Understanding Unionization and Collective Bargaining & Ensuring Fair Treatment and Legal Compliance

Lecture 10
Understanding Unionization
and Collective Bargaining
&
Ensuring Fair Treatment and
Legal Compliance
PREPARED BY:
MS.KOMLAVATHI
SCHOOL OF BUSINESS MARKETING
L E C T U R E 10 : Understanding Unionization and Collective Bargaining &
Ensuring Fair Treatment and Legal Compliance
Understanding Unionization and

Collective Bargaining
Slide 2 of 63
Chapter Outline
• The Strategic Importance of Unionization and Collective Bargaining
• The Historical Context and Unions Today
• The Organizing Campaign
• The Collective Bargaining Process
• Negotiating the Agreement
• Conflict Resolution
• Contract Administration
• Assessment of Collective Bargaining
Slide 3 of 63
The HR Triad Extended
Line Managers HR Professionals

•Know and appreciate historical •Train line managers in unionization
context and current contract rights of employees
•Understand why employees join •Develop policies and programs that
unions support good working conditions
•Support HR efforts for good •Survey employee attitudes
working conditions
•Work with line managers to deal
•Manage with respect and equality effectively with union
representatives
•Know what can and cannot be said
during an organizing campaign •Develop mechanisms for effective
complaint resolution
•Develop effective relationships
with union representatives •Move along issues such as TQM and
QWL
•Participate in resolving grievances
•Work with managers in the
grievance process
Slide 4 of 63
The HR Triad Extended (cont’d)
Employees Unions
•Present views about working •Seek to represent employees’
conditions, wages, hours to HR views to company
and line managers
•Offer to work with management to
•Bargain in good faith improve company profitability and
survival
•Fulfill rights and responsibilities in
union contract •Bargain with line managers and HR
•Use mechanisms for grievances as •Seek improvements in conditions
appropriate and wages
•Be aware of issues management •Adapt to local conditions and
and labor leaders are discussing changes in technology and the
economy
•Stay involved in grievance process
as appropriate •Ensure grievances are processed
fairly
Slide 5 of 63
Strategic Importance of Unionization

• Unionization
– Efforts by employees and outside agencies (unions) to act as a single
unit when dealing with management over issues related to their work
• Conditions for union formation:
– Dissatisfaction
– Lack of power
– Union instrumentality
Slide 6 of 63
Unionization and Collective Bargaining

within an Integrated HR System
HR Activities
• Recruitment,
Retention Management Efforts Collective
• Total Bargaining
Compensation Process
• Training Attraction to
• Negotiating
• Safety and Health Unionization
Union • Conflict
• Decision to join
Certification Resolution
• Decision Not to
Global Environment Join • Contract
Administration
Organizational
Environment Union Efforts
Slide 7 of 63
Collective Bargaining
• Negotiation of the contract that is

basis for employee-employer
relationships
• Contract administration, including
interpretation and enforcement of
the contract and resolution of
conflicts
Slide 8 of 63
Process of Union Organizing
Individual personality,
interests, and preferences
Expectations for work

•Employment contract
•Psychological contract
Influence of
Satisfaction Work Situation
management
Dissatisfaction with work

Attempt to resolve
situations
situation individually
Union Instrumentality
Unionization
Slide 9 of 63
Historical Context & Unions Today
The Early Days:
• Craft unions
• Successful strikes for wages
• Susceptibility to Depressions
Today:
• Membership decline
• Increasing diversification in membership
Slide 10 of 63
Structure of American Unions
AFL-CIO
(American Federation of Labor
and Congress of Industrial Organizations)
National Unions National Unions
Local Unions Local Unions
Business Representative: Steward: Employee elected by

Full-time employee to handle work unit to act as union
grievances and contract representative
negotiation
Slide 11 of 63
Organizing Campaign
1. Union contact with employees
2. Union campaign for authorization cards
3. Request for election
4. Determination of bargaining unit by NLRB
5. Pre-election campaign
6. Elections
7. Certification of union / start of

collective bargaining
Slide 12 of 63
Unfair Labor Practices by Employers
• Misrepresenting the facts about union or its officers

• Threatening employees who support unionization
• Promise benefits or rewards for employees who oppose union activity
• Make unscheduled changes in wages, hours, benefits or working conditions
• Conduct surveillance activities
• Interrogate workers
• Prohibit solicitation
Slide 13 of 63
What Employers Can Discuss with Employees

