2. Collective Bargaining and Labor Relations After reading this chapter, you should be able to:  Describe what is meant by collective bargaining and labor relations.  Identify the labor relations, goals of management, labor unions, and society.  Explain the legal environment's impact on labor relations.  Describe the major labor-management interactions: organizing, contract negotiations, and contract administration. Chapter 14

3. Collective Bargaining and Labor Relations  Describe the new, less adversarial approaches to labor- management relations.  Explain how changes in competitive challenges (e.g., product- market competition and globalization) are influencing labor- management interactions.  Explain how labor relations in the public sector differ from labor relations in the private sector. Chapter 14

4. The Labor Relations Framework Competitive Challenges - Legal - Stakeholder needs - High-performance work systems Goals - Employees and unions - Management - Society Union Membership and Relative Bargaining Power Union Structure and Administration Goal Attainment - Employees and unions - Management - Society Union and Management Interactions - Organizing - Negotiating - Administering McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

5. The Labor Relations Framework  John Dunlop suggested a labor relations system that consists of four elements:  An environmental context  Participants  A web of rules  Ideology McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

6. Goals and Strategies  Society  Labor unions' major benefit to society throughout history has been the balancing of power and the institutionalization of industrial conflict in the least costly way.  The National Labor Relations Act (NLRA, 1935) sought to provide a legal framework conducive to collective bargaining.  Management  Must decide whether to encourage or discourage the unionization of its employees.  Labor Unions  Seek to give workers formal representation in setting the terms and conditions of employment. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

7. Union Structure, Administration, and Membership  National and International Unions  Craft unions  Industrial unions  Local Unions  Responsible for the negotiations of a contract as well as the day-to-day administration of the contract, including the grievance procedure.  AFL-CIO  Not a union but rather an association that seeks to advance the shared interest of its member unions at the national level. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

8. Union Security Checkoff Provision Right-to- Work Laws Closed Shop Maintenance of Membership Union Shop Agency Shop McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

9. Union Membership and Bargaining Power  Reasons for the consistent decline of union membership in the U.S. include:  Structural Changes in the Economy  Increased Employer Resistance  Substitution with HRM  Substitution by Government Regulation  Worker Views  Union Actions McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

10. Legal Framework  The 1935 NLRA enshrined collective bargaining as the preferred mechanism for settling labor-management disputes.  Section 7 of the NLRA: employees have the "right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining." McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

11. Unfair Labor Practices (ULPs)  The NLRA prohibits certain activities by both employers and labor unions:  Employers cannot interfere with, restrain, or coerce employees in exercising their Section 7 rights.  Employers cannot dominate or interfere with a union.  Employers may not discriminate against an individual for exercising his or her right to join or assist a union.  Employers may not discriminate against employees for providing testimony relevant to enforcement of the NLRA.  Employers cannot refuse to bargain collectively with a certified union. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

12. Unfair Labor Practices - Unions  Originally the NLRA did not list any union unfair labor practices. These were added by the 1947 Taft-Hartley Act.  The 1959 Landrum-Griffin Act further regulated unions’ actions and their internal affairs  i.e. financial disclosure and conduct of elections. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

13. Enforcement  The National Labor Relations Board (NLRB) has the primary responsibility for enforcing the NLRA.  The NLRB is a five-member board appointed by the president. Additionally, there are 33 regional offices.  The NLRB has two major functions:  To conduct and certify representation elections.  To prevent unfair labor practices.  ULP charges are filed at and investigated by the regional offices. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

14. Why Do Employees Join Unions?  Virtually every decision to join a union focuses on two questions?  Is there a gap between pay, benefits, and other conditions of employment that employees actually receive versus what they believe they should receive?  If such a gap exists, is it sufficiently large enough to motivate employees to remedy the situation? McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

