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Copyright © 2014 Pearson Education, Inc.
Human Resource Management 13th Edition
Chapter 12 Labor Unions &
Collective Bargaining
12-1Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
Learning Objectives• Describe project labor agreements and explain why employees
join unions.
• Describe organized labor’s strategies for a stronger movement and explain the basic structure of a union.
• Discuss laws affecting collective bargaining, including revisiting the NLRB and pay secrecy, and identify the steps that lead to establishing the collective bargaining relationship.
• Describe the collective bargaining process and explain collective bargaining issues.
• Describe preparation for negotiations, negotiating the agreement, the two-tier wage system, and breakdowns in negotiations.
Copyright © 2014 Pearson Education, Inc. 12-2
Copyright © 2014 Pearson Education, Inc.
Learning Objectives (Cont.)• Describe what is involved in reaching, ratifying, and
administering the labor/management agreement.
• Describe the grievance procedure in a union environment.
• Explain recent labor-management legal trends and describe collective bargaining in the public sector.
• Explain union decertification.• Describe the state of unions today and discuss labor
unrest in China.
Copyright © 2014 Pearson Education, Inc. 12-3
Copyright © 2014 Pearson Education, Inc.
HRM in Action: Project Labor Agreements
• Project labor agreement: Pre-hire collective bargaining agreement between construction firm owners and one or more labor organizations establishing terms and conditions of employment for specific construction project
• President Obama signed EO 13502 into law in 2009 which encourages use of PLAs
Copyright © 2014 Pearson Education, Inc. 12-4
Copyright © 2014 Pearson Education, Inc.
Why Employees Join Unions
• Dissatisfaction with management
• Social outlet
• Opportunity for leadership
• Forced unionization
• Peer pressure
12-5Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
Dissatisfaction With Management
• Compensation
• Job security
• Management attitude
12-6Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
Social Outlet
• Many people have strong social needs • Unions sponsor recreational and social
activities• People who develop close personal
relationships will likely stand together in difficult times
12-7Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
Opportunity for Leadership
• Some individuals aspire to leadership roles
• Can often satisfy those aspirations through union membership
• Union also has hierarchy of leadership
• Begins with union steward
12-8Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
Forced Unionization
• In 27 states without right-to-work laws, it is legal for employer to agree with union that new employee must join union after certain period of time (generally 30 days) or be terminated
• Called a union shop agreement
12-9Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
Right-to-Work Laws
• Prohibit management and unions from entering into agreements requiring union membership as condition of employment
• Bans practice of requiring union membership or financial support as condition of employment
• 23 states have adopted such laws
12-10Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
Peer Pressure
• Some join a union because they are urged to do so by other workers
• Peers may constantly remind employee that he or she is not a member of union
• In extreme cases, union members have threatened nonmembers with physical violence, and have sometimes carried out these threats
12-11Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
Union Growth Strategies• Strategically located union members • Pulling union through• Political involvement• Union salting• Flooding community• Public awareness campaigns • Building organizing funds• Partnering with high schools• Organizing through the card check
12-12Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
Strategically Located Union Members
• Importance of jobs held by union members significantly affects union power
• Few strategically located union members may exert disproportionate amount of power
• Truckers or dock workers can affect entire country
12-13Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
Pulling the Union Through
• Put pressure on end user of company’s product
• Strike against four Johnson Controls factories that make interior parts for some of country’s best-selling vehicles
• GM and Chrysler played active behind-the-scenes role by pressuring JCI to settle dispute
12-14Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
Political Involvement
• Political arm of AFL-CIO is Committee on Political Education (COPE)
• Recommends and assists candidates who will best serve its interests
• With friends in government, union in stronger position
• Unions give money to candidates who pledge to help pass pro-labor legislation
12-15Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
Union Salting
• Process of training union organizers to apply for jobs at company
• Once hired, work to unionize• Supreme Court has ruled employers
cannot discriminate against union salts
12-16Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
Flooding the Community
• Union inundates communities with organizers to target particular business
• Unions typically choose companies in which nonunionized employees have asked for help in organizing
• Target weak managers’ departments
12-17Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
Public Awareness Campaigns
• Maneuvers that do not coincide with strike or organizing a campaign to pressure employer
• Alternative to strikes because more employers are willing to replace striking workers
• Employers have less recourse