• History and facts of unionization
• Own experiences with unions
• Costs of union membership and the benefits they receive without a union
• That union representation won’t protect against discharge for cause
• That the company prefers to deal directly with employees
• That the company is not obligated to sign contract or accept all union’s
demands
• That unions often resort to work stoppages
• The company’s legal right to hire replacements
Slide 14 of 63
Collective Bargaining Process
Adversarial Cooperative
Relationship Relationship
Slide 15 of 63
Processes of Bargaining
• Distributive bargaining
• Integrative bargaining
• Concessionary bargaining
• Continuous bargaining
• Inter organizational bargaining
Slide 16 of 63
Distributive Bargaining Process
Union Management
Initial Demand Point
Target Point Resistance Point

Settlement
Range
Resistance Point Target Point
Initial Offer Point
Slide 17 of 63
Negotiating the Agreement
Negotiating Preparation
Committees for bargaining
Negotiating Issues for

Structure negotiation
Slide 18 of 63
Negotiating Structures
• Multiemployer and Industry-wide Bargaining:

– A single union negotiates with several, similar companies
• Pattern Settlements
• Wide-area and Multicraft
Bargaining:
– Done on regional basis (less opportunity for whipsawing)
Slide 19 of 63
Preparation for Bargaining
• Management Strategies
– Prepare specific proposals for change in the contract language
– Determine the general size of economic package
– Prepare statistical displays and data
– Prepare the bargaining book for use by negotiators
• Union Strategies
– Collect information on:
• Financial situation of the company and its ability to pay
• Attitude of management on issues
• Attitudes and desires of employees
Slide 20 of 63
Issues for Negotiation

• Mandatory Issues
– Wages
– Hours
– Other terms and conditions of employment
• Permissive Issues (If parties agree)
– Price
– Product design
– New jobs
• Prohibited Issues
– Illegal or outlawed activities such as a demand that the employer use
only union-produced goods
Slide 21 of 63
Issues for Negotiation

• Administrative Issues
• Total Compensation
• Employee Benefits and Services – Breaks and cleanup time
• Hours of Employment – Job security
• Institutional Issues – Seniority
– Union security – Discharge/Discipline
– Check off – Safety and Health
– Strikes – Production standards
– Managerial Prerogatives – Grievance procedures
– Training
– Duration of the agreement
Slide 22 of 63
Factors Affecting Bargaining

• Mythical Fixed Pie
– Trade-offs between issues of different value to each side often should
be explored
• Framing
– Negotiators can reframe situation in
terms of “gains” rather than “losses”
Slide 23 of 63
Conflict Resolution Possibilities
• Strikes and lockouts

• Slowdowns
• Primary
• Boycotts
• Mediation
• Arbitration
• Strikes
— Usually follows voting by membership to strike
— Union members commonly refuse to cross picket line of another striking union
— Employers can try to continue operations and can legally hire replacements
— Success depends on ability to cause economic hardship
Slide 24 of 63
Conflict Resolution
• Mediators
– A neutral third party who cannot impose a solution
– Facilitates negotiations between union and management
– May use “attitudinal structuring”
– Must have trust of both parties
– Federal Mediation and Conciliation Service provides mediators
• Arbitration
– Neutral third party whose determination is binding on the disputing
parties
– Final-offer arbitration
• Arbitrators must chose between final offer of each party
– Interest arbitration
• Deals with contract terms and conditions
• More common in public sector
Slide 25 of 63
Contract Administration
• Grievance procedures
• Grievance issues
• Management procedures
• Union procedures
Sources of Grievances
• Outright violation of contract
• Disagreement over:
– Facts
– Meaning of agreement
– Method of applying agreement
– Fairness or reasonableness of actions
Slide 26 of 63
Steps in Grievance Procedure
Go to arbitration
Meet with union executives

and top management
Meet with management

(Industrial Relations)
Meet with supervisor

Employee contacts steward
Slide 27 of 63
Grievance Issues
• Discipline and discharge are most common issues reaching arbitration
• Other issues:
– Calculation of seniority
– Compensation for
• Time away from work
• Vacations, holidays
• Sick leave
– Wage and work schedules
Slide 28 of 63
Defensible Disciplinary Procedures

• Employee adequately warned of consequences
• Rule is related to company operation
• Thorough investigation is undertaken
• Penalty is reasonable
• Just cause and fairness characterize decisions
Slide 29 of 63
Unfair Representation by Union

