Unit 7: Labor Relations

and
Collective Bargaining
The Labor Union Movement

•General perception- not good for

employers
•Enrollments- blue collar and white collar,
includes professionals, technical persons,
workers
•General trend- fluctuating

2
The Labor Union Movement

•Why do workers organize?

•What do unions want? What are their
aims?
•What does the law say?
•How to have a win-win situation for both
employers and employees?
•What is the situation in Nepal?

3
The Labor Union Movement

Before 1930 (U.S.A.):

•Local in nature
•Short-termed
•Defense tactics used by management to
discourage unionization, e.g., charge in
court for conspiracy, injunction, yellow
dog contract

4
The Labor Union Movement

Conspiracy:
The combination of two or more persons
who band together to prejudice the rights
of others of society (such as by refusing
to work or demanding higher wages)

5
The Labor Union Movement

Injunction:
A prohibiting legal procedure used by
employers to prevent certain union
activities, such as strikes and unionization
attempts

6
The Labor Union Movement

Yellow-dog contract:
A written agreement between an
employee and a company made at the
time of employment, prohibiting a worker
from joining a union or engaging in union
activities

7
The Labor Union Movement

1870s- Tough period for unions and then

had recognition
1869-The Nobel Order of the Nights of
Labor secret society of Philadelphia
garment workers- then was open for
everyone, membership reached 700000
by mid-80s
1881-Splitting of this union because of
leadership issues- American Federation
of Labor (AFL) 8
The Labor Union Movement

Samuel Gompers-
First president (AFL)-
Principle-pure and simple unionism,
business unionism
Served for 38 years till his death
(except for 1894-95 when he opposed
strike for one company union)

9
The Labor Union Movement

1890- Congress passed the Sherman

Anti-Trust-Act, marking the entrance of
the federal government into the statutory
regulation of labor organizations
1914- Congress passed the Clayton Act
(an amendment to the Sherman Act),
which, according to Samuel Gompers,
was the Magna Carta of Labor- but labor
were more exposed to lawsuits
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The Labor Union Movement

1920s- labor faced legal restrictions on

union activity and unfavorable court
decisions
1926- Railway Labor Act

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The Labor Union Movement

After 1930:
1932- Anti-Injunction Act (Norris
Laguardia Act)-
•Endorsed collective bargaining,
•Approved formation and effective
operation of labor union
•Made injunctions and yellow dog
contracts unenforceable in the federal
courts
12
The Labor Union Movement

1935- National Labor Relations Act

(Wagner Act)
1947- Labor Management Relations Act
(Taft-Hartley Act)
1959- Labor Management Reporting and
Disclosure Act (Landrum-Griffin Act)

13
The Labor Union Movement

Why employees join unions?

•Dissatisfaction with management
• Compensation
• Job security
• The attitude of management
•A social outlet
•Opportunity for leadership (growth,
power)
•Forced unionization
•Peer pressure
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The Labor Union Movement

Why employees join unions?

•Research findings:
Australia-based banking firm-
employer unfairness
(Individuals who believe that the company
rules or policies were administered
unfairly or to their detriment were more
likely to turn to unions as a source of
assistance)
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The Labor Union Movement
What do unions want? Their aims?
•Union security
• Closed shop- hiring only union members
• Union shop- can hire nonunion people but they must
join the union after a prescribed period
• 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
• Preferential shop- union members get preference in
hiring, but the employer can still hire nonunion
members
• Maintenance of membership arrangement-
employees do not have to belong to the union
•Improved wages, hours, working conditions,
employee benefits
16
The union drive and election

Step 1: Initial contact

•The union representative
•Contact guidelines
•Labor relations consultants
•Union salting
•The web

17
The union drive and election

Step 2: Authorization cards

•To provide evidence of sizeable
number of employees interested in
being organized
•Employees sign authorization card
•Both union and management debate
their stands ( unions ensure better
working conditions, management
provides facts and figures, cost of
unionization) 18
The union drive and election

Step 3: Hearing
Step 4: Campaign
Step 5: The election

Decertification elections: to oust their

union

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The collective bargaining process

Collective bargaining:
Representatives of management and
the union meet to negotiate a labor
contract that contains agreements on
specific provisions covering wages,
hours, and working conditions
(negotiation in good faith).

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The collective bargaining process

Good faith collective bargaining:

•Matching of proposals,
•Reasonable efforts to arrive at an
agreement

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The collective bargaining process

When is bargaining not in good faith?

•Proposals and demands- no
advancement of proposals as a positive
factor in determining overall good faith
•Withholding information- failing to
furