Chapter 15

COLLECTIVE BARGAINING
AND LABOR RELATIONS

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• What Do I Need to Know?
LO 15-1 Define unions and labor relations and their role in
organizations.
LO 15-2 Identify the labor relations goals of management, labor
unions, and society.
LO 15-3 Summarize laws and regulations that affect labor
relations.
LO 15-4 Describe the union organizing process.
LO 15-5 Explain how management and unions negotiate
contracts.
LO 15-6 Summarize the practice of contract administration.
LO 15-7 Describe new approaches to labor-management
relations.

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• Role of Unions and Labor Relations 1 of 6
• Labor unions were formed for the purpose of
representing their members’ interests and
resolving conflicts with employers.
• Manage conflict between employer and employee
• Labor relations
• Labor relations strategy
• Negotiating contracts
• Administering contracts

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• Role of Unions and Labor Relations 2 of 6

National and International Unions

– Most Union members belong to a national or
international union that may be:
– Craft union: members all have a particular skill or
occupation.
– Industrial union: members are linked by their work in a
particular industry.
– Most national unions are affiliated with the American
Federation of Labor and Congress of Industrial
Organizations (AFL-CIO).

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• Role of Unions and Labor Relations (3 of 6)

Local Unions
– Most day-to-day interaction between labor and
management involves the local union.
– Membership in the local union depends on the type of
union.
– Members elect officials and vote on resolutions to
strike.
– Union steward - elected by union members to
represent them in ensuring that the terms of the
contract are enforced

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• Role of Unions and Labor Relations 4 of 6

Trends in Union Membership

– Peaked in the 1950s, now at 11.1% overall and 6.7%
of private-sector employment
– Most of the decline has been in the private sector
because of:
• Change in the structure of the economy
• Management efforts to control costs
• Human resource practices
• Government regulation

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• Figure 15.1 Union Membership Density among
U.S. Wage and Salary Workers

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• Figure 15.2 Union Membership Rates and Coverage in
Selected Countries

Note: Data for 2014.Source: Organisation for Economic Co-operation and

Development, OECD.Stat, https://stats.oecd.org, accessed June 13, 2016.

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• Role of Unions and Labor Relations 5 of 6

Unions in Government
– Union membership among government workers has
remained strong
– Executive Order 10988 established collective
bargaining rights for federal employees
– Strikes are illegal for federal workers and for state
workers in most states.
– At the local level, almost all states prohibit strikes by
police and firefighters.

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• Role of Unions and Labor Relations 6 of 6

Impact of Unions on Company Performance

– Although there is evidence that unions have both
positive and negative effects on productivity, most
studies have found that union workers are more
productive than nonunion workers.
– On average, union members receive higher wages
and more generous benefits than nonunion workers,
and evidence shows that unions have a large
negative effect on profits.

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• Impact of Unions on Company Performance

Harley-Davidson and the

International Association
of Machinists and
Aerospace Workers have
cooperated to produce
good results. In general,
companies wishing to
become more
competitive need to
continually monitor their
labor relations strategies.

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• Goals of Management, Labor Unions, and Society 1 of 4

Management Goals
• Increase the organization’s profits
• Keep labor costs low, raise output and keep
organization’s operations flexible.

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• Goals of Management, Labor Unions, and Society 2 of 4

Labor Union Goals

• Obtain pay and working conditions that satisfy and
give members a voice in decisions that affect them.
• Unions achieve results by gaining power in numbers.
• Union membership is linked to better compensation
and benefits.
• Two-tier wage structures
• Contract provisions that are critical to a union’s
security and viability:
• Check-off provisions
• Union membership or contribution provisions

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• Goals of Management, Labor Unions, and Society
Checkoff Provision
Contract provision under
which the employer, on
behalf of the union,
automatically deducts union
dues from employees’
paychecks.
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3 of 4
Membership Security
• Closed shop
• Union shop
• Agency shop
• Maintenance of
membership rules
• Goals of Management, Labor Unions, and Society 4 of 4

Societal Goals
• Society’s values drive laws and regulations that affect
labor unions.
• Society’s goal for unions is to ensure that workers have
a voice in how they are treated by their employers.

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• Laws and Regulations Affecting Labor Relations 1 of 3

National Labor Relations Board (NLRB):

Section 7 protects the following activities:
– Union organizing
– Joining a union
– Going out on strike
– Refraining from activity on behalf of the union
Most employees in the private sector are covered by
the NLRA

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• Laws and Regulations Affecting Labor Relations 2 of 3

Laws Amending the NLRA

– Landrum-Griffin Act of 1959
– Taft-Hartley Act of 1947
• Right-to-work laws: State laws that make union shops,
maintenance of membership, and agency shops illegal.
• Employees should be free to join a union or not.