12-18Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
Building Organizing Funds
• AFL-CIO asks affiliates to increase organizing funds
• May increase funding to organizing institute, which trains organizers
• Launches advertising campaign to create wider public support
12-19Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
Partnering with High Schools
• Some high schools are partnering with labor unions to prepare students for a career
• Students are going from learning situation to learning situation
• Creates a fast-track educational experience
12-20Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
Organizing Younger Workers
• Major strategy now being pursued by union organizers
• In the past, younger organizers were sometimes considered second-class citizens
12-21Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
Organizing Through Card Check
• Employees sign non-secret card of support if they want unionization
• If 50% of workforce plus one worker signs a card, union is formed
• Expedited ways of polling workers on union representation
• No secret-ballot election takes place
• Organizations decide to remain neutral
12-22Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
Union Structure
• Local union
• National (or international) union
• American Federation of Labor and Congress of Industrial Organizations (AFL-CIO)
• Change to Win Coalition
12-23Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
Local Union
• Basic element in structure of American labor movement
• Deals with employer on day-to-day basis
12-24Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
Craft and Industrial Unions
• Craft union: Typically composed of members of particular trade or skill in specific locality (i.e., Carpenters and Joiners)
• Industrial union: Consists of all workers in particular plant or group of plants (i.e., United Auto Workers)
12-25Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
National Union
• Composed of local unions, which it charters • Local union, not individual worker, holds
membership in national union • Service Employees International
Union (SEIU) is largest and fastest-growing national union (2.1 million members)
• International Brotherhood of Teamsters has about 1.4 million members
12-26Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
American Federation of Labor and Congress of Industrial Organizations
(AFL-CIO)
• Represents labor interests at highest level
• Does not engage in collective bargaining
• Financed by member national unions• Has little formal power or control
• Central trade union federation in U.S.
12-27Copyright © 2014 Pearson Education, Inc.
Copyright © 2014 Pearson Education, Inc.
Change to Win Coalition
• Union federation consisting of 7 unions that broke from AFL-CIO
• Formally launched rival labor federation representing about 6 million workers in 2005
• Led by Service Employees International Union • Primary targets for organizing: Industries in
cleaning, health care, hotels and restaurants, retailing, and transportation
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Copyright © 2014 Pearson Education, Inc.
Laws Affecting Collective Bargaining—National Labor Relations Act
• Also called Wagner Act of 1935 • Declared legislative support, on
broad scale, for right of employees to organize and engage in collective bargaining
• Detailed and prohibited 5 management practices deemed to be unfair to labor
12-29
Copyright © 2014 Pearson Education, Inc.
Laws Affecting Collective Bargaining—Labor Management Relations Act
• Also called Taft–Hartley Act of 1947• Revised National Labor Relations Act
• Pendulum had begun to swing toward more balanced position between labor and management
• Extended concept of unfair labor practices to unions
12-30
Copyright © 2014 Pearson Education, Inc.
Revisiting The National Labor Relations Board (NLRB)
• NLRB has recently been thrust into forefront stemming from pattern of controversial decisions
• Some believe that the Board is promoting interests and political agenda of labor unions
12-31
Copyright © 2014 Pearson Education, Inc.
Pay Secrecy
• Employers may violate National Labor Relations Act if they issue verbal or written statements to discourage or prohibit nonsupervisory employees from discussing their pay
• NLRB protects pay dialogues among coworkers as well as conversations about benefits and working conditions
12-32
Copyright © 2014 Pearson Education, Inc.
Collective Bargaining Defined
• The performance of the mutual obligation of the employer and the representative of the employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment, or the negotiation of an agreement, or any question arising there under, and the execution of a written contract incorporating any agreement reached if requested by either party, but such obligation does not compel either party to agree to a proposal or require the making of a concession.
12-33
Copyright © 2014 Pearson Education, Inc.
Bargaining Unit
Consists of employees recognized by employer or certified by administrative agency as appropriate for representation by labor organization for purposes of collective bargaining
12-34
Copyright © 2014 Pearson Education, Inc.
Steps for Forming a Bargaining Unit External EnvironmentInternal Environment
Signing of Authorization
Cards
Petition for
Election
Election Campaign
Election and
Certification
12-35
Copyright © 2014 Pearson Education, Inc.
Signing Authorization Cards
• Document indicating employee wants to be represented by labor organization in collective bargaining
• Determines if there is sufficient interest on part of employees to justify unit
• Evidence of interest when at least 30% of employees sign authorization cards
• Usually need 50% to proceed
12-36
Copyright © 2014 Pearson Education, Inc.
