1

Chapter

14

Collective Bargaining and Labor

Relations

After reading this chapter, you should be able to:

Describe what is meant by collective bargaining and labor
relations.
Identify the labor relations, goals of management, labor unions,
and society.
Explain the legal environment's impact on labor relations.
Describe the major labor-management interactions: organizing,
contract negotiations, and contract administration.
Chapter

14

Collective Bargaining and Labor

Relations

Describe the new, less adversarial approaches to labor-

management relations.
Explain how changes in competitive challenges (e.g., product-
market competition and globalization) are influencing labor-
management interactions.
Explain how labor relations in the public sector differ from
labor relations in the private sector.
 The Labor Relations Framework
Competitive
Challenges
- Legal
- Stakeholder needs
- High-performance
work systems

Goals Union Membership

- Employees and unions and Relative
- Management Bargaining Power
- Society

Union and Management

Union Structure and Interactions Goal Attainment
Administration - Organizing - Employees and unions
- Negotiating - Management
- Administering - Society
 The Labor Relations Framework
John Dunlop suggested a
labor relations system that
consists of four elements:
 An environmental context
 Participants
 A web of rules
 Ideology
 Goals and Strategies
 Society
 Labor unions' major benefit to society throughout history has
been the balancing of power and the institutionalization of
industrial conflict in the least costly way.
 The National Labor Relations Act (NLRA, 1935) sought to
provide a legal framework conducive to collective bargaining.
 Management
 Must decide whether to encourage or discourage the
unionization of its employees.
 Labor Unions
 Seek to give workers formal representation in setting the
terms and conditions of employment.
 Union Structure, Administration,
and Membership
 National and International Unions
 Craftunions
 Industrial unions

 Local Unions
 Responsible for the negotiations of a contract as well as the
day-to-day administration of the contract, including the
grievance procedure.
 AFL-CIO
 Not a union but rather an association that seeks to advance the
shared interest of its member unions at the national level.
 Union Security

Checkoff
Provision
Right-to- Closed
Work Laws Shop

Maintenance Union
of Membership Shop
Agency
Shop
Union Membership and Bargaining
Power
Reasonsfor the consistent decline of union
membership in the U.S. include:
 Structural Changes in the Economy
 Increased Employer Resistance

 Substitution with HRM

 Substitution by Government Regulation

 Worker Views

 Union Actions
Legal Framework
 The 1935 NLRA enshrined collective
bargaining as the preferred mechanism for
settling labor-management disputes.
 Section 7 of the NLRA: employees have

the "right to self-organization, to form,

join, or assist labor organizations, to
bargain collectively through
representatives of their own choosing, and
to engage in other concerted activities for
the purpose of collective bargaining."
 Unfair Labor Practices (ULPs)
 TheNLRA prohibits certain activities by both employers
and labor unions:
 Employers cannot interfere with, restrain, or coerce
employees in exercising their Section 7 rights.
 Employers cannot dominate or interfere with a union.

 Employers may not discriminate against an individual for

exercising his or her right to join or assist a union.

 Employers may not discriminate against employees for

providing testimony relevant to enforcement of the NLRA.

 Employers cannot refuse to bargain collectively with a

certified union.
 Unfair Labor Practices - Unions
Originally the NLRA did not list any
union unfair labor practices. These
were added by the 1947 Taft-Hartley
Act.
The 1959 Landrum-Griffin Act further

regulated unions’ actions and their

internal affairs
 i.e.financial disclosure and conduct of
elections.
 Enforcement
The National Labor Relations Board (NLRB) has
the primary responsibility for enforcing the NLRA.
 The NLRB is a five-member board appointed by the
president. Additionally, there are 33 regional offices.
 The NLRB has two major functions:
 To conduct and certify representation elections.
 To prevent unfair labor practices.

