Prentice Hall

Petition for Election After authorization cards have been signed, petition for election made to regional NLRB office NLRB will ordinarily direct that election be held within 30 days © 2008 by 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 © 2008 by 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 © 2008 by 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 © 2008 by Prentice Hall

Forms of Bargaining Structures One company dealing with a single union Several companies dealing with single union Several unions dealing with single company Several companies dealing with several unions © 2008 by Prentice Hall

Collective Bargaining Process EXTERNAL ENVIRONMENT INTERNAL ENVIRONMENT Preparing for Negotiation Bargaining Issues Preparing for Negotiation Yes Negotiation Breakdowns? Overcoming Breakdowns No Reaching the Agreement Ratifying the Agreement Administration of the Agreement © 2008 by Prentice Hall

Psychological Aspects of Collective Bargaining Difficult because process is adversarial situation and must be dealt with as such Psychological aspects vitally important © 2008 by 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 © 2008 by Prentice Hall

Compensation and Benefits 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 © 2008 by Prentice Hall

Recognition Appears at beginning of labor agreement Identifies union that is recognized as bargaining representative Describes bargaining unit © 2008 by Prentice Hall

Management Rights Section that is often (but not always) written into labor agreement which spells out rights of management © 2008 by 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 memberships until termination of agreement © 2008 by 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 © 2008 by Prentice Hall

Compensation and Benefits Wage rate schedule Overtime and premium pay Jury pay Layoff or severance pay Holidays Vacation Family care © 2008 by 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 © 2008 by Prentice Hall

Employee Security Seniority - Length of time employee has been associated with company, division, department, or job © 2008 by Prentice Hall

Job-Related Factors Many of rules governing employee actions on job are included © 2008 by 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 © 2008 by Prentice Hall

Example of Negotiating Wage Increase 10 15 20 25 30 35 40 LABOR Additional Cents per Hour Demanded Bargaining Zone Labor’s Final Offer (before strike) Labor’s Plan B Labor’s Plan A 10 15 20 25 30 35 40 MANAGEMENT Additional Cents per Hour Offered Bargaining Zone Management’s Plan A Management’s Plan B Management’s Final Offer (before plant lockout) © 2008 by Prentice Hall

Breakdowns in Negotiations Third party intervention Union strategies for overcoming breakdowns Management strategies for overcoming breakdowns © 2008 by 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 © 2008 by 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) © 2008 by 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 © 2008 by Prentice Hall

Trends & Innovations: Virtual Strikes Proposed as means to avoid hurting others When labor calls a strike then 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 © 2008 by 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 © 2008 by Prentice Hall

Other Union Tactics Byline strike - Newspaper writers withhold their names from stories Informational picketing - Union members display placards and hand out leaflets, usually outside their place of business, depicting information union wants general public to see © 2008 by 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 © 2008 by 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 © 2008 by 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 © 2008 by 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 © 2008 by Prentice Hall

Collective Bargaining for Federal Employees Executive Order 10988 established basic framework for collective bargaining in federal government agencies. Did not allow bargaining over wage issues © 2008 by 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 © 2008 by Prentice Hall

Decertification Procedure Rules established by NLRB At least 30% must petition for election Petition submitted 60-90 days prior to expiration of current contract Schedule decertification election If majority of votes against union, employees will be union free © 2008 by 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 © 2008 by Prentice Hall

Unions Today Fall of Big Labor has been dramatic Unionized share of private sector workforce is 7.8 percent in 2005 © 2008 by Prentice Hall

Percentage of the Private Workforce That is Unionized Percentage of Workforce 40 40 30 30 20 20 10 10 8 1980 1950 1955 1960 1965 1970 1975 1985 1994 2002 2005 © 2008 by Prentice Hall Year

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 © 2008 by Prentice Hall