1. Copyright © 2014 Pearson Education Chapter 12 Labor Unions & Collective Bargaining 12-1 Copyright © 2014 Pearson Education University of Bahrain College of Business Administration MGT 430 Human Resource Management Global Edition

2. Copyright © 2014 Pearson Education Learning Objectives Describe project labor agreements and explain why employees join unions. Describe organized labor’s strategies for a stronger movement and explain the basic structure of a union. Discuss laws affecting collective bargaining, including revisiting the NLRB and pay secrecy, and identify the steps that lead to establishing the collective bargaining relationship. Describe the collective bargaining process and explain collective bargaining issues. Describe preparation for negotiations, negotiating the agreement, the two-tier wage system, and breakdowns in negotiations. 12-2

3. Copyright © 2014 Pearson Education Learning Objectives (Cont.) Describe what is involved in reaching, ratifying, and administering the labor/management agreement. Describe the grievance procedure in a union environment. Explain recent labor-management legal trends and describe collective bargaining in the public sector. Explain union decertification. Describe the state of unions today and discuss labor unrest in China. 12-3

4. Copyright © 2014 Pearson Education HRM in Action: Project Labor Agreements Project labor agreement: Pre-hire collective bargaining agreement between construction firm owners and one or more labor organizations establishing terms and conditions of employment for specific construction project President Obama’s signed EO 13502 into law in 2009 which encourages use of PLAs 12-4

5. Copyright © 2014 Pearson Education Why Employees Join Unions Dissatisfaction with management Social outlet Opportunity for leadership Forced unionization Peer pressure 12-5

6. Copyright © 2014 Pearson Education Dissatisfaction With Management Compensation Job security Management attitude 12-6

7. Copyright © 2014 Pearson Education Social Outlet Many people have strong social needs Unions sponsor recreational and social activities People who develop close personal relationships will likely stand together in difficult times 12-7

8. Copyright © 2014 Pearson Education Opportunity for Leadership Some individuals aspire to leadership roles Can often satisfy those aspirations through union membership Union also has hierarchy of leadership Begins with union steward 12-8

9. Copyright © 2014 Pearson Education Forced Unionization In 27 states without right-to-work laws, it is legal for employer to agree with union that new employee must join union after certain period of time (generally 30 days) or be terminated Called a union shop agreement 12-9

10. Copyright © 2014 Pearson Education Right-to-Work Laws Prohibit management and unions from entering into agreements requiring union membership as condition of employment Bans practice of requiring union membership or financial support as condition of employment 23 states have adopted such laws 12-10

11. Copyright © 2014 Pearson Education Peer Pressure Some join a union because they are urged to do so by other workers Peers 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 have sometimes carried out these threats 12-11

12. Copyright © 2014 Pearson Education Union Growth Strategies Strategically located union members Pulling union through Political involvement Union salting Flooding community Public awareness campaigns Building organizing funds Partnering with high schools Organizing through the card check 12-12

13. Copyright © 2014 Pearson Education 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 12-13

14. Copyright © 2014 Pearson Education 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 12-14

15. Copyright © 2014 Pearson Education Political Involvement Political arm of AFL-CIO is Committee on Political Education (COPE) Recommends and assists candidates who will best serve its interests With friends in government, union in stronger position Unions give money to candidates who pledge to help pass pro-labor legislation 12-15

16. Copyright © 2014 Pearson Education Union Salting Process of training union organizers to apply for jobs at company Once hired, work to unionize Supreme Court has ruled employers cannot discriminate against union salts 12-16

17. Copyright © 2014 Pearson Education Flooding the Community Union inundates 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 12-17

18. Copyright © 2014 Pearson Education Public Awareness Campaigns Maneuvers that do not coincide with strike or organizing campaign to pressure employer Alternative to strikes because more employers are willing to replace striking workers Employers have less recourse 12-18

19. Copyright © 2014 Pearson Education Building Organizing Funds AFL-CIO asks affiliates to increase organizing funds May increase funding to organizing institute, which trains organizers Launches advertising campaign to create wider public support 12-19

20. Copyright © 2014 Pearson Education Partnering with High Schools Some high schools are partnering with labor unions to prepare students for a career Students are going from learning situation to learning situation Creates a fast-track educational experience 12-20

21. Copyright © 2014 Pearson Education Organizing Younger Workers Major strategy now being pursued by union organizers In the past, younger organizers were sometimes considered second-class citizens 12-21

22. Copyright © 2014 Pearson Education Organizing Through Card Check Employees sign non-secret card of support if they want unionization If 50% of workforce plus one worker signs a card, union is formed Expedited ways of polling workers on union representation No secret-ballot election takes place Organizations decide to remain neutral 12-22

23. Copyright © 2014 Pearson Education Union Structure Local union National (or international) union American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) Change to Win Coalition 12-23

24. Copyright © 2014 Pearson Education Local Union Basic element in structure of American labor movement Deals with employer on day-to-day basis 12-24

