BBA III YR.

KATHMANDU
VI SEMESTER
UNIVERSITY

HRM, UNIT - VII

LABOR RELATIONS
&
COLLECTIVE BARGAINING
 LABOR RELATIONS

• Any dealings between management

and workers about employment
conditions.
• Dealings between management and a
workforce that is already unionized,
or has the potential to become
unionized.
 LABOR RELATIONS

•Labor relations is a sub-field of the

human relations career field. People
who become a labor relations
specialist typically have expertise in
economic theory, wage data,
grievances, health care, pensions,
labor union practices, management
practices, and employment law.
 UNIONS AND LABOR RELATIONS
• Unions – organizations formed for
the purpose of representing their
members’ interests in dealing with
employers.
• Unions are based on the following
suppositions:
- Companies are big and powerful.
- Compared to the powerful co.
the worker is weak when alone.
- Power imbalance: “If you don’t
like it, go ahead and quit”.
- Unions equalize the imbalance:
there’s strength in numbers.
• Labor relations – A field which
emphasizes skills that managers
and union leaders can use to
minimize costly forms of conflict
(such as strikes) and seek win-win
solutions to disagreements.
• The workers have the legal right to
cooperate together in seeking better
terms & conditions of employment .
Employers must channelize this right
of workers towards their creative and
meaningful contribution to the office
through healthy labor relations.
 LABOR RELATIONS

• Labor relations involves three levels

of decisions:
1. Labor relations strategy

2. Negotiating contracts

3. Administering contracts
 LABOR RELATIONS

1. Labor relations strategy – For management, the decision involves whether

the organization will work with unions or develop (or maintain) nonunion
operations. For unions, the decision involves whether to fight changes in
how unions relate to the organization or accept new kinds of labor-
management relationships.
2. Negotiating contracts – Contract negotiations in a union setting involve
decisions about pay structure, job security, work rules, workplace safety,
and many other issues. These decisions affect workers’ and the employers’
situation in terms of the contract.
3. Administering contracts – These decisions involve day-to-day activities in
which union members and the organization’s managers may have
disagreements. A formal grievance procedure is typically used to resolve
these issues.
 THE LABOR MOVEMENT

• The term labor movement is a broad

term for the development of a collective
organization of working people, to
campaign in their own interest for better
treatment from their employers and
governments, in particular through the
implementation of specific laws and
regulations governing labor relations.
 THE LABOR MOVEMENT

• Trade unions are collective groups

within societies, organized for the
purpose of representing the interests
of workers and the working class.
Many ruling class individuals and
political groups may also be active in
and part of the labor movement.
 WHY DO WORKERS ORGANIZE?

Solidarity
• To get their fair share of the pie.
- Improved wages, hours, working conditions, and benefits
• To protect themselves from management whims.
Conditions favoring employee organization
• Low morale
• Fear of job loss
• Arbitrary management actions
 UNION SECURITY

• Closed shop
The company can hire only union members. Although this
system has been outlawed since 1947, but it still exists in
some industries.
• Union shop
The company can hire nonunion people, but they must join
the union after a prescribed period of time and pay dues. (If
not, they can be fired).
• Agency shop
Employees who do not belong to the union still must pay
union dues on the assumption that the union’s efforts benefit
all the workers.
 UNION SECURITY

Open shop
It is up to the workers whether or not they join the union - those
who do not, do not pay dues.
Maintenance of membership arrangement
Employees do not have to belong to the union. However, union
members employed by the firm must maintain membership in the
union for the contract period.
Right-to-work laws
The states are entitled to pass statutes or constitutional
provisions banning the requirement of union membership as a
condition of employment and to forbid the negotiation of
compulsory union membership provisions.
 THE TRIANGULAR GOAL

Management Goals

DFFDFD

Labor Union Goals Societal Goals

 THE TRIANGULAR GOAL

• Management goals are to increase the organization’s

profits. Managers generally expect that unions will
make these goals harder to achieve.
• 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 the
existence of unions will replace conflict or violence
between workers and employers with fruitful
negotiation.
 COLLECTIVE BARGAINING

• In collective bargaining a union negotiates on behalf

of its members with management representatives to
arrive at a contract defining:
– Recognition
– Management Rights
– Union Security
– Compensation and Benefits
– Grievance Procedure
– Employee Security
 COLLECTIVE BARGAINING

• What is collective bargaining in good faith?

- Both management and labor are required by law to
negotiate wage, hours, and terms and conditions of
employment “in good faith.”
- Both parties communicate and negotiate.
- They match proposals with counterproposals in a
reasonable effort to arrive at an agreement.
- It does not mean that one party compels another to
agree to a proposal or make any specific concessions.
 COLLECTIVE BARGAINING

Violations of Good Faith Bargaining:

• Surface bargaining
• Inadequate concessions
• Inadequate proposals and demands
• Dilatory tactics
• Imposing conditions
• Making unilateral changes in conditions
• Bypassing the representative
• Committing unfair labor practices during negotiations
• Withholding information
• Ignoring bargaining items
Bargaining Over New Contracts

Types of Collective Bargaining

Distributive Bargaining

Integrative Bargaining

Attitudinal Bargaining

Intraorganizational Bargaining
 Bargaining Over New Contracts

The outcome of contract negotiations can have important consequences

for labor costs, productivity, and the organization’s ability to compete.
Different situations and goals call for different approaches to
bargaining:
•Distributive bargaining: divides an economic “pie” between two sides.
•Integrative bargaining: looks for win-win solutions, or outcomes in
which both sides benefit.
•Attitudinal structuring: focuses on establishing a relationship of trust.
•Intra-organizational bargaining: addresses conflicts within union or
management groups or objectives.
The collective bargaining process may involve any combination of these
alternatives.
 When Bargaining Breaks Down

•Strike

- a collective decision • Alternatives to strike

by union members not - Mediation
to work until certain - Fact Finder
demands or conditions - Arbitration
are met.
 Alternatives to Strikes

Mediation Fact Finder Arbitration

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

• Voluntary (permissible) bargaining items

Items in collective bargaining over which bargaining is neither
illegal nor mandatory—neither party can be compelled against its
wishes to negotiate over those items.
• Illegal bargaining items
Items in collective bargaining that are forbidden by law; for
example, a clause agreeing to hire “union members exclusively”
would be illegal in a right-to-work state.
• Mandatory bargaining items
Items in collective bargaining that a party must bargain over if they
are introduced by the other party—for example, pay.
 Classes of Bargaining Items

• Mandatory = Rates of pay, Hours of employment, Holidays,

Vacation, Pensions, Insurance Benefits, Union Security, Drug
testing of employees, Overtime pay, Job Performance, Profit
sharing plans, etc.
• Permissible = Indemnity bonds, Management rights as to union
affairs, Pension benefits of retired employees, Use of union
level, Settlement of unfair labor changes, Prices in cafeteria,
etc.
• Illegal = Closed shop, Separation of employees based on race,
Discriminatory treatment, etc.
Labor-Management Cooperation

Employee involvement in decision

making

Self-managing employee teams

Labor-management problem-solving
teams
Broadly defined jobs

Sharing of financial gains and business

information with employees
 Labor-Management Cooperation

• The traditional understanding of union-management

relations is that the two parties are adversaries,
meaning each side is competing to win at the expense
of the other. There have always been exceptions to
this approach.
• Cooperation between labor and management may
spell unity and harmony in a work ambiance.
The search for a win-win solution requires that unions
and their members understand the limits on what an
employer can afford in a competitive marketplace.