2. Administering the Employment Relationship
Chapter 11
Administering the Employment Relationship
McGraw-Hill/Irwin
An Introduction to Collective Bargaining & Industrial Relations, 4e
Copyright © The McGraw-Hill Companies, Inc. All rights reserved.

3. The Grievance Procedure
The grievance procedure specifies a series of steps to resolve a worker’s complaint that management has not followed the agreement
Grievances are most often precipitated by the complaint of an employee against a supervisor
Steps of an employee initiated grievance procedure typically include:
Step 1. Employee discusses grievance with the supervisor
Step 2. Grievance put into writing and parties discuss the grievance; management puts response in writing
Step 3. If unsuccessful, the grievance is appealed
Step 4. Union decides whether to appeal to arbitration

4. The Reasons Why Grievances Are Filed
Employee discipline is a common source of grievances
The employee may feel that he/she did not violate the contract, or that the discipline is too harsh
A contract simply cannot specify what is to happen under all circumstances
Unions and management prefer a grievance procedure rather than trying to stipulate all potential issues of future dispute
Grievance filings can be tactical to show union discontent regarding an issue
This will tend to rally the employees and increase future bargaining leverage

5. The Historical Evolution of Grievance Arbitration
The Spread of Arbitration
The advocacy of the War Labor Board during WWII helped grievance arbitration to become a common practice
Later, Taft-Hartley embedded grievance arbitration in national labor policy
Court Encouragement of Arbitration
A series of Supreme Court decisions known as the Steelworkers’ trilogy encouraged the use of arbitration and insulated arbitration awards from judicial review

6. Judicial Deference to Arbitration
Court cases continued the basic principle of judicial deference in the Steelworkers’ trilogy and added modifications
In the Collyer decision of 1971, the court gave the arbitrator the responsibility to rule on an unfair labor practice issue
In the Olin decision of 1984, the courts broadened the deferral of other unfair labor practice issues to arbitration

7. The Functions of Grievance Procedures and Arbitration
Employee Interest in Due Process and Fairness
The grievance procedures protect workers and render industrial justice
Alternatives to grievances could cost management more to adjudicate
If employees were to lose confidence in the procedures, they may turn to more costly and disruptive methods to solve their problems
Employer Interest in Labor Peace
Grievance procedures reduce the likelihood of work stoppages
Some contracts allow workers to strike over health and safety issues, since they may be urgent and potentially life-threatening

8. Joint Interests in Continuity and Consistency
Both sides benefit from procedures that are consistent and allow flexibility in addressing unforeseen developments and unique needs
Society’s Interest in Industrial Peace
Grievance and arbitration procedures serve the interests of society by preserving industrial peace and not overloading the courts

9. How Arbitration Works The Components of Arbitration
Prehearing Briefs present the sides’ views before the hearing
Stipulations are shorter than briefs, and are statements of the issues in dispute and some key facts in the case
The Arbitration Hearing
The parties present their positions and evidence to support their cases
In disciplinary hearings, management will commonly be asked to present their statement first

10. The Arbitrator’s Decision
Some contracts stipulate time limits for the decisions, though decisions are commonly rendered within 30 days
Arbitrators seldom add substantial punitive penalties to their decisions
If reinstatement is ordered, the arbitrator could order the company to pay the employee full wages that have been lost
Arbitrator’s Decision Criteria
Most agreements require discipline to be for just cause
The arbitrator must first determine if the issue actually occurred, then if it was a violation of the agreement
Arbitrators commonly require progressive discipline and allow severe discipline for repeat offenses

11. The Importance of Past Practice
Arbitrators commonly rely heavily on custom
If, for example, the company commonly suspended a worker for one week for a third absence, the arbitrator would not allow a more severe penalty on another employee unless there were extenuating circumstances
Arbitrators could turn to practice at another firm for guidance, if no guidance on that issue were available at the worker’s firm

12. The Impact of Public Policy Considerations in Arbitration
The role of the arbitrator is to decide grievances based upon the collective bargaining agreement
Events of the past two decades question whether arbitration is responsive to public policies that govern employee rights
Arbitrators are divided over whether they should consider external laws when deciding a grievance
Those who favor a more active role acknowledge that the arbitrator's role would shift from one primarily serving the interests of the agreement toward one serving public policies

