In-Depth Notes on Collective Bargaining and Labor Relations

Learning Objectives

• 14-1: Define collective bargaining and labor relations.

• 14-2: Identify goals of society, management, and labor unions in labor relations.

• 14-3: Explain how the legal environment impacts labor relations.

• 14-4: Describe major labor-management interactions including organizing, contract negotiations, and contract administration.

• 14-5: Explain new, less adversarial strategies for labor-management relations.

• 14-6: Discuss the impact of competitive challenges (like globalization) on labor-management interactions.

• 14-7: Compare labor relations in the public and private sectors.

The Labor Relations Framework

Dunlop’s Industrial Relations Systems (LO 14-1)

• A successful industrial relations system includes:

  • Environmental Context: Influences from legal frameworks and market conditions.

  • Participants: Employers, employees, unions, and government.

  • Web of Rules: Policies guiding interactions and negotiations.

  • Ideology: Underlying beliefs about labor relations.

  • Allows for conflict resolution through collective bargaining, mediation, and arbitration.

Katz and Kochan's Level of Decisions

1. Strategic Level: Long-term decisions affecting overall company's labor relations approach.

2. Functional Level: Departmental or divisional decisions aligning with strategic goals.

3. Workplace Level: Day-to-day decisions impacting labor relations directly.

Goals and Strategies

Society's Perspective (LO 14-2)

• Collective bargaining enhances equality in bargaining power between workers and employers.

• Institutionalizes industrial conflict, providing a structured method for addressing disputes.

Management’s Perspective

• Decisions to discourage or encourage unionization.

• Addresses collective, rather than individual, employee issues.

Labor Unions’ Perspective

• Serve as a formal voice for workers regarding wages, safety, and welfare conditions.

Typical Provisions in Collective Bargaining Contracts

• Establishment and Administration:

  • Agreements on duration, grievance procedures, arbitration, strikes, and contract enforcement.

• Functions, Rights, and Responsibilities:

  • Clauses related to management rights, safety, health, hours, and work rules.

• Wage Determination:

  • Structures for wage adjustments, incentives, and classifications.

• Job Security:

  • Policies regarding hiring, layoffs, training, and promotion.

• Employee Benefits:

  • Health insurance, pension plans, and leave allocations.

Union Structure, Administration, and Membership

Types of Unions

• National and International Unions:

  • Examples include AFL-CIO, which advocates for labor policies but is not a union itself.

Local Unions

• Engage in daily negotiations and represent individual members’ interests including elections and strike votes.

Membership Trends

• Notable decline in union membership due to economic shifts, employer resistance, and legislative changes.

Legal Framework (LO 14-3)

Key Legislation

• 1935 Wagner Act:

  • Promoted collective bargaining, tripled union membership, and protected worker rights.

• Exclusions from NLRA include independent contractors, supervisors, agricultural laborers, and government employees.

Concerted Activity & Unfair Labor Practices

• Concerted actions can occur in non-union environments to advocate for better conditions.

• Unfair practices by both employers and unions are regulated by laws, and enforced by the National Labor Relations Board (NLRB).

Union and Management Interactions

Organizing

• Employees may join unions primarily due to dissatisfaction with current employment conditions prompting a desire for collective representation.

• Union Representation Elections:

  • Require 30% employee signatures to initiate; conducted through secret ballot.

  • NLRB determines eligibility and oversees fair election processes.

Contract Negotiation

• Types of Bargaining:

  • Distributive: Competitive negotiation focusing on dividing fixed resources.

  • Integrative: Win-win negotiation exploring shared interests.

• Stages of negotiation involve presenting proposals, decision-making, reaching agreements, and potential strikes if negotiations fail.

Contract Administration

• Grievance Procedures:

  • Define how disputes over contracts are managed, often involving steps from employee discussions to arbitration.

• The duty of fair representation ensures unions adequately represent member interests during grievances.

Labor Relations Outcomes

Strikes and Worker Satisfaction

• Strikes are increasingly involving white-collar workers but are considered exceptions. Unions influence benefits significantly, while promotions commonly align with seniority leading to varied job satisfaction levels.

Union Influence on Performance

• Union presence can have mixed effects on productivity and profitability, often leading to higher costs for management.

The International Context

Global Union Membership

• The US has a lower unionization rate compared to many other countries but still maintains a significant workforce representation through unions. Differences in operational practices exist between countries due to variations in union strength and legal requirements.

The Public Sector

Union Status and Growth

• Strong growth in public-sector unions due to legal changes, though federal-level strikes are generally prohibited.

Nonunion Representation Systems

• A large majority of workers belong to nonunion systems that lack the enforcement and independence characteristic of unions.