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WEEK 5 LABOR RELATIONS BUSN 102 – Özge Can The Role of Labor Unions 12-2 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 Unionization: Employee’s Perspective 12-3 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 Unionization: Management’s Perspective 12-4 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 Outcome of Unionization 5 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 Unionization in Historical Perspective 12-6 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 Unionization in Historical Perspective 12-7 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 Types of Unions 12-8 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 How Unions Are Structured? 12-9 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 How Unions Are Structured? 12-10 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 The Union Organizing Process 12-11 The Collective Bargaining Process 12-12 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 The Collective Bargaining Process 12-13 The Collective Bargaining Process 12-14 Negotiating an Agreement 12-15 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 When Negotiations Break Down: Labor Options 12-16 When Negotiations Break Down: Management Options 12-17 Labor Options 12-18 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 Management’s Options 12-19 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 Grievance, Discipline, and Arbitration Procedures 12-20 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 Grievance, Discipline, and Arbitration Procedures 12-21 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 Grievance, Discipline, and Arbitration Procedures 12-22 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 Labor Movement Today 12-23 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) Next Week’s Topic: 24 Marketing as a Concept Read: Chapter 13: The Art and Science of Marketing