Petition for Election
• After authorization cards signed, petition for election made to regional NLRB office
• NLRB will ordinarily direct that election be held within 30 days
12-37
Copyright © 2014 Pearson Education, Inc.
Election Campaign
• Both union and management usually promote causes actively
• Cannot threaten loss of jobs or benefits
• Cannot misstate important facts
• Illegal to incite racial or religious prejudice
12-38
Copyright © 2014 Pearson Education, Inc.
Election and Certification
• NLRB monitors secret-ballot election
• Board issues certification of results to participants
• If majority of employees vote for union, NLRB will certify
12-39
Copyright © 2014 Pearson Education, Inc.
Collective Bargaining
• Fundamental to management–organized labor relations in United States
• Most union/management agreements in United States are for 3-year period
12-40
Copyright © 2014 Pearson Education, Inc.
Collective Bargaining Process
12-41
Bargaining Issues
Preparing for Negotiation
Negotiating the Agreement
Reaching the Agreement
Negotiation Breakdowns?
Ratifying the Agreement
Administration of the Agreement
Overcoming Breakdowns
EXTERNAL ENVIRONMENTINTERNAL ENVIRONMENT
Yes
No
Copyright © 2014 Pearson Education, Inc.
Bargaining Issues
Document that results from collective bargaining process is a labor agreement or contract.•Recognition•Management rights•Union security•Compensation and benefits•Grievance procedure•Employee security
12-42
Copyright © 2014 Pearson Education, Inc.
Categories of Bargaining Issues
• Mandatory bargaining issues
– Wages, hours, etc.
• Permissive bargaining issues
– May be raised but neither side may insist that they be bargained over
• Prohibited bargaining issues
– Statutorily outlawed
12-43
Copyright © 2014 Pearson Education, Inc.
Recognition
• Appears at the beginning of labor agreement
• Identifies union that is recognized as bargaining representative
• Describes bargaining unit
12-44
Copyright © 2014 Pearson Education, Inc.
Management Rights
Section that is often (but not always) written into labor agreement that spells out rights of management
12-45
Copyright © 2014 Pearson Education, Inc.
Union Security
• Closed shop: Only union members• Union shop: Employees must become members • Maintenance of membership: Must continue
membership until termination of agreement• Agency shop: Nonunion members pay dues • Open shop: Equal terms for union members and
nonmembers• Dues check-off: Company agrees to withhold
union dues
12-46
Copyright © 2014 Pearson Education, Inc.
Compensation and Benefits
• Wage rate schedule• Overtime and premium pay• Jury pay• Layoff or severance pay• Holidays• Vacation• Family care
12-47
Copyright © 2014 Pearson Education, Inc.
Grievance Procedure
• Grievance: Employee’s dissatisfaction or feeling of personal injustice relating to his or her employment
• Grievance procedure: Means by which employees can voice dissatisfaction with specific management actions
12-48
Copyright © 2014 Pearson Education, Inc.
Employee Security
Seniority: Length of time employee has been associated with a company, division, department, or job
12-49
Copyright © 2014 Pearson Education, Inc.
Job-Related Factors
Many rules governing employee actions on job are included
12-50
Copyright © 2014 Pearson Education, Inc.
Preparation for Negotiations
• Union must continuously gather information regarding membership needs to isolate areas of dissatisfaction
• Union steward is normally in best position to collect such data
• Management also spends long hours preparing for negotiations
12-51
Copyright © 2014 Pearson Education, Inc.
Negotiating the Agreement
• Begins with each side presenting initial demands
• Requires give and take
• Each side does not expect to obtain all demands presented
12-52
Copyright © 2014 Pearson Education, Inc.
Trends & Innovations: The Two-Tier Wage System Returns
• Two-tier wage system: Wage structure where newly hired workers are paid less than current employees for performing same or similar jobs
• Major negotiating point in 2011 labor agreement with UAW
Copyright © 2014 Pearson Education, Inc.
Breakdowns in Negotiations
• Third party intervention
• Union strategies for overcoming breakdowns
• Management strategies for overcoming breakdowns
12-54
Copyright © 2014 Pearson Education, Inc.
Third Party Intervention
• Mediation: Neutral party comes in when impasse is reached
• Arbitration: Impartial third party makes binding decision to settle dispute
• Sources of mediators and arbitrators: FMCS and AAA
12-55
Copyright © 2014 Pearson Education, Inc.
