LABOR RELATIONS AND COLLECTIVE BARGAINING

REPORTED BY: LYNA U. HANAPI

3 REASONS WHY WORKERS JOIN UNIONS

1.

2.

3.

Dissatisfaction with the work environment, including working conditions, compensation, and supervision; A desire to have more influence in affecting change in the work environment; and Employee beliefs regarding yhe potential benefit of unions.

Determinants of Propensity Join Unions

Perceptions of work environment a. Job dissatisfaction b. Working conditions c. Inequity perceptions

Perceptions of influence a. Desired influence b. Difficulty of influencing conditions

Propensity to unionize

Beliefs about unions a. Image and expectations about unions

1. Dissatisfaction with their jobs:

 Wages  Benefits  supervision

2. Belief that there are no other options for either gaining more influence
 Workers

are much more likely to join a union if they perceive that they have little or no influence on important matters at work.

3. Belief that union can improve conditions

 Workers

perceive that unions are more likely to help solve problems in the workplace is more likely to vote for unionization

THE LEGAL ENVIRONMENT OF LABOR RELATIONS

 National

Labor Relations Commission - is a quasiquasi-judicial body which symbolizes the common front organized by government, labor and management to expeditiously resolve labor disputes thru the process of mediation.

 Department

of Labor and Employment for program and policy coordination. It plays a vital role in the government's program of promoting and maintaining industrial peace thru the speedy dispensation of labor justice and development of an effective dispute settlement machinery.
COURT OF INDUSTRIAL RELATIONS THE INTERIM NLRC THE NLRC UNDER P.D. 442 THE NLRC UNDER EO's 47 AND 252 THE NLRC UNDER R.A. 6715 R.A. 7700 R.A. 8042

OTHER IMPORTANT LABOR LAWS



R.A. No. 875, otherwise known as Industrial Peace Act, and enacted on 15 June 1953, to include unfair labor practice issues; matters relating to labor disputes in industries indispensable to the national interest; questions concerning representation of employees; and claims under the minimum wage law and hours of work. It instituted free collective bargaining as the principal mode of labor dispute settlement.

HOW DO WORKERS FORM UNIONS?

The process of organizing workers can be lengthy. Typically, the steps are as follows:  Either membership is solicited by the employees who contact a union might conduct an organizing drive.  At least 30% of employees must sign authorization cards that stipulate that a particular union should be their representative in negotiating with the employer

Date Strictly Confidential

..

Sample Union Authorization Card

Office & Professional Employees International Union, Local 153, AFL-CIO 265 West 14th Street, New York, NY 10011 741-8282 I hereby authorize Office & Professional Employees International Union, Local 153, AFL-CIO,to represent me and to petition the National Labor Relations Board to conduct a secret ballot election among the staff. Name Address (Zip Code) Present Employer Present Employer s Address Position .. Department Signature . CONFIDENTIAL . .. Tel. No. (Please print)

1. 2.

3.

The NLRB is petitioned to conduct an election. Assuming the authorization cards are in order, the NLRB sets a date for the election. A secret ballot representative certification (RC) election is held, which requires that a majority of eligible voting workers accept the union.

EFFECTS OF UNIONS
 Improve

wages, working conditions, and job security  Have positive fringe benefit In general, those who are usually paid the least tend to benefit the most from unionization. Younger workers

 Nonwhites,  People

living in the South and the West  Blue-collar workers Blueseem to gain the most from unionization Research: public sector unions shows +5% pay differential for public sector employees represented by unions vs. publicpublic-sector employees not represented.

Union wage effects

 1. 2. 3.

Wages can be taken out of competition in several ways: Labor demand may be relatively insensitive to wage changes (inelastic) Collective voice of unions reduces worker quit rates Management is forced to become more efficient when faced with the necessity of providing higher wages to unionized employees.

2 THEORIES EXIST REGARDING THE UNIONS EFFECTS UPON FIRMS PRODUCTIVITY

1.

2.

Productivity is predicted to decrease in unionized firms because unions create resources misallocation and demand restrictive work rules. Productivity gains may occur because the union wage effect causes firms to manage better, employ better-quality labor, substitute bettercapital for labor, and reduce voluntary turnover, is predicted (the collective voice view

Negative Effects
 On

productivity when there is relatively greater conflict between the union and management

Positive Effects
 Found

in competitive industries with higher union wage effects (where firm survival apparently depends upon offsetting the higher wage costs with increased productivity) general, productivity remains higher in union establishments than in nonunion establishments

 In

UNIONS AND QUALITY OF WORKLIFE (QWL) ISSUES



QWL came to the forefront in the 1980s and play an important role in the laborlabormanagement relationship.

Some QWL programs: 1. Job redesign efforts; 2. Upward communication 3. Team-based work configurations; and Team4. Quality circles (QCs)

RESEARCH ON EFFECTS OF QWL EFFORTS IN UNION SETTINGS

1.

2.