• Improper motives
– Union refuses to process grievance because of race, gender, or
employee’s attitude toward union
• Arbitrary conduct
– Not investigating merit of grievance
• Gross negligence
– Reckless disregard of employee’s interests
• Union conduct after filing grievance
– Must process to reasonable conclusion
Slide 30 of 63
Assessment of Collective Bargaining

• Effectiveness of negotiations
– Duration of negotiations
– Outcome of member ratification votes
– Frequency and duration of strikes
– Use of mediation and arbitration
– Need for government intervention
– Quality of union-management relations
• Effectiveness of grievance procedures
– Frequency of grievances
– Level at which grievances settled
– Frequency of strikes or slowdowns
– Rates of:
• Absenteeism
• Turnover
• Sabotage
• Necessity for government intervention
Slide 31 of 63
Assessment of Collective Bargaining

• Effectiveness of arbitration
– Acceptability of decisions
– Satisfaction of parties
– Degree of innovation
– Absence of bias
– Avoidance of strikes
Slide 32 of 63
Ensuring Fair Treatment and Legal

Compliance
Slide 33 of 63
Outline
• The Strategic Importance of Managing Human Resources

• A Framework for Managing Human Resources Through Strategic Partnership
• The Human Resources Triad
• Looking Ahead: Four Current Challenges
• P.S.: What Are Human Resources?
• The strategic importance of fairness and legal compliance
• What fairness means to employees
• Legal means to ensure fair treatment
• Diversity initiatives for ensuring fair treatment
• Challenges for the 21st century
Slide 34 of 63
The Strategic Importance of Fairness and Legal Compliance
• Managers seek to maximize profits on behalf of shareholders….
• But businesses operate in complex environments.
Slide 35 of 63
Business and the Environment

• Effective businesses address the concerns of many stakeholders….
– Society
– Labor Force
– Legal Institutions
Slide 36 of 63
Society and Fairness
• Society’s definition of “fair

treatment” is in constant flux.
• Its definition varies in different

cultures
• Laws, government agencies and

courts offer guidelines.
• Complying with laws is not

enough.
Slide 37 of 63
Concerns of the Labor Force
• “Fairness creates the feeling of trust that’s needed to hold a good

workplace together.”
• Employees express their concerns:
– When they choose an employer
– When they decide to stay or leave
– Through surveys and grievance systems
– Through labor union participation
Slide 38 of 63
The HR Triad, Fairness and Legal Compliance
Line Managers HR Professionals Employees

•Be informed •Stay current on legal •Be informed
•Set policy in issues •Work with HR to
collaboration with HR •Set policy with establish procedures
•Follow due process managers •Report illegal
•Respond to employee •Encourage managers behaviors
concerns to adopt societal •Accept responsibility
views to behave fairly
•Intervene if observe
illegal behavior •Balance •Educate employees
employer/employee from other cultures
•Keep accurate rights
records
•Administer dispute
resolution
Slide 39 of 63
What Fairness Means to Employees
• Distributive Justice
– Comparison of personal outcomes with the outcomes of others
• Procedural Justice
– Perceptions about fairness in the process
• Interactional Justice
– Whether managers are sensitive, polite, respectful, and employees are

given sufficient information
Slide 40 of 63
Reactions to Unfair Treatment
• Quit
• Stay and accept the situation
• Seek revenge
• Talk to others in the

organization
• Complain to external
authorities
Slide 41 of 63
Legal Means to Ensure Fair Treatment

• Constitutional Laws
• Common Laws
• Statutory Laws
• Administrative Regulations
• Executive Orders
Slide 42 of 63
U.S. Constitution
• The fundamental law of the land
• The 14th Amendment is especially relevant to employment:
– Guarantees due process when the state takes actions involving life,
liberty and property of citizens.
Civil Rights Act–Title VII

• Prohibits discrimination by employers, employment agencies, and unions.
• On the basis of
– Race  Color  Religion  Sex
– National Origin  Pregnancy
• Applies to businesses with
15 or more employees.
Slide 43 of 63
State Laws
• Must be consistent with Federal law.
• May apply to smaller businesses than Federal laws.
• May offer greater protection to employees (e.g. sexual orientation).
• State laws may precede Federal laws.
Administrative Regulations
• Rules, guidelines, and standards that government agencies
produce to enforce the law.
• Equal Employment Opportunity Commission (EEOC)
• Occupational Safety and Health Administration (OSHA)
• National Labor Relations Board (NLRB)
Slide 44 of 63
Executive Orders Common Law