 ULP charges are filed at and investigated by the regional

offices.
Why Do Employees Join Unions?
Virtuallyevery decision to join a
union focuses on two questions?
 Is there a gap between pay, benefits,
and other conditions of employment
that employees actually receive versus
what they believe they should receive?
 If such a gap exists, is it sufficiently

large enough to motivate employees to

remedy the situation?
 The Process and Legal Framework
of Organizing
An election may be held if at least 30 percent of the
employees in the bargaining unitsign authorization
cards.
A secret ballot election will be held. The union is
certified by the NLRB if a simple majority of
employees vote for it.
A decertification election may be held if no other
election has been held within the year or if no contract
is in force.
 Certain categories of employees cannot be included in
bargaining units.
 Organizing Campaigns
The NLRB may set aside the results of an election if
the employer has created an atmosphere of confusion
or fear of reprisals.
Associate union membership is a form of union

membership in which the union receives dues in

exchange for services but does not provide
representation in collective bargaining.
Corporate campaigns seek to bring public, financial,

or political pressure on employers during the

organizing and negotiating process.
 The Negotiation Process

Distributive
Bargaining
- win/lose
Intraorganizational Integrative
Bargaining Bargaining
- conflicting objectives of - win/win
different factions
Attitudinal
Structuring
- relationship
and trust
 Preparing Managers for
Negotiations
Seven steps:
 Establish interdepartmental contract objectives.
 Review the old contract.

 Prepare and analyze data.

 Anticipate union demands.

 Establish the costs of various possible contract

provisions.
 Make preparations for a strike.

 Determine the strategy and logistics.

 Negotiation Stages and Tactics
 The early stages may include many
individuals, as union proposals are
presented.
 During the middle stages, each side makes

decisions regarding priorities, theirs and

the other parties'.
 In the final stage, momentum may build

toward settlement or pressure may build

as an impasse becomes more apparent.
May involve interaction with negotiators
or facilitators.
Management’s Willingness to Take
a Strike
Thefollowing factors help determine whether
management is able to take a strike:
 Product Demand
 Product Perishability

 Technology

 Availability of Replacement Workers

 Multiple Production Sites and Staggered Contracts

 Integrated Facilities

 Lack of Substitutes for the Product

Alternatives to Strikes
Mediation - Has no formal
authority to force a solution; acts
as a facilitator for the parties.
Fact finder - Investigates and

reports on the reasons for the

dispute and both sides' positions.
Arbitration - A process through

which a neutral party makes a final

and binding decision.
 Grievance Procedure
 The negotiation process typically occurs every three years.
 Negotiation processes and administration processes are linked.
 The effectiveness of grievance procedures may be judged on
three criteria:
 How well are day-to-day problems resolved?
 How well does the process adjust to changing circumstances?
 In multi-unit contracts, how well does the process handle local
contract issues?
 The duty of fair representation is mandated by the NLRA and
requires that all bargaining-unit members, whether union
members or not, have equal access to and appropriate
representation in the grievance process.
 Grievance Procedure
 Arbitration is a final and binding step.
 Criteria arbitrators use to reach decisions include:
 Did the employee know the rule and the consequences of
violating it?
 Was the rule applied in a consistent and predictable way?
 Were the facts collected in a fair and systematic way?
 Did the employee have the right to question the facts and
present a defense?
 Does the employee have the right of appeal?
 Is there progressive discipline?
 Are there mitigating circumstances?
New Labor Management Strategies
There are signs of a transformation from
an adversarial approach to a less
adversarial and more constructive
approach to union-management relations.
 The transformation includes increasing
worker involvement and participation and
reorganizing work to increase flexibility.
Union leaders have frequently resisted
such change, fearing an erosion of their
influence.
 Labor Relations Outcomes
 Strikes

 Wages and Benefits

 In2000, private-sector unionized workers received, on average,
wages that were 19 percent higher than nonunion counterparts.
 Productivity
 Some argue that unions increase productivity, while other argue that
they decrease productivity.
 Studies have concluded that union workers are more productive than

nonunion workers although the explanation is unclear.

 Profits and Stock Performance
 These may suffer under unionization if costs are raised.
The International Context
 The United States has both the largest
number of union members and the
lowest unionization rate of any
Western European country or Japan.
 The growing globalization of markets

will continue to put pressure on labor

costs and productivity.
 The United States differs from

Western Europe in the degree of

formal worker participation in
decision-making.
 The Public Sector
During the 1960s and 1970s, unionization in the
public sector increased dramatically.
As of 2003, 37 percent of government employees

were covered by a union contract, and 42 percent

of all government employees were covered by a
collective bargaining contract.
Strikes are illegal at the federal level and in many

states for government workers.