25. Copyright © 2014 Pearson Education Craft and Industrial Unions Craft union: Typically composed of members of particular trade or skill in specific locality (i.e., Carpenters and Joiners) Industrial union: Consists of all workers in particular plant or group of plants (i.e., United Auto Workers) 12-25

26. Copyright © 2014 Pearson Education National Union Composed of local unions, which it charters Local union, not individual worker, holds membership in national union Service Employees International Union (SEIU) is largest and fastest-growing national union (2.1 million members) International Brotherhood of Teamsters has about 1.4 million members 12-26

27. Copyright © 2014 Pearson Education 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. 12-27

28. Copyright © 2014 Pearson Education Change to Win Coalition Union federation consisting of 7 unions that broke from AFL-CIO Formally launched rival labor federation representing about 6 million workers in 2005 Led by Service Employees International Union Primary targets for organizing: Industries in cleaning, health care, hotels and restaurants, retailing, and transportation 12-28

29. Copyright © 2014 Pearson Education Laws Affecting Collective Bargaining—National Labor Relations Act Also called Wagner Act of 1935 Declared legislative support, on broad scale, for right of employees to organize and engage in collective bargaining Detailed and prohibited 5 management practices deemed to be unfair to labor 12-29

30. Copyright © 2014 Pearson Education Laws Affecting Collective Bargaining—Labor Management Relations Act Also called Taft–Hartley Act of 1947 Revised National Labor Relations Act Pendulum had begun to swing toward more balanced position between labor and management Extended concept of unfair labor practices to unions 12-30

31. Copyright © 2014 Pearson Education Revisiting The National Labor Relations Board (NLRB) NLRB has recently been thrust into forefront stemming from pattern of controversial decisions Some believe that the Board is promoting interests and political agenda of labor unions 12-31

32. Copyright © 2014 Pearson Education Pay Secrecy Employers may violate National Labor Relations Act if they issue verbal or written statements to discourage or prohibit nonsupervisory employees from discussing their pay NLRB protects pay dialogues among coworkers as well as conversations about benefits and working conditions 12-32

33. Copyright © 2014 Pearson Education Collective Bargaining Defined The performance of the mutual obligation of the employer and the representative of the 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 thereunder, and the execution of a written contract incorporating any agreement reached if requested by either party, but such obligation does not compel either party to agree to a proposal or require the making of a concession. 12-33

34. Copyright © 2014 Pearson Education Bargaining Unit Consists of employees recognized by employer or certified by administrative agency as appropriate for representation by labor organization for purposes of collective bargaining 12-34

35. Copyright © 2014 Pearson Education Steps for Forming a Bargaining Unit External Environment Internal Environment Signing of Authorization Cards Petition for Election Election Campaign Election and Certification 12-35

36. Copyright © 2014 Pearson Education Signing Authorization Cards Document indicating employee wants to be represented by labor organization in collective bargaining Determines if there is 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 12-36

37. Copyright © 2014 Pearson Education 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 12-37

38. Copyright © 2014 Pearson Education 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 12-38

39. Copyright © 2014 Pearson Education 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 12-39

40. Copyright © 2014 Pearson Education Collective Bargaining Fundamental to management– organized labor relations in United States Most union/management agreements in United States are for 3-year period 12-40

41. Copyright © 2014 Pearson Education Collective Bargaining Process 12-41 Bargaining Issues Preparing for Negotiation Negotiating the Agreement Reaching the Agreement Negotiation Breakdowns? Ratifying the Agreement Administration of the Agreement Overcoming Breakdowns EXTERNAL ENVIRONMENT INTERNAL ENVIRONMENT Yes No

42. Copyright © 2014 Pearson Education Bargaining Issues Document that results from collective bargaining process is a labor agreement or contract. Recognition Management rights Union security Compensation and benefits Grievance procedure Employee security 12-42

43. Copyright © 2014 Pearson Education Categories of 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 12-43

44. Copyright © 2014 Pearson Education Recognition Appears at beginning of labor agreement Identifies union that is recognized as bargaining representative Describes bargaining unit 12-44

45. Copyright © 2014 Pearson Education Management Rights Section that is often (but not always) written into labor agreement that spells out rights of management 12-45

46. Copyright © 2014 Pearson Education Union Security Closed shop: Only union members Union shop: Employees must become members Maintenance of membership: Must continue membership until termination of agreement Agency shop: Nonunion members pay dues Open shop: Equal terms for union members and nonmembers Dues check-off: Company agrees to withhold union dues 12-46

47. Copyright © 2014 Pearson Education Compensation and Benefits Wage rate schedule Overtime and premium pay Jury pay Layoff or severance pay Holidays Vacation Family care 12-47

48. Copyright © 2014 Pearson Education Grievance Procedure Grievance: Employee’s dissatisfaction or feeling of personal injustice relating to his or her employment Grievance procedure: Means by which employees can voice dissatisfaction with specific management actions 12-48