15. The Process and Legal Framework of Organizing  An election may be held if at least 30 percent of the employees in the bargaining unitsign authorization cards.  A secret ballot election will be held. The union is certified by the NLRB if a simple majority of employees vote for it.  A decertification election may be held if no other election has been held within the year or if no contract is in force.  Certain categories of employees cannot be included in bargaining units. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

16. Organizing Campaigns  The NLRB may set aside the results of an election if the employer has created an atmosphere of confusion or fear of reprisals.  Associate union membership is a form of union membership in which the union receives dues in exchange for services but does not provide representation in collective bargaining.  Corporate campaigns seek to bring public, financial, or political pressure on employers during the organizing and negotiating process. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

17. The Negotiation Process Distributive Bargaining - win/lose Intraorganizational Bargaining - conflicting objectives of different factions Integrative Bargaining - win/win Attitudinal Structuring - relationship and trust McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

18. Preparing Managers for Negotiations  Seven steps:  Establish interdepartmental contract objectives.  Review the old contract.  Prepare and analyze data.  Anticipate union demands.  Establish the costs of various possible contract provisions.  Make preparations for a strike.  Determine the strategy and logistics. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

19. Negotiation Stages and Tactics  The early stages may include many individuals, as union proposals are presented.  During the middle stages, each side makes decisions regarding priorities, theirs and the other parties'.  In the final stage, momentum may build toward settlement or pressure may build as an impasse becomes more apparent. May involve interaction with negotiators or facilitators. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

20. Management’s Willingness to Take a Strike  The following factors help determine whether management is able to take a strike:  Product Demand  Product Perishability  Technology  Availability of Replacement Workers  Multiple Production Sites and Staggered Contracts  Integrated Facilities  Lack of Substitutes for the Product McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

21. Alternatives to Strikes  Mediation - Has no formal authority to force a solution; acts as a facilitator for the parties.  Fact finder - Investigates and reports on the reasons for the dispute and both sides' positions.  Arbitration - A process through which a neutral party makes a final and binding decision. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

22. Grievance Procedure  The negotiation process typically occurs every three years.  Negotiation processes and administration processes are linked.  The effectiveness of grievance procedures may be judged on three criteria:  How well are day-to-day problems resolved?  How well does the process adjust to changing circumstances?  In multi-unit contracts, how well does the process handle local contract issues?  The duty of fair representation is mandated by the NLRA and requires that all bargaining-unit members, whether union members or not, have equal access to and appropriate representation in the grievance process. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

23. Grievance Procedure  Arbitration is a final and binding step.  Criteria arbitrators use to reach decisions include:  Did the employee know the rule and the consequences of violating it?  Was the rule applied in a consistent and predictable way?  Were the facts collected in a fair and systematic way?  Did the employee have the right to question the facts and present a defense?  Does the employee have the right of appeal?  Is there progressive discipline?  Are there mitigating circumstances? McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

24. New Labor Management Strategies  There are signs of a transformation from an adversarial approach to a less adversarial and more constructive approach to union-management relations.  The transformation includes increasing worker involvement and participation and reorganizing work to increase flexibility.  Union leaders have frequently resisted such change, fearing an erosion of their influence. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

25. Labor Relations Outcomes  Strikes  Wages and Benefits  In 2000, private-sector unionized workers received, on average, wages that were 19 percent higher than nonunion counterparts.  Productivity  Some argue that unions increase productivity, while other argue that they decrease productivity.  Studies have concluded that union workers are more productive than nonunion workers although the explanation is unclear.  Profits and Stock Performance  These may suffer under unionization if costs are raised. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

26. The International Context  The United States has both the largest number of union members and the lowest unionization rate of any Western European country or Japan.  The growing globalization of markets will continue to put pressure on labor costs and productivity.  The United States differs from Western Europe in the degree of formal worker participation in decision-making. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

27. The Public Sector  During the 1960s and 1970s, unionization in the public sector increased dramatically.  As of 2003, 37 percent of government employees were covered by a union contract, and 42 percent of all government employees were covered by a collective bargaining contract.  Strikes are illegal at the federal level and in many states for government workers. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.