Understanding LaborManagement Relations Chapter 11 11 Chapter THE

Understanding Labor-Management Relations Chapter 11 11 Chapter THE FUTURE OF BUSINESS Gitman & Mc. Daniel 5 th Edition Prepared by Deborah Baker Texas Christian University Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved

Learning Goals 1 What is the historical development of American labor unions? 2 What role did federal law play in the development of the union-management relationship? 3 What is the union organizing process? 4 What is the collective bargaining process, and what key issues are included in the union contract? 5 How do employees file a grievance? Chapter 11 6 What economic tactics do unions and employers use in labor-management conflicts? 7 What trends will affect American workers and labor-management relations? Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 2

Principles of Labor-Management Relations Labor Union Chapter 11 Collective Bargaining An organization that represents workers in dealing with management over disputes involving wages, hours, and working conditions The process of negotiating labor agreements that provide for compensation and working arrangements mutually acceptable to the union and to management Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 3

The Labor Relations Process 3. Day-to-Day administration of agreement 2. Negotiating a labor agreement Chapter 11 1. Union organizing Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 4

1 Learning Goal 1 Chapter 11 What is the historical development of American labor

Chapter 11 1 Emergence of Unions and Collective Bargaining American Federation of Labor 1881 Craft unions Congress of Industrial Organizations 1935 Industrial unions AFL-CIO 1955 Merger of AFL and CIO Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 6

The Labor Movement Today 1 Collective bargaining Local Unions Worker relations / member services Community / Political activities Chapter 11 National and International Unions AFL-CIO Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 7

Chapter 11 1 Union Membership Trends, 1955 -2003 Copyright © 2005 by South-Western, a

2 Learning Goal 2 Chapter 11 What role did federal law play in the development of the union-management relationship? Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 9

2 The Legal Environment of Unions Norris-La. Guardia Act of 1932 The Anti-Injunction Act Chapter 11 § Banned the use of injunctions to prevent strikes § Made yellow-dog contracts unenforceable Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 10

2 The Legal Environment of Unions Wagner Act of 1935 National Labor Relations Act Chapter 11 § Encouraged the formation of unions and the use of collective bargaining § Provided a means for resolving disputes over union representation § Protected workers from unfair labor practices Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 11

2 The Legal Environment of Unions Taft-Hartley Act of 1947 Chapter 11 Labor-Management Relations Act § Defined unfair union practices § Outlined the rules for dealing with strikes of major economic impact § Broadened employer options for dealing with unions § Further defined the rights of employees as individuals Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 12

Chapter 11 2 The Legal Environment of Unions Mediation A method of attempting to settle labor disputes using a specialist as a “go-between. ” Conciliation A method of attempting to settle labor disputes using a specialist as a mediator. Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 13

2 The Legal Environment of Unions Landrum-Griffin Act of 1959 Labor-Management Reporting and Disclosure Act § Deals with the internal affairs of labor unions –Bill of rights for members –Rules for electing union officials –Safeguards to help make unions financially sound Chapter 11 § Requires that unions file annual financial reports Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 14

3 Learning Goal 3 Chapter 11 What is the union organizing process? Copyright ©

Benefits Stressed by Unions 3 Almost Always Stressed Seldom Stressed Grievance procedures More influence in decision making Higher-quality products Job security Better working conditions Technical training Improved benefits Higher pay Chapter 11 Often Stressed Lobbying opportunities Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved More job satisfaction Increased production 16

3 Employer Arguments Against Unionization § An employee can come directly to management § You will pay monthly dues of $15 to $30 § Merit-based decisions are better than seniority-based § Pay and benefits are similar to the industry’s leading firms Chapter 11 § We meet all health and safety standards of OSHA § Performance and productivity are more important than union representation in determining pay raises Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 17

Chapter 11 3 Union Organizing Process Copyright © 2005 by South-Western, a division of

4 Learning Goal 4 Chapter 11 What is the collective bargaining process, and what key issues are included in the union contract? Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 19

Chapter 11 4 Process of Negotiating Labor Agreements Copyright © 2005 by South-Western, a

The Union Contract 4 Union Security Management Rights Wages Chapter 11 Issues covered in the Union Contract Job Benefits Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved Job Security 21

Union Security Chapter 11 4 Closed Shop Only union members can be hired Union Shop Nonunion workers can be hired, but they must join the union Agency Shop Does not require workers to join the union Open Shop Workers can work at a unionized company without having to join the union Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 22

Benefits 4 § Higher wages for overtime, holiday work, and less desirable shifts § Insurance programs § Payment for certain nontime work § Pensions Chapter 11 § Income-maintenance plans Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 23

5 Learning Goal 5 Chapter 11 How do employees file a grievance? Copyright ©

Grievance and Arbitration Chapter 11 5 Grievance A formal complaint, filed by the employee or by the union, charging that management has violated the contract Arbitration The process of settling a labormanagement dispute by having a third party make a decision, which is binding on both the union and the employer Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 25

The Grievance Procedure 5 Step 1: oral presentation Employee with grievance Step 2: grievance in writing Chapter 11 Step 3: higher-level grievance meeting Step 4: arbitration Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 26

6 Learning Goal 6 Chapter 11 What economic tactics do unions and employers use

Managing Labor-Management Conflict 6 Chapter 11 Union Strategies Employer Strategies § Strike § Lockout § Boycott § Strike replacements § Picketing § Mutual-aid pact § Corporate campaign § Shift production Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 28

7 Learning Goal 7 Chapter 11 What trends will affect American workers and labor-management

7 Trends in Labor-Management Relations Effort to reverse the decline in union memberships Shortages of skilled labor in the unionized crafts Chapter 11 Layoffs in several highly-unionized industry sectors Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved 30