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Copyright © Cengage Learning. All rights reserved Chapter Eleven Enhancing Union-Management Relations 11 | 1
Copyright © Cengage Learning. All rights reserved Learning Objectives 1.Explain how and why labor unions came into being. 2.Discuss the sources of unions’ negotiating power and trends in union membership. 3.Identify the main focus of several major pieces of labor-management legislation. 4.Enumerate the steps involved in forming a union and show how the National Labor Relations Board is involved in the process. 11 | 2
Copyright © Cengage Learning. All rights reserved Learning Objectives (cont’d) 5.Describe the basic elements in the collective-bargaining process. 6.Identify the major issues covered in a union- management contract. 7.Explain the primary bargaining tools available to unions and management. 11 | 3
Copyright © Cengage Learning. All rights reserved Union-Management Relations Labor union –An organization of workers acting together to negotiate their wages and working conditions with employers Union-management (labor) relations –The dealings between labor union and business management, both in the bargaining process and beyond it 11 | 4
Copyright © Cengage Learning. All rights reserved The Historical Development of Unions Early history –Craft union Organization of skilled workers in a single craft or trade Limited to a single city; lasted for a short time –Knights of Labor Formed as a secret society Goals: to eliminate depersonalization of worker resulting from mass production; to improve moral standards of employees and society Lost public favor after Haymarket riot of | 5
Copyright © Cengage Learning. All rights reserved The Historical Development of Unions (cont’d) Early history (cont’d) –American Federation of Labor (AFL) Samuel Gompers’ goal: to improve members’ living standards Used the strike as an effective labor weapon –Industrial Workers of the World (IWW) A radical movement to overthrow capitalism 11 | 6
Copyright © Cengage Learning. All rights reserved The Historical Development of Unions (cont’d) Evolution of contemporary labor organizations –Industrial union An organization of both skilled and unskilled workers in a single industry –Congress of Industrial Organizations (CIO) Formed by industrial unions that withdrew from the AFL –AFL-CIO Both labor groups agreed to merge in 1955 to gain strength and stop fighting each other over the right to represent particular groups of employees 11 | 7
Copyright © Cengage Learning. All rights reserved Historical Overview of Unions 11 | 8 Source: U.S. Bureau of Labor Statistics, Union Membership, accessed October 9, 2008.
Copyright © Cengage Learning. All rights reserved Organized Labor Today Union membership –Approx. 15.5% of the nation’s workers belong to unions –AFL-CIO The largest union with approx 9 million members Includes actors, barbers, construction workers, carpenters, retail clerks, musicians, teachers, postal workers, painters, steel and iron workers, firefighters, bricklayers, newspaper reporters –Teamsters Independent labor organization with approx 1.4 million members –United Auto Workers (UAW) Represents employees in the automobile industry with approx 640,000 members Part of AFL-CIO 11 | 9
Copyright © Cengage Learning. All rights reserved Organized Labor Today (cont’d) Membership trends –Union membership has declined steadily since 1980 –Heavily unionized industries have been decreasing or not growing as fast as nonunionized industries –Firms have moved from unionized areas (Northeast, Great Lakes region) to less unionized areas (Southeast, Southwest) –Largest employment growth is in service industries, which are typically not unionized –Some companies are moving manufacturing to other (less unionized) countries –Management is providing benefits that reduce employees’ need for unionization 11 | 10
Copyright © Cengage Learning. All rights reserved Organized Labor Today (cont’d) Union-management partnerships –The adversarial nature of past union-management relations has given way to limited cooperative partnerships between unions and companies Companies gain increased productivity, improved quality, and reduced costs Workers gain increased response to their needs, more decision-making opportunities, less supervision, more responsibility, and increased job security Unions gain credibility, strength, and increased membership 11 | 11
Copyright © Cengage Learning. All rights reserved Labor-Management Legislation Norris-LaGuardia Act (1932) –Made it difficult for businesses to obtain court orders banning strikes, picketing, and union membership drives National Labor Relations Act / Wagner Act (1935) –Established rights of workers to organize, be represented by a union, and to negotiate with management –Forbids unfair labor practices, particularly those related to unionization –Established the National Labor Relations Board (NLRB) to enforce the act Overseeing union representation elections Investigating complaints filed under the provisions of the act 11 | 12
Copyright © Cengage Learning. All rights reserved Labor-Management Legislation (cont’d) Fair Labor Standards Act (1938) –Set a minimum wage –Requires overtime rates for work in excess of 40 hours a week –Prohibits the use of child labor Labor-Management Relations Act / Taft-Hartley Act (1947) –Balances the union power and management authority –Defines certain union activities as unfair labor practices –Gives management more rights during union organizing campaigns –Gives the president power to obtain a temporary injunction to stop strikes that threaten national health and safety 11 | 13
Landrum-Griffin Act (1959) –Regulates the internal functioning of unions to preserve their integrity and democratic nature Copyright © Cengage Learning. All rights reserved Labor-Management Legislation (cont’d) 11 | 14
