1. Enhancing Union-Management Relations
Chapter Eleven
Enhancing
Union-Management
Relations
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2. Learning Objectives Explain how and why labor unions came into being.
Discuss the sources of unions’ negotiating power and trends in union membership.
Identify the main focus of several major pieces of labor-management legislation.
Enumerate the steps involved in forming a union and show how the National Labor Relations Board is involved in the process.
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3. Learning Objectives (cont’d)
Describe the basic elements in the collective-bargaining process.
Identify the major issues covered in a union-management contract.
Explain the primary bargaining tools available to unions and management.
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4. 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
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5. 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 1886
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6. 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
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7. 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
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8. Historical Overview of Unions
Source: U.S. Bureau of Labor Statistics, Union Membership, accessed October 9, 2008.
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9. 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
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10. 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
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11. 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
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12. 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
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13. 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
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14. Labor-Management Legislation (cont’d)
Landrum-Griffin Act (1959)
Regulates the internal functioning of unions to preserve their integrity and democratic nature
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15. 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
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16. Steps in Forming a Union
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17. 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
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18. Steps in Forming a Union (cont’d)
The Role of the NLRB
Overseeing organizing campaign
Conducting the election
Certifying the results
Monitoring questionable behavior
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19. 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
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20. 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
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21. 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
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22. 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
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23. 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
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24. 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
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25. Steps in Resolving a Grievance
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26. 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
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27. 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
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28. 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
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