WEEK 5

LABOR RELATIONS

BUSN 102 – Özge Can

The Role of Labor Unions

Labor Relations The relationship between organized labor and

management (in its role as the representative of company ownership)

Labor Unions Organizations that represent employees in

negotiations with management

Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

12-2

Unionization: Employee’s Perspective

Higher compensation Greater benefits Influence over hiring, promotions, and layoffs Working conditions and workplace safety Formal processes for employee grievances,

discipline, and other matters Solidarity and recognition

Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

12-3

Unionization: Management’s Perspective

Management wants to: Minimize costs to maximize profits Higher flexibility and productivity – but union

contracts often include work rules

Work Rules: A common element of labor contracts that

specifies such things as the tasks certain employees are required to do or are forbidden to do

Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

12-4

Outcome of Unionization

Negative or positive outcome?

It depends on your perspective: For example, higher wages is clearly a

negative outcome for shareholders/owners but a positive outcome for workers and the communities they live in

5

Unionization in Historical Perspective Early guides in Europe that gave craftspeople

bargaining power over merchants Industrial revolution in the second half of

1800s Great Depression in 1930s

Repeated strikes and protests over very low wages, unsafe working conditions, abusive management practives, long hours, child labor

12-6

Unionization in Historical Perspective Legislations regarding labor relations policies and

procedures for most sectors of industry Legislations addressing many concerns raised by

business owners Legislations designed to ensure democratic

processes and financial accountability within unions

12-7

Types of Unions

Craft Unions Offer membership to

workers with a specific craft or skill, such as carpentry, masonry, or electrical work

Industrial Unions Seek to represent all

workers at a given employer or location, regardless of profession or skill level

12-8

How Unions Are Structured? Locals: Local unions that represent employees in a

specific geographic area or facility

National Union: A nationwide organization composed of many local unions that represent employees in specific locations

They are responsible for: Organizing in new areas and industries,

negotiating industrywide contracts, assisting locals with negotiations, administrating benefits, lobbying, lending support for strikes

12-9

How Unions Are Structured? International Unions: Have members in more than

one country Ex: Service Employees International Union (SEIU)

Labor Federations: Give unified voice for political activities and membership drives worldwide

Ex: AFL, CIO

12-10

The Union Organizing Process

12-11

The Collective Bargaining Process Collective Bargaining

A negotiation between union and management negotiators to forge the human resources policies that will apply to all employees covered by a contract

Collective Bargaining Agreements (CBAs) Contracts that result from collective bargaining =

Labor Contract It is a compromise between the desires of the union

members and those of management

12-12

The Collective Bargaining Process

12-13

The Collective Bargaining Process

12-14

Negotiating an Agreement

Mediation Use of an impartial third party to help resolve

bargaining impasses to study the situation, explore new options, improve communication and make recommandations

Arbitration A decision process in which an impartial referee

listens to both sides and then makes a judgment by accepting one side’s view

Compulsory or voluntary arbitration

12-15

When Negotiations Break Down: Labor Options12-

16

When Negotiations Break Down: Management Options12-

17

Labor Options

Strike A temporary work stoppage aimed at forcing

management to accept union demands Boycott

A pressure action by union members and sympathizers who refuse to buy or handle the product of a target company

Injunction A court order that requires one side in a dispute to

refrain from or engage in a particular action Also: slowdowns and sickouts

12-18

Management’s Options

Strikebreakers Nonunion workers hired to do the jobs of striking

workers Lockout

A decision by management to prevent union employees from entering the workplace

used to pressure the union to accept a contract proposal

Injunctions

12-19

Grievance, Discipline, and Arbitration Procedures

Unfair Labor Practices: Unlawful acts made by either unions or management

By employers: Threatening employees with termination or cuts in benefits if they

vote for a union or engage in any other activity protected by laws Threatening to close a facility if employees vote for union

representation Interrogating employees about union sympathies or activities in

ways that could “interfere with, restrain, or coerce” employees trying to exercise their legal rights

Punishing employees for unionization activity by transferring them, giving them more difficult work assignments, or terminating them

12-20

Grievance, Discipline, and Arbitration Procedures

Grievance: A formal complaint against an employer

Substantial reasons include: Clarifying details of the contract Addressing alleged contract violations by the

employer Laying the ground work for future contract

negotiations Contesting management decisions

12-21

Grievance, Discipline, and Arbitration Procedures Progressive Discipline: An escalating process of

discipline that gives employees several opportunities to correct performance problems before being terminated Usually starts with an oral warning for the first offense,

followed by a written warning, then another written warning and suspension without pay, and finally termination

Arbitrating Disputes: Arbitration can also be used to interpret or apply the provisions of the labor aggreement. Disputes over wages, seniority, terminations, employee

discipline, job posting and the use of subcontractors

12-22

Labor Movement Today

Conflicts within the union or between unions Decreasing union memberships Proposed legislation that would significantly alter

the union election provisions, making it easier or more difficult for unions to organize groups of workers (Ex: Employee Free Choice Act in the US)

12-23

Next Week’s Topic:

Marketing as a Concept

Read: Chapter 13: The Art and Science of Marketing

24