49. Copyright © 2014 Pearson Education Employee Security Seniority: Length of time employee has been associated with a company, division, department, or job 12-49

50. Copyright © 2014 Pearson Education Job-Related Factors Many rules governing employee actions on job are included 12-50

51. Copyright © 2014 Pearson Education Preparation for Negotiations Union must continuously gather information regarding membership needs to isolate areas of dissatisfaction Union steward is normally in best position to collect such data Management also spends long hours preparing for negotiations 12-51

52. Copyright © 2014 Pearson Education Negotiating the Agreement Begins with each side presenting initial demands Requires give and take Each side does not expect to obtain all demands presented 12-52

53. Copyright © 2014 Pearson Education Trends & Innovations: The Two-Tier Wage System Returns Two-tier wage system: Wage structure where newly hired workers are paid less than current employees for performing same or similar jobs Major negotiating point in 2011 labor agreement with UAW 12-53

54. Copyright © 2014 Pearson Education Breakdowns in Negotiations Third party intervention Union strategies for overcoming breakdowns Management strategies for overcoming breakdowns 12-54

55. Copyright © 2014 Pearson Education Third Party Intervention Mediation: Neutral party comes in when impasse is reached Arbitration: Impartial third party makes binding decision to settle dispute Sources of mediators and arbitrators: FMCS and AAA 12-55

56. Copyright © 2014 Pearson Education 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) 12-56

57. Copyright © 2014 Pearson Education Union Strategies for Overcoming Negotiation Breakdowns: Strikes Strikes: Union members refuse to work to pressure management in negotiations Strikes halt production, resulting in lost customers and revenue Fewer strikes today Timing is important Unions prefer to strike only as last resort 12-57

58. Copyright © 2014 Pearson Education Union Strategies for Overcoming Negotiation Breakdowns: Boycotts Union members agree to refuse to use or buy firm’s products – Example: Coors – Effect often lasts much longer than strike – Shoppers change buying habits Secondary boycott: Union practice to encourage third parties to stop doing business with company – Practice is illegal 12-58

59. Copyright © 2014 Pearson Education Management Strategies for Overcoming Negotiation Breakdowns: Lockout Lockout: Management keeps employees out Operate by placing management and nonunion workers in striking workers’ jobs Effective when: – Management dealing with weak union – Union treasury is depleted – Business has excessive inventories Type of industry involved has considerable effect on impact of this maneuver 12-59

60. Copyright © 2014 Pearson Education Management Strategies for Overcoming Negotiation Breakdowns: Continue Operations Without Striking Workers Operate firm by placing management and nonunion workers in striking workers’ jobs Type of industry involved has considerable effect on impact of this maneuver May live in plant and have food and other necessities delivered to them 12-60

61. Copyright © 2014 Pearson Education Reaching the Agreement Document that emerges from collective bargaining process is a “labor agreement” or “contract” Regulates relationship between employer and employees Essential but difficult task 12-61

62. Copyright © 2014 Pearson Education Ratifying the Agreement May be more difficult for union Until approved by majority of union members, proposed agreement not final Approval process for management is easier 12-62

63. Copyright © 2014 Pearson Education 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 12-63

64. Copyright © 2014 Pearson Education Grievance Procedure in a Union Environment Normally well defined Usually restricted to violations of terms and conditions of agreement Multistep grievance procedure is most common type 12-64

65. Copyright © 2014 Pearson Education Recent Executive Orders That Impact Federal Government Contractors EO 13496: Must post notices informing employees of rights to form and join unions EO 13494: No reimbursement for funds spent on influencing employees regarding unionization EO 13495: Must provide job opportunities to employees of previous service contractor EO 13502: Government construction projects in excess of $25 million must have project labor agreement requiring union work force 12-65

66. Copyright © 2014 Pearson Education Collective Bargaining in the Public Sector EO 10988: Established basic framework for collective bargaining in federal government Title VII of Civil Service Reform Act of 1978 regulates most of labor management relations in federal service. Establishes Federal Labor Relations Authority (FLRA) to bring public-sector model in line with private sector 12-66

67. Copyright © 2014 Pearson Education 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 12-67

68. Copyright © 2014 Pearson Education Decertification Procedure Rules established by NLRB: – At least 30% must petition for election – Petition submitted 60–90 days prior to expiration of current contract – Decertification election scheduled – If majority of votes against union, employees will be union free 12-68

69. Copyright © 2014 Pearson Education Unions Today Percent of wage and salary workers who are members of a union is 11.8% 7.6 million public sector employees belonged to union, compared with 7.2 million union workers in private sector 12-69

70. Copyright © 2014 Pearson Education A Global Perspective: Labor Unrest in China ACFTU has begun to put pressure on foreign-invested enterprises to establish unions and sign collective contracts Two years after strikes and suicides that rocked manufacturers in China, labor problems are again occurring. Strikes appear to be occurring daily 12-70