13. Who Are the Arbitrators?
They usually have some expertise in industrial relations and are sometimes designated in the agreement
Some labor agreements provide for permanent arbitrators
Many arbitrators are part-time, and also work, for example, as labor relations or law professors

14. The Union’s Decision to Go to Arbitration
It is not a simple matter for the union to decide to press a grievance to arbitration
Arbitration is costly
The union might drop the case even it is winnable but insignificant
Unions must be careful to fulfill their “duty of fair representation” (DFR) to the affected employee

15. The Duty of Fair Representation
In 1944, the Supreme Court ruled that, in return for the rights of exclusive representation, the union has the duty to represent all members without discrimination, fairly, impartially, and in good faith
Court held against “arbitrarily ignoring a meritorious grievance or processing it in a perfunctory manner; fraud, deceit, or bad-faith conduct in the handling of a grievance; and refusal to handle a grievance out of personal hostility toward the grievant

16. Union Responsibilities under the Duty of Fair Representation
1. Individual employee has a right to have the clear terms of the contract enforced
2. Employee has no right to a particular interpretation of the contract, but does have a right to have it applied consistently
3. Union has no duty to carry every grievance to arbitration, but must process arbitrations similarly on merit
4. Union cannot settle a grievance in bad faith
5. Union cannot trade an individual’s meritorious grievance for the benefit of another
6. Union owes the employee reasonable care in investigating the grievance

17. Contract Bargaining versus Contract Administration
The Connections between Grievance Procedures and Other Aspects of the Labor-Management Relationship
Contract Bargaining versus Contract Administration
The attitudes of the parties in negotiations typically carry over into the administration of the contract
Cooperative attitudes between union and management increased the likelihood that grievances would be settled at the lower steps in the procedure
The number of issues in negotiations and the time until settlement are correlated with the rate of grievances
Fractional Bargaining: Informal bargaining with the supervisor to modify the agreement

18. The Functions of a Workplace Industrial Relations System: Interrelationships and Outcomes

19. Mid-term or Continuous Bargaining
The average length of collective bargaining agreements appears to be increasing in the U.S.
FMCS data suggests the duration of nearly 40% of new agreements is more than three years
This requires some means of addressing issues that arise during the term of the agreement in addition to the grievance procedure
Can be done with “Letters of Agreement” that are binding

20. The Limits of Arbitration: Conflicts over Technological Change
Changes in technology can alter how work is performed
Computer aided design (CAD) is one example
CAD can transfer drafting and similar jobs from their traditional place within blue-collar production units to non-unit engineers
As new technologies evolve, disputes over such issues will become more common
The Japanese industrial relations system may be better suited to respond to changing technologies than the U.S.
In Japan, both blue- and white-collar workers are in the same union
Britain may be less able to respond to change, since separate blue- and white-collar unions and a heavy reliance on craft unionism slows adjustment

21. Evaluating the Performance of the Grievance System
Most employee complaints are resolved informally
Low grievance rates may be a sign that unions are not aggressively enforcing the terms of the contract
Time and Costs of Settling Grievances
Two criteria that are commonly used to evaluate grievance procedures are the time taken to settle claims and the cost
Although still shorter than litigation, the time to resolve an arbitration is increasing
In 2005, the average time for a settlement following the request for an arbitrator was 401 days – plus an average 163 days following the grievance filing
Litigation is typically 2-3 years
In 2005, the average cost of arbitration was $3,732, compared to typically more than $10,000 for litigation

22. The Effects of Arbitration Decisions
Some reinstated employees face hostility of supervisors and even fellow workers
Those who appealed grievance decisions later had more negative performance and promotion experiences
Supervisors of grievance filers also faced similar problems
Thus, the process should be used with caution
Both sides can learn from the grievance experience and benefit from such changes

23. Alternatives to the Grievance Procedure in the Union Sector
The costs and delays of grievances and arbitrations have led to some alternative procedures
Expedited Arbitration
Parties agree to speed the disputes and bypass certain steps and expedite time lines
Grievance Mediation
Third party functions as both a mediator and arbitrator
Empowered to settle the dispute if mediation fails
Mediation settlements are quicker and less costly than arbitration cases (in 1985 it was $309 versus $1,300, and 19 days versus 52 days)