• Presidential orders specifying rules • The set of rules made by judges
and conditions for doing business with as they resolve disputes
the government. – Interpretations of laws by
• Examples: judges set precedents used
– Prohibition of discrimination by to decide new cases.
Federal agencies and contractors. – Supreme Court rulings carry
– Merit employment policies in the most weight.
Federal government.
Slide 45 of 63
Settling Disputes
• Options for resolving disputes outside of court:
– Company grievance procedures
– Mediation and arbitration
– On-line dispute resolution
Using the Courts to Settle Disputes

• Monetary Damages:
– Compensatory damages
– Punitive damages
• Settlement Agreements:
– No admission of wrongdoing
– Money paid to plaintiff
Slide 46 of 63
Company Grievance Procedures

• Encourage employees to voice concerns
• First used in unionized settings
• Now exist in more than 50% of America’s largest companies
• Can lower legal costs and increase employee loyalty
Slide 47 of 63
Mandatory Arbitration Pros and Cons

• Pros • Cons
– Quick dispute resolution – Employees may relinquish
– Lower costs rights to trial; may deter
– Balances employee/employer some from accepting
power differences employment.
– Professional arbitrators – Availability may encourage
claims.
– Disputes stay private
– Courts may provide more
– No unpredictable jury awards consistency in interpretation
– May improve employee relations of law.
– Monetary remedies may be
too small.
– May not deter others from
undesirable behaviors.
Slide 48 of 63
On-Line Dispute Resolution

• New software allows both parties to view mediator’s proposals for
resolution, see notes from each party, keep track of issues, and utilize a
chat line.
• Little known is about the software’s effectiveness so far.
Slide 49 of 63
Diversity Initiatives for Ensuring Fair Treatment
• Policies and practices adopted voluntarily to ensure all members of a

diverse workforce feel they’re treated fairly.
• May address concerns of groups that have no legal protections.
• Aim is culture characterized by respect, equal access, and merit-based

decisions.
Slide 50 of 63
Fairness Must be Reciprocated

• Employees should: • Companies should:
– Act with integrity – Uphold integrity
– Understand/comply with – Articulate standards and
laws and rules rules clearly
– Safeguard the firm’s – Provide support in legal and
reputation ethical decisions
– Maintain confidentiality. – Refuse to tolerate illegal or
unethical conduct
Slide 51 of 63
Challenges of the 21st Century
• Harassment
• Employment-at-Will
• Employee privacy
• Fairness in the global context
Slide 52 of 63
Harassment in the Workplace

• Harassment is conduct that creates a hostile, intimidating, or offensive work
environment.
or
• Unreasonably interferes with an individual’s work.
or
• Adversely affects an individual’s employment opportunities.
Slide 53 of 63
Preventing and Reporting Harassment

• Employers are liable for acts of those who work for them
– They need to have explicit, detailed anti-harassment policies and
grievance procedures
– Employees should use available procedures to keep legal rights.
– Having and enforcing “zero tolerance” policy protects an employer.
Current Legal Standard for Evaluating Harassment

• Would a “reasonable person” in the same or similar circumstances find the
conduct intimidating, hostile or abusive?
• EEOC regulations require an environment free of harassment based on sex,
race, color, religion, national origin, age or disability.
Slide 54 of 63
Sexual Harassment
• Remarks or behavior of a sexual nature are defined as harassment if:
– Submission to such conduct is tied directly to an individual’s
employment;
– Submission to such conduct is used as the basis for employment
decisions affecting that individual; or
– Such conduct has the effect of interfering with an individual’s work
performance or creating a hostile work environment.
Slide 55 of 63
Employment-at-Will
• Employment-at-Will
– A company’s right to terminate employees for any reason.
• Regulations that curtail employment-at-will:
– Civil Rights Act
– Age Discrimination in Employment Act
– Americans with Disabilities Act
– National Labor Relations Act
• Procedural Justice
– Emphasized in most court decisions
– Termination should be last in series of documented steps
– Steps ensure employee understood problems and had chance to
improve
– WARN Act: 60 day notice of plant/office closure
Slide 56 of 63
Employment-at-Will (cont’d)
• Implied Contracts
– Employee-held beliefs regarding conditions of employment
– Beliefs may be based on verbal assurances given by managers.
– Explicit contracts clearly state company policy.
– Some employers require signed waivers when severance packages
given to prevent wrongful discharge suits.
Slide 57 of 63
Reasons to Terminate Employees

