Resource Human Management:
Gaining a Competitive Advantage
Chapter 14
Collective Bargaining and Labor
Relations
McGraw-Hill/Irwin
Copyright 2010 by the McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
Describe collective bargaining and labor relations.
Identify labor relations, goals of management, labor
unions and society.
Explain legal environment's impact on labor relations.
Describe major labor-management interactions:
organizing, contract negotiations and contract
administration.
Describe new, less adversarial approaches to labormanagement relations.
Explain how changes in competitive challenges are
influencing labor-management interactions.
Explain how labor relations in the public and private
sectors differ.
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Labor Relations Framework
4 Elements of John Dunlops Labor Relations System
14-3
Labor Relations Framework
Competitive Challenges
- Legal
- Stakeholder Needs
- High-performance
Work Systems
Goals
Employees & Unions
- Management
- Society
Union Structure
&
Administration
Union Membership
&Relative
Bargaining Power
Union&Management
Interactions
- Organizing
- Negotiating
- Administering
Goal Attainment
- Employees& Unions
- Management
- Society
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Goals&Strategies
Society
Labor unions' major benefit to society has been balancing
power and institutionalization of industrial conflict in the
least costly way.
National Labor Relations Act (NLRA, 1935) provides a
legal framework conducive to collective bargaining.
Management
decides to encourage or discourage unionization.
Labor Unions
seek to give workers through collective action formal and
independent voice in setting employment terms and
conditions.
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Union Structure, Administration & Membership
National and International Unions
Craft unions
Industrial unions
Local Unions
Responsible for contract negotiations and day-today contract administration, including grievance
procedure.
AFL-CIO
Not a union but rather an association that
advances its shared interest of its member unions
at the national level.
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Union Security
Check off
Provision
Right-toWork Laws
Closed
Shop
Maintenance
of Membership
Union
Shop
Agency
Shop
14-7
Reasons for Decline
in U.S. Union Membership
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Legal Framework
Wagner Act of 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."
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Unfair Labor Practices (ULPs)
NLRA prohibits certain activities by both employers
and labor unions.
Employers cannot:
interfere with, restrain, or coerce employees in exercising
their Section 7 rights.
dominate or interfere with a union.
discriminate against an individual for exercising his or her
right to join or assist a union.
discriminate against employees for providing testimony
relevant to enforcement of the NLRA.
refuse to bargain collectively with a certified union.
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Unfair Labor Practices - Unions
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Enforcement
National Labor Relations Board (NLRB)
enforces NLRA.
NLRB is a five-member board appointed by the
president with 33 regional offices.
NLRBs 2 Major Functions:
1. conduct and certify representation elections.
2. prevent unfair labor practices.
ULP charges are filed at and investigated by the
regional offices.
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Why Do Employees Join Unions?
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Process &Legal Framework of Organizing
An election may be held if at least 30%of employees in the
bargaining unit sign authorization cards.
Secret ballot election will be held. The union is certified by
NLRB if a simple majority of employees vote for it.
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- agricultural laborers, independent contractors,
supervisors, and managers.
The Employee Free Choice Act- pending
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Organizing Campaigns
NLRB may set aside election results if the
employer created an atmosphere of confusion or
fear of reprisals.
Associate union membership- union receives
dues in exchange for services does but not
provide representation in collective bargaining.
Corporate campaigns bring public, financial or
political pressure on employers during the
organizing and negotiating process.
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Union and Management Interactions:
Negotiation Process
Distributive
Bargaining
- Win/Lose
Intraorganizational
Bargaining
-Conflicting Objectives
-Different Factions
Integrative
Bargaining
- Win/Win
Attitudinal
Structuring
- Relationship&Trust
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Preparing Managers for Negotiations
7 Steps:
1.
2.
3.
4.
5.
6.
7.
Establish interdepartmental contract objectives.
Review old contract.
Prepare and analyze data.
Anticipate union demands.
Establish costs of various contract provisions.
Make preparations for a strike.
Determine strategy and logistics.
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Negotiation Stages and Tactics
14-18
Negotiation Stages and Tactics
Early stages may include many individuals, as
union proposals are presented.
Middle stages, each side makes decisions
regarding priorities, theirs and the other parties'.
Final stage, momentum may build toward
settlement or pressure may build as impasse
becomes more apparent. May involve interaction
with negotiators or facilitators.
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Managements Willingness to
Take a Strike
14-20
Managements Willingness to
Take a Strike
7 Factors If Management Is Able To Take a Strike:
1. Product Demand
2. Product Perishability
3. Technology
4. Availability of Replacement Workers
5. Multiple Production Sites and Staggered
Contracts
6. Integrated Facilities
7. Lack of Substitutes for Product
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Alternatives to Strikes
Mediation - Has no formal authority to force a
solution; acts as a facilitator for parties.
Fact finder - Investigates and reports on
reasons for dispute and both sides' positions.
Arbitration -process through which a neutral
party makes a final and binding decision.
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Grievance Procedure
Negotiation process occurs every three years.
Negotiation and administration processes are
linked.
Effectiveness of grievance procedures may be
judged on three criteria:
1. How well are day-to-day problems resolved?
2. How well does the process adjust to changing
circumstances?
3. In multi-unit contracts, how well does the
process handle local contract issues?
Duty of Fair Representation
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Grievance Procedure
Arbitration is a final and binding step.
Criteria arbitrators used to reach decisions
include:
1. Did the employee know the rule and the
consequences of violating it?
2. Was the rule applied in a consistent and
predictable way?
3. Were the facts collected in a fair and systematic
way?
4. Did the employee have the right to question the
facts and present a defense?
5. Does the employee have the right of appeal?
6. Is there progressive discipline?
7. Are there mitigating circumstances?
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New Labor Management Strategies
14-25
Labor Relations Outcomes
Strikes- impose significant costs on union members,
employers, and society.
Wages and Benefits
In 2008, private-sector unionized workers received
21% higher wages that nonunion counterparts.
Total compensation was 40 % higher for union-covered
employees because of unions effect on benefits.
Productivity effects of unions is debated.
Union workers are more productive than nonunion workers
although the explanation is unclear.
Profits and Stock Performance- may suffer under
unionization if costs are raised.
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International Context
Except for China, Russia and Ukraine, U.S. has
more union members than any other country.
Growing globalization of markets will continue to
put pressure on labor costs and productivity.
U.S. differs from W. Europe in formal worker
participation in decision-making.
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Public Sector
2008 some 36.8 % of government employees
were union members.
Strikes are illegal at the federal level and in many
states for government workers.
In 2008, 3 of 15 major work stoppages were
in the public sector.
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Summary
Labor unions seek to represent their members interests in
the workplace.
May witness diminished ability to compete effectively in
global economy.
Management in nonunion companies feel compelled to
resist unionization.
Union losses in membership and bargaining power in the
private sector.
Management and unions are seeking new, more effective
ways of working together to enhance competitiveness while
giving employees a voice in workplace decisions.
14-29