Types of Arbitration
• Rights arbitration: Disputes over interpretation and application of various provisions of existing contract
• Interest arbitration: Disputes over terms of proposed collective bargaining agreements (rarely used in private sector)
12-56
Copyright © 2014 Pearson Education, Inc.
Union Strategies for Overcoming Negotiation Breakdowns: Strikes
• Strikes: Union members refuse to work to pressure management in negotiations
• Strikes halt production, resulting in lost customers and revenue
• Fewer strikes today
• Timing is important
• Unions prefer to strike only as last resort
12-57
Copyright © 2014 Pearson Education, Inc.
Union Strategies for Overcoming Negotiation Breakdowns: Boycotts
• Union members agree to refuse to use or buy firm’s products– Example: Coors– Effect often lasts much longer than strike– Shoppers change buying habits
• Secondary boycott: Union practice to encourage third parties to stop doing business with company – Practice is illegal
12-58
Copyright © 2014 Pearson Education, Inc.
Management Strategies for Overcoming Negotiation Breakdowns: Lockout
• Lockout: Management keeps employees out• Operate by placing management and nonunion
workers in striking workers’ jobs• Effective when:
– Management dealing with weak union– Union treasury is depleted– Business has excessive inventories
• Type of industry involved has considerable effect on impact of this maneuver
12-59
Copyright © 2014 Pearson Education, Inc.
Management Strategies for Overcoming Negotiation Breakdowns: Continue
Operations Without Striking Workers
• Operate firm by placing management and nonunion workers in striking workers’ jobs
• Type of industry involved has considerable effect on impact of this maneuver
• May live in plant and have food and other necessities delivered to them
Copyright © 2014 Pearson Education, Inc.
Reaching the Agreement
• Document that emerges from collective bargaining process is a “labor agreement” or “contract”
• Regulates relationship between employer and employees
• Essential but difficult task
12-61
Copyright © 2014 Pearson Education, Inc.
Ratifying the Agreement
• May be more difficult for union• Until approved by majority of union
members, proposed agreement not final
• Approval process for management is easier
12-62
Copyright © 2014 Pearson Education, Inc.
Administration of the Agreement
• Larger and perhaps more important part of collective bargaining
• Seldom viewed by public
• Agreement establishes union-management relationship for duration of contract
12-63
Copyright © 2014 Pearson Education, Inc.
Grievance Procedure in a Union Environment
• Normally well defined • Usually restricted to violations of
terms and conditions of agreement • Multistep grievance procedure is most
common type
12-64
Copyright © 2014 Pearson Education, Inc.
Recent Executive Orders That Impact Federal Government
Contractors • EO 13496: Must post notices informing
employees of rights to form and join unions • EO 13494: No reimbursement for funds spent on
influencing employees regarding unionization • EO 13495: Must provide job opportunities to
employees of previous service contractor • EO 13502: Government construction projects in
excess of $25 million must have project labor agreement requiring union work force
12-65
Copyright © 2014 Pearson Education, Inc.
Collective Bargaining in the Public Sector
• EO 10988: Established basic framework for collective bargaining in federal government
• Title VII of Civil Service Reform Act of 1978 regulates most of labor management relations in federal service.
• Establishes Federal Labor Relations Authority (FLRA) to bring public-sector model in line with private sector
12-66
Copyright © 2014 Pearson Education, Inc.
Union Decertification
• Essentially reverse of process that employees must follow to be recognized as official bargaining unit
• Employees have used decertification petitions with increasing frequency and success
12-67
Copyright © 2014 Pearson Education, Inc.
Decertification Procedure
• Rules established by NLRB: – At least 30% must petition for election
– Petition submitted 60–90 days prior to expiration of current contract
– Decertification election scheduled
– If majority of votes against union, employees will be union free
12-68
Copyright © 2014 Pearson Education, Inc.
Unions Today
• Percent of wage and salary workers who are members of a union is 11.8%
• 7.6 million public sector employees belonged to union, compared with 7.2 million union workers in private sector
12-69
Copyright © 2014 Pearson Education, Inc.
A Global Perspective: Labor Unrest in China
• ACFTU has begun to put pressure on foreign-invested enterprises to establish unions and sign collective contracts
• Two years after strikes and suicides that rocked manufacturers in China, labor problems are again occurring. Strikes appear to be occurring daily