• Acceptable Reasons
– Incompetence that is not responsive to training/accommodation
– Gross/repeated insubordination
– Repeated lateness/unexcused absences
– Illegal behavior/drug activity/drunkenness OTJ
– Verbal Abuse
– Physical violence
• Unacceptable Reasons
– Whistle blowing
– Reporting illegal company actions or cooperating in a legal
investigation
– Filing workers’ compensation claim
– Engaging in concerted activity to protest wages, working conditions,
safety hazards
– Engaging in lawful union activity
– Refusing an assignment because of a reasonable belief it is dangerous
Slide 58 of 63
Employee Privacy
• Employee Privacy
– The right to keep information about ourselves to ourselves.
• Regulations that Protect Privacy:
– Privacy Act (Applies to Federal Agencies)
– Freedom of Information Act
– Fair Credit and Reporting Act
– Employment Polygraph Protection Act
– Employee Exposure and Medical Records Regulation
Slide 59 of 63
Privacy: Access to Personal Health Information

• Americans with Disabilities Act (ADA)
– Medical examination may only be given after conditional job offer.
– All medical records should be kept separate and confidential.
• Employers can penalize, refuse to hire or terminate because of conditions
associated with high health care costs.
Privacy: Personal Genetic Information

• Challenges to Personal Privacy
– Some employers may want to use genetics to predict employee health.
– Federal legislation prohibiting use of genetic information for staffing
decisions
has been proposed.
Slide 60 of 63
Privacy: Monitoring Communications
• Technology makes monitoring easy and unobtrusive
– Companies can monitor e-mail, voice-mail, use video, and other

devices.
– Informing employees and claims of “business necessity” make

monitoring more defensible.
Slide 61 of 63
Fairness Issues in the Global Context
• Work Conditions and Pay

– Other countries may provide more or less legal protection
– Economic and social differences create inequities and ethical
challenges
• Terminations and Layoffs
– Other countries have costly employer obligations
– May be required to have “social plan”
• Managing H1-B Visa Holders
– Visas granted to limited number of skilled workers from abroad
– Poor economy may require that workers to leave the country.
Slide 62 of 63
Conclusion: Fair Treatment and Legal Compliance
• Legal compliance is the first step
• Effective managers who are sensitive to employee perceptions and to

the broader social fabric:
– Anticipate employee reactions
– Personally respect employees
– Elicit positive attitudes from employees
Slide 63 of 63

Understanding Unionization and Collective Bargaining & Ensuring Fair Treatment and Legal Compliance

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Lecture 10

Understanding Unionization and

• The Historical Context and Unions Today

• The Organizing Campaign

• The Collective Bargaining Process

• Negotiating the Agreement

• Assessment of Collective Bargaining

The HR Triad Extended

Line Managers HR Professionals

The HR Triad Extended (cont’d)

Strategic Importance of Unionization

Unionization and Collective Bargaining

• Negotiation of the contract that is

Process of Union Organizing

Expectations for work

Dissatisfaction with work

Historical Context & Unions Today

The Early Days:

• Successful strikes for wages

• Increasing diversification in membership

Structure of American Unions

National Unions National Unions

Local Unions Local Unions

Business Representative: Steward: Employee elected by

1. Union contact with employees

2. Union campaign for authorization cards

3. Request for election

4. Determination of bargaining unit by NLRB

7. Certification of union / start of

Unfair Labor Practices by Employers

• Misrepresenting the facts about union or its officers

What Employers Can Discuss with Employees

Collective Bargaining Process

• Inter organizational bargaining

Distributive Bargaining Process

Initial Demand Point

Target Point Resistance Point

Initial Offer Point

Negotiating the Agreement

Negotiating Issues for

• Multiemployer and Industry-wide Bargaining:

Preparation for Bargaining

Issues for Negotiation

Issues for Negotiation

Factors Affecting Bargaining

Conflict Resolution Possibilities

• Strikes and lockouts

Steps in Grievance Procedure

Meet with union executives

Meet with management

Meet with supervisor

Defensible Disciplinary Procedures

Unfair Representation by Union

Assessment of Collective Bargaining

Assessment of Collective Bargaining

Ensuring Fair Treatment and Legal

• The Strategic Importance of Managing Human Resources

The Strategic Importance of Fairness and Legal Compliance

• Managers seek to maximize profits on behalf of shareholders….

• But businesses operate in complex environments.

Business and the Environment

Society and Fairness

• Society’s definition of “fair