Copyright © Cengage Learning. All rights reserved The Unionization Process Why some employees join unions –As a way to combat alienation and loss of personal identity from dull and repetitive jobs –Due to the perception that union membership increases job security –As a way of expressing dissatisfaction with one or more elements of the job –Due to personal background (family history of union membership) –As a requirement to keep a job under provisions of the labor contract between the union and the firm 11 | 15
Copyright © Cengage Learning. All rights reserved Steps in Forming a Union 11 | 16
Copyright © Cengage Learning. All rights reserved Steps in Forming a Union (cont’d) Complicating factors –Bargaining unit The specific group of employees to be represented by the union must be determined –Jurisdiction The right of a particular union to organize particular groups of workers When jurisdictions overlap or are unclear, employees may decide who will represent them 11 | 17
The Role of the NLRB –Overseeing organizing campaign –Conducting the election –Certifying the results –Monitoring questionable behavior Copyright © Cengage Learning. All rights reserved Steps in Forming a Union (cont’d) 11 | 18
Copyright © Cengage Learning. All rights reserved Collective Bargaining The process of negotiating a labor contract with management First contract –Pre-negotiation preparations by both parties –Exchange of initial contract demands by union and company –Bargaining over issues until agreement is reached (or strike) –Agreement is ratified by a vote of the union membership –Agreement is signed and becomes a legally binding agreement (or more negotiation) Later contracts –Pre-negotiation preparations are more intense –Each side may take a harder line on the issues in negotiations –Contract expiration date produces tension 11 | 19
Copyright © Cengage Learning. All rights reserved Union-Management Contract Issues Employee pay –Forms of pay Direct compensation: wage or salary and benefits Deferred compensation: pension and retirement –Magnitude of pay Parity with local and national industry pay levels Real wage protection through cost-of-living clauses Financial condition of employer Cost-sharing for benefits 11 | 20
Copyright © Cengage Learning. All rights reserved Union-Management Contract Issues (cont’d) Employee pay (cont’d) –Pay determinants Management seeks to tie wages to each employee’s productivity Unions feel this creates unnecessary competition and usually suggest pay according to seniority Management seeks to constrain benefits to only some employees Unions want equal application of benefits 11 | 21
Copyright © Cengage Learning. All rights reserved Union-Management Contract Issues (cont’d) Working hours –Overtime Time worked in excess of 40 hours in one week; under some union contracts, time worked in excess of eight hours in a single day Pay is 1½ times the normal hourly wage –Special hourly rates for weekend or holiday work –The right of employees to refuse overtime –Premium pay for workers on less desirable shifts –Starting times –Length of meal periods and work breaks 11 | 22
Copyright © Cengage Learning. All rights reserved Union-Management Contract Issues (cont’d) Security –For the individual Job security: Protection against the loss of employment Seniority –For the union Membership Closed shop: Workers must be union members before they are hired; outlawed by the Taft-Hartley Act Union shop: New employees must join the union after a probationary period Agency shop: Employees can choose not to join the union but must pay dues Maintenance shop: Employees who join the union must remain members as long as they are employed by the firm 11 | 23
Copyright © Cengage Learning. All rights reserved Union-Management Contract Issues (cont’d) Management rights –The firm wants to control whom it hires, how work is scheduled, how discipline is handled –Unions seek to control these matters –Some union executives have been given seats on corporate boards of directors 11 | 24
Copyright © Cengage Learning. All rights reserved Steps in Resolving a Grievance 11 | 25
Copyright © Cengage Learning. All rights reserved Union and Management Negotiating Tools Strikes –Picketing Marching back and forth in front of a place of employment with signs informing the public that a strike is in progress Employees hope to arouse public sympathy and encourage the public not to patronize the firm Nonstriking employees will honor the picket line and not report to work Members of other unions will not cross the picket line –Wildcat strike A strike not approved by the strikers’ union 11 | 26
Copyright © Cengage Learning. All rights reserved Union and Management Negotiating Tools (cont’d) Slowdowns and boycotts –Slowdown Workers report to their jobs but work at a slower pace than normal –Boycott A refusal to do business with a particular firm Primary boycott: aimed at the employer directly involved in the dispute Secondary boycott: aimed at a firm doing business with an employer involved in a labor dispute; prohibited by the Taft-Hartley Act 11 | 27
Copyright © Cengage Learning. All rights reserved Union and Management Negotiating Tools (cont’d) Lockouts and strikebreakers –Lockout A firm’s refusal to let employees enter the workplace –Strikebreaker A nonunion employee who performs the job of a striking union member Mediation and arbitration –Mediation The use of a neutral third party to assist management and the union during their negotiations –Arbitration The use of a neutral third party to decide an issue when the two sides cannot agree 11 | 28
Copyright © 2006 Pearson Education Canada Inc. 8-1 Chapter 8 Managing Human Resources and Labour Relations.
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