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• Figure 15.3 States with Right-to-Work Laws

Source: National Labor Relations Board, “Employer/Union Rights and Obligations,” Rights We Protect, https://www.nlrb.gov, accessed June 13,
2016.

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• Test Your Knowledge 1 of 2
True (A) or False (B)

1. NLRA established unfair labor practices on the part of the

union.
2. NLRB determines which states are Right-to-Work
3. In Right-to-Work states, employees do not have to
become members of the union
4. In states without Right-to-Work laws unions can refuse to
hire non-union members.
5. Protection from union misconduct was established by the
Landrum-Griffin Act.

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• Laws and Regulations Affecting Labor Relations 3 of 3

National Labor Relations Board (NLRB)

– A five-member board, the general counsel, and 52
regional and other field offices
– Functions:
• to conduct and certify representation elections
• to prevent unfair labor practices
– Representation elections
– Prevention of unfair laborpractices

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• Union Organizing 1 of 3

The Process of Organizing

• 30% of the employees must sign an authorization
card
• Secret-ballot election
• Consent election
• Stipulation election

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• Table 15.1 What Supervisors Should and
Should
Not
What Do to Discourage Unions 1 of 2
To Do:
Report any direct or indirect signs of union activity to a core management group.
Deal with employees by carefully stating the company’s response to pro-union arguments.
These responses should be coordinated by the company to maintain consistency and to
avoid threats or promises. Take away union issues by following effective management
practices all the time:
Deliver recognition and appreciation.
Solve employee problems.
Protect employees from harassment or humiliation.
Provide business-related information.
Be consistent in treatment of different employees.
Accommodate special circumstances where appropriate.
Ensure due process in performance management.
Treat all employees with dignity and respect.

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• Table 15.1 What Supervisors Should and
Should
Not Do to Discourage Unions 2 of 2
What To Avoid:
Threatening employees with harsher terms and conditions of employment or employment
loss if they engage in union activity.
Interrogating employees about pro-union or anti-union sentiments that they or others may
have or reviewing union authorization cards or pro-union petitions.
Promising employees that they will receive favorable terms or conditions of employment if
they forgo union activity.
Spying on employees known to be, or suspect of being, engaged in pro-union activities.

Source: Excerpted from J.A. Segal, “Unshackle Your Supervisors to Stay Union Free,” in HR Magazine, June 1998. Copyright © 1998, Society for Human Resource
Management, Alexandria, VA. Used with permission. All rights reserved.

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• Union Organizing 2 of 3

Union Strategies
• Organizers call or visit employees at home to talk
about issues like pay and job security.
• Offer workers associate union membership.
• Conduct corporate campaigns.
• Negotiate employer neutrality and card-check
provisions into a contract.

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• Union Organizing 3 of 3

Decertifying a Union
• Taft-Hartley Act made it possible for employees
to decertify a union
• May not take place when a contract is in effect

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• Collective Bargaining 1 of 4
• Negotiation between union representatives and
management representatives to arrive at a contract
defining conditions of employment for the term of the
contract and to administer that contract.
• Typical contracts include provisions for pay, benefits,
work rules, and resolution of workers’ grievances.
• Bargaining structure varies.

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• Table 15.2 Typical Provisions in Collective Bargaining
Contracts 1 of 3
Establishment and Contract duration and reopening and renegotiation provisions.
administration of the Grievance procedures.
agreement Arbitration and mediation.
Strikes and lockouts.
Contract enforcement.
Functions, rights, and Management rights clauses.
responsibilities Subcontracting.
Union activities on company time and premises.
Union-management cooperation.
Regulation of technological change.
Advance notice and consultation.
Wage determination and Rate structure and wage differentials.
administration Incentive systems and production bonus plans.
Production standards and time studies.
Job classification and job evaluation.
Wage adjustments—individual and general.

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• Table 15.2 Typical Provisions in Collective Bargaining
Contracts 2 of 3
Job or income security Hiring and transfer arrangements.
Employment and income guarantees.
Supplemental unemployment benefit plans.
Regulation of overtime, shift work, etc.
Reduction of hours to forestall layoffs.
Layoff procedures; seniority; recall.
Promotion practices.
Training and retraining.
Relocation allowances.
Severance pay and layoff benefit plans.
Plant operations Work and shop rules.
Rest periods and other in-plant time allowances.
Safety and health.
Hours of work and premium pay practices.
Shift operations.
Hazardous work.
Discipline and discharge.

