Chapter

11
Administering the Employment Relationship

McGraw-Hill/Irwin An Introduction to Collective Bargaining & Industrial Relations, 4e

Copyright 2008 The McGraw-Hill Companies, Inc. All rights reserved.

The Grievance Procedure

The grievance procedure specifies a series of steps to resolve a workers 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

11 -3

The Reasons Why Grievances Are Filed

Employee discipline is a common source of grievances

A contract simply cannot specify what is to happen under all circumstances

The employee may feel that he/she did not violate the contract, or that the discipline is too harsh
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
11 -4

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
11 -5

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

11 -6

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 lifethreatening
11 -7

Joint Interests in Continuity and Consistency

Both sides benefit from procedures that are consistent and allow flexibility in addressing unforeseen developments and unique needs

Societys Interest in Industrial Peace

Grievance and arbitration procedures serve the interests of society by preserving industrial peace and not overloading the courts

11 -8

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 parties present their positions and evidence to support their cases In disciplinary hearings, management will commonly be asked to present their statement first
11 -9

The Arbitration Hearing

The Arbitrators 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

Arbitrators 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 -10

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 workers firm

11 -11

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

11 -12

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

11 -13

The Unions 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

11 -14

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

11 -15

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 individuals meritorious grievance for the benefit of another 6. Union owes the employee reasonable care in investigating the grievance
11 -16

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

11 -17

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

11 -18

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

11 -19

The Limits of Arbitration: Conflicts over Technological Change

Changes in technology can alter how work is performed Computer aided design (CAD) is one example 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. 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
In Japan, both blue- and white-collar workers are in the same union CAD can transfer drafting and similar jobs from their traditional place within blue-collar production units to non-unit engineers

11 -20

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

11 -21

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

11 -22

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)

11 -23

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
11 -24

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.

11 -25

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
11 -26

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
11 -27

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

11 -28

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
11 -29

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

11 -30

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

11 -31

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
11 -32

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
11 -33

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

11 -34

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

11 -35