24. Conflict Resolution in Nonunion Settings
The absence of a union does not eliminate the need for conflict resolution
Many employers have instituted complaint systems for nonunion employees
These procedures are often the only direct recourse available to nonunion employees who feel they have been treated unfairly
These procedures are often less consistent in ensuring fair treatment than union grievance procedures

25. Reasons for Adopting Nonunion Grievance Procedures
There are three major reasons why employers adopt nonunion grievance procedures
1. A management strategy to improve performance of the workforce
2. Employers may adopt nonunion grievance procedures as part of union avoidance strategies
3. Employers may adopt nonunion grievance procedures to reduce the risk of litigation from employees.

26. Types of Nonunion Grievance Procedures
While union grievance procedures are standard in structure, nonunion procedures vary greatly
At least half of nonunion firms have formal grievance procedures
But many lack any procedures for resolution
The most basic is the "open door" policy
The employee is invited to complain to the manager
Ombudsman are an alternative to traditional procedures
They help to resolve complaints and conflicts among employees and managers

27. Integrated Conflict Management Systems
In recent years, a trend has emerged toward “integrated conflict management systems”
They use a systematic approach to preventing, managing, and resolving conflict by focusing on the causes
Complaints by employees against supervisors, peer disputes, poor service, or team disagreements are some of the reasons for this trend
Also, workplace disputes now include complex problems such as intellectual property and conflict of interest

28. Why Nonunion Employees Desire Complaint Procedures
Employees in non-union firms seek complaint procedures in part because they might challenge discharge
Without such procedures, courts have applied a doctrine called employment at will
That doctrine stipulates that both the employer and employee are free to end the employment relationship at any time – provided the termination does not violate statutory constitutional provisions
Courts have loosened the employment-at-will doctrine in recent years, but there is still controversy surrounding the due process rights of nonunion employees

29. Differences between Union and Nonunion Grievance Procedures
While both provide resolution for conflict, there are important differences between union and nonunion workplaces
Unionized workplaces have established in collective bargaining agreements jointly by the union and management
While the union represents the employee in the union setting, the employee typically represents him or herself in a nonunion setting
Management makes the decision in a nonunion setting, not an arbitrator

30. Impact of Nonunion Grievance Procedures
Employees are less likely to use grievance procedures in a nonunion setting
If the procedures contain "due process" procedures, they are more willing to engage in the process
Critics say that employees fear reprisals for filing grievances
Surveys indicated that one-third who did not file grievances feared reprisals or feared little chance of success

31. Peer Review and Union Avoidance
In recent years, a number of firms have adopted peer review
This is a particular type of complaint resolution procedure
It is also an effective union substitution device
Review panels are established to decide employee grievances
Key feature is that the majority of members of the panel are peer employees of the grievant

32. Nonunion Arbitration and Employment Laws
Arbitration has long been a feature of union grievance procedure
By contrast, use of arbitration has been far less common in the nonunion sector
But mandatory arbitration has grown in the nonunion sector, from being rare in the 1990s to approximately 15 percent by the mid-2000s

33. Debates Over Mandatory Arbitration
Advocates say it provides a faster and more efficient mechanism for resolving employment law claims
Critics say that procedures are controlled by employers, suffer from potential bias of arbitrators, and move the adjudication of public employment claims from the public forum of courts to arbitration
Critics further worry that procedures will systematically bias the procedures in favor of employers

34. Due Process Models
While the debate continues over the enforcement of mandatory arbitration procedures, there are new models for due process protections
In 1994, the U.S. Department of Labor's Commission on the Future of Worker-Management Relations proposed a set of quality standards for fairness in nonunion arbitration
In 1995, the American Bar Association developed a similar "Due Process Protocol" for arbitration procedures
While courts continue to enforce mandatory arbitration agreements, they are expecting higher standards of due process in arbitration

35. Summary
Grievance procedures provide a mechanism to settle disputes that arise during the term of the agreement
They typically include successive steps
Contracts are complex and thus require an interpretive procedure such as arbitration
Arbitrators consider past practice in the workplace in their decision-making process
Arbitrators’ decisions can be overturned on the merits of the case if public laws are applied