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• Table 15.2 Typical Provisions in Collective Bargaining
Contracts 3 of 3
Paid and unpaid leave Vacations holidays, sick leave.
Funeral and personal leave.
Military leave and jury duty.
Employee benefit plans Health and insurance plans.
Pension plans.
Profit-sharing, stock purchase, and thrift plans.
Bonus plans.
Special groups Apprentices and learners.
Workers with disabilities.
Veterans.
Union representatives.

Source: Adapted from T.A. Kochan, Collective Bargaining and Industrial Relations (Homewood, IL: Richard D. Irwin, 1980), p. 29. Original data from J.W. Bloch,
“Union Contracts – A New Series of Studies,” Monthly Labor Review 87 (October 1964), pp. 1184-85.

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• Collective Bargaining 2 of 4

Bargaining Over New Contracts

– Preparation includes
– Establishing objectives for the contract
– Reviewing the old contract
– Gathering data (such as compensation paid by
competitors and the company’s ability to survive a
strike)
– Predicting the likely demands to be made
– Establishing the cost of meeting the demands

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• Test Your Knowledge:
Which is an Unfair Labor Practice (ULP)?

1. Enforcing disciplinary policies only to those who have

expressed interest in a union
2. Showing employees articles about negative aspects of
unions that occurred elsewhere
3. Email employees asking them to respond with how they
plan to vote in the union election
4. Tell employees the disadvantages of having a union
5. Enforcing disciplinary policies when deserved to a pro-
union employee
6. Promise employees an additional week of vacation if
they vote against the union

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• Collective Bargaining 3 of 4
Work Stoppages Alternatives to Strikes
• Strike: a collective • Mediation
decision by union • Fact Finder
members not to work until • Arbitration
certain demands or
conditions are met.
• In a lockout, the employer
excludes workers from the
workplace until they meet
certain conditions.

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• Collective Bargaining 4 of 4
Alternatives to Work Stoppages

Mediation Fact Finder Arbitration

Conflict resolution Third party to Conflict resolution
procedure in which a collective bargaining procedure in which an
mediator hears views who reports reasons arbitrator or
of both sides and for a dispute, views arbitration board
facilitates negotiation and arguments of determines a binding
process but has no both sides, and settlement.
formal authority to possibly a
dictate a resolution. recommended
settlement, which
parties may decline.

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• Figure 15.4 Work Stoppages Involving 1,000
or More Workers

Note: Because strikes are most likely in large bargaining units, these numbers represent most lost working time in the United States.
Source: Bureau of Labor Statistics, “Work Stoppage Data,” http://data.bls.gov, accessed June 13, 2016.
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• Contract Administration
Contract Administration
Carrying out agreement’s
terms and resolving conflicts
over interpretation or
violation of the agreement.
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Grievance Procedure
Process for resolving union-
management conflicts over
interpretation or violation of
a collective bargaining
agreement.
• Figure 15.5
Steps in an
Employee-
Initiated
Grievance
Procedure

Jump to Appendix 6 long image

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• Test Your Knowledge 2 of 2
True (A) or False (B)

1.Mediation requires each party to abide by the mediator’s

decision.
2.Clearly written contracts require less contract
administration time due to fewer disagreements over
interpretation.
3.Integrative bargaining involves a win-lose approach
because the issues are considered a fixed pie.
4.A union steward represents the issues concerning union
employees and is elected by them.

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• New Approaches to Labor Relations 1 of 2

Labor-Management Cooperation
– Traditionally, two sides are adversaries.
– Now more cooperation between labor and
management
– NLRB supports employees’ involvement in work
teams and decision making.

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• New Approaches to Labor Relations 2 of 2

Nonunion Representation Systems

– Management-established systems
– Worker center
• A nonprofit organization offering its members services such
as training, legal advice, lobbying, and worker advocacy

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• Summary 1 of 2
• A union is an organization formed for the purpose of
representing its members in resolving conflicts with
employers.
• Labor relations is the management specialty
emphasizing skills that managers and union leaders can
use to minimize costly forms of conflict and to seek win-
win solutions to disagreements.
• Management goals are to increase organization’s
profits. Managers generally expect that unions will make
these goals harder to achieve.

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• Summary 2 of 2
• Labor unions have the goal of obtaining pay and
working conditions that satisfy their members. They
obtain these results by gaining power in numbers.
• Society’s values have included the hope that existence
of unions will replace conflict or violence between
workers and employers with fruitful negotiation.
• In contrast to traditional view that labor and
management are adversaries, some organizations and
unions work more cooperatively.

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