QWL programs didn t have any effect upon the firm s economic performance. However, Unionized firms had more gains from employee participation than did nonunion firms. QWL programs can improve the firm s industrial relations.

UNION EFFECTS ON WORKER SATISFACTION Positive  Better wages  Better benefits  Improved working conditions Negative Supervision Coworkers Job content

UNIONS AND HRM

Unions make HRM more challenging.  Union itself gives employees a voice in the development of work rules  Termination is generally for cause only.  Total compensation is almost always higher  Staffing and performance management activities are often subject to collective bargaining.

COLLECTIVE BARGAINING
OCCURS WHEN REPRESENTATIVES OF A LABOR UNION MEET WITH MANAGEMENT REP to:  DETERMINE EMPLOYEES WAGES AND BENEFITS;  create or revise work rules; and  resolve disputes or violations of the labor contract.

Knowledge of labor relations and collective bargaining is important for HRM specialists and general managers:  Labor relations is closely tied to HR planning  Labor relations are also tied to recruitment and selection  Finally, the area of HR where a knowledge of collective bargaining is probably critical is compensation and benefits

The Labor Contract

 Is

a formal agreement between a union and management that specifies the conditions of employment and the unionunionmanagement relationship over a mutually agreed upon period of time.  Specifies what the two parties have agreed upon regarding issues such as wages, benefits, and working conditions.

 The

process involved in reaching this agreement is a complex and difficult job requiring a willingness from both sides to reconcile their differences and compromise their interests.  This process is also bound to certain good faith guidelines that must be upheld by both parties.

GoodGood-faith bargaining is characterized by the following events:

 Meetings

for purposes of negotiating the contract are scheduled and conducted with the union at reasonable times and places.  Realistic proposals are submitted.  Reasonable counterproposals are offered.  Each party signs the agreement once it has been completed.

GoodGood-faith bargaining:
 Doesn t

mean that either party is required to agree to a final proposal or to make concessions.  The NLRB further defines the duty to bargain as covering bargaining on all matters concerning rates of pay, wages, hours of employment and other conditions of employment.

Mandatory issues for bargaining include wages, benefits, hours of work, incentive pay, overtime, seniority, safety, layoff and recall procedures, grievance procedures, and job security.  Permissive or nonmandatory issues have no direct relationship to wages, hours, or working conditions. These may include changes in benefits for retired employees, performance bonds for unions or management, and union inpiut into prices of the firm s products.


Issues in Collective Bargaining



WageWage-related issues how basic wage rates are determined, cost-of-living adjustments (COLAs), cost-ofwage differentials, overtime rates, wage adjustments, and two-tier wage systems. twoSupplementary economic benefits pension plans, paid vacations, paid holidays, health insurance plans, dismissal pay, reporting pay, and supplementary unemployment benefits (SUB).

 Institutional

issues rights and duties of employers, employees, and unions, including union security (union membership as a condition of employment), check-off procedures, checkemployee stock ownership plans (ESOPS), and QWL programs.  Administrative issues seniority, employee discipline and discharge procedures, employee health and safety, technological changes, work rules, job security, and training.

Types of Bargaining


Distributive is the most common type of bargaining and involve zero-sum zeronegotiation(winnegotiation(win- lose). Unions and management have initial offers or demands, target points (e.g., desired wage level), resistance points (e.g., unacceptable wage level), and settlement ranges (e.g., acceptable wage level). Integrative is similar to problem-solving problemsessions in which both sides are trying to reach a mutually beneficial alternative (win-win). (win-

- Another name for this type of bargaining is interest-based bargaining . interest- Objective: for both parties find the common ground between them, build relationships, and eliminate the adversarial elements of traditional bargaining. Concessionary bargaining involves a union s giving back to management some of what it has gained in previous bargaining. - It is often economic adversity that motivates concessionary bargaining.

Conducting Labor Contract Negotiations



Preparing for Negotiations - one must have a planning strategy.

1.

Data gathering for the next negotiation session immediately after the contract is signed. Reviewing and diagnosing the mistakes and weaknesses from previous negotiations. Gathering data on economic conditions, studying consumer price indices, determining costcostof-living trends, and looking on projections ofregarding the short-term and long-term financial shortlongoutlook.

 During

this phase, employers develop a written plan covering its bargaining strategy. - considers the union s goals to be and the degree to which it is willing to concede on various issues. - helps to identify the relative importance of each issue in the proposal.

Meeting in Contract Negotiations

-

To establish a climate for negotiations. To establish the bargaining authority of each party and determine rules and procedures that will be used throughout the negotiation process.

Resolving Bargaining Deadlocks and Impasse Resolution

- delay consideration of the more difficult issues until the latter stages of bargaining and ,for the time being, to simply agree to disagree on the tougher decisions.

each side to be prepared to offer propositions and to accept alternative solutions to some of the more controversial issues. - mediator a neutral party who reviews the dispute between the two parties. - mediation based upon the principle of voluntary acceptance.

The Union s Economic Power in Collective Bargaining

 Striking
one tool a labor union can use to motivate an employer to reach an agreement is to call a strike.

the Employer

Strike

is simply a refusal on the part of employees to perform their jobs.

Picketing the Employer

picket is used by the employees on strike to advertise their dispute with mngt and to discourage others from entering or leaving the premises.

 Boycotting

involves refusing to patronize an employer in other words, refusing to buy or use the employer s products or services.

the Employer

2 Types of Boycotts: 1. Primary boycott involves the refusal of the union to allow members to patronize a business where there is a labor dispute. In most cases, it is legal. 2. Secondary boycott tries to induce third parties, such as suppliers and customers, to refrain from any business dealings with an employer with whom it has a dispute. Under Taft-Harley Act, is illegal. Taft-

The Employer s Power in Collective Bargaining

 Ability

to determine how to use capital within the organization- enables them to decide organization-

whether and when to close the company to transfer operations to another location; or to subcontract out certain jobs.  Increase the ability to operate during a strike with a substantially reduced staff due to technological advances strikes in the public sector is illegal in most states, although walkouts have occurred in some states where strikes are illegal.

 Lockout

is basically a shutting down of operations, usually in anticipation of a strike. - also can be used to fight union slowslowdowns, damage to property, or violence within the plants. - generally, lockouts are not used very often because they lead to financial revenue losses for the firm.

Administration of the Labor Contract

-

Application and interpretation of the labor agreement. Most of the problems are resolved at the lower levels of the grievance procedure. Unresolved grievances proceed progressively to higher and higher levels of mngt and union representation. Most contracts stipulate that the final step will be binding arbitration. Arbitration involves bringing in a third party, an impartial outsider mutually agreed upon by both parties, to decide the controversy.

A Grievance Procedure
Empolyee with a grievance

Immediate supervisor

Employee: possibly shop steward

Department manager

Business rep, Grievance committee

Personnel/ industrial relations dir

National union rep. and local union rep.

Arbitration

 Grievance

Procedure

- grievance is a formal complaint regarding the event, action, or practice that violated the contract. Grievance Procedure Serves a Number of Purposes To determine whether the labor contract has been violated. violated. To settle alleged contract violations in as friendly and orderly as fashion as possible, before they become major issues. issues. To prevent future grievances from arising, improving communication and cooperation between labor and mngt, mngt, and helping to obtain a better climate of labor relations. relations.

1. 2.

3.

 
1) 2) 3) 4)

To clarify what often is not clear in the contract. To establish the following: How the grievance will be initiated, The number of steps in the process, Who will represent each party, and The specified number of working days within which the grievance must be taken to the next step in the hearing.

Failure to comply with time limits may result in forfeiture of the grievance.

Resolution of Grievance
 

It reduces the chance that differing versions of the grievance will be circulated. It forces the employee to approach the grievance in a comparatively rational manner, thus helping to eliminate or reduce the likelihood of trivial complaints or feelings of hostility. Most grievances are settled early in the process.

Arbitration Process
 

Is the final step in the grievance procedure. In the majority of grievances filed, arbitration is not necessary since resolutions are usually made during lower-level discussions. lowerArbitrator s role is to make a ruling that is final and binding upon both parties

The Decision to Arbitrate



The decision about whether or not to take a grievance to arbitration depends upon a number of factors and circumstances.

2 Things might Happen Before Arbitration Becomes Necessary: 1. The union could withdraw the grievance or 2. The employer could give in

Selection of the Arbitrator

Union and mngt will select an arbitrator from a panel of names submitted by either the FMCS or the AAA.  The two parties will then agree upon an arbitrator through a process of elimination or some other mutually acceptable procedure. permanent arbitrator ad hoc method


The Arbitration Process


1. 2. 3.

QuasiQuasi-judicial, less formal than court proceedings Submission agreement (oral or written) Up to each of the parties to educate the arbitrator about relevant issues, facts, evidence, and arguments. Arbitrator has the right to question witnesses or to request additional facts. Arbitrators are not bound by formal rules of evidence like those used in a court of law. Throughout the arbitration proceedings, a court recorder may be present to prepare a transcript of the hearing.

4. 5.

Basis for the Arbitrator s Decision and Award

Arbitrator writes his opinion supporting the decision and award (evidence and facts)  He has 30 days to consider the evidence and to prepare a decision. Bases: 1. Strictly upon the contract. 2. Accurate assessment and interpretation of the contractual clauses of the labor agreement. 3. If the employee was accorded due process. 4. Make sure not based upon precedents established in previous cases, but rather on the facts of the current case.


Criticisms of the Arbitration Process



Expensive and time-consuming. time-

Current and Future Trends in Labor Relations

Union Membership

PrivatePrivate-Sector


PublicPublic-Sector


Union membership is dropping Bargaining power is high

Union membership is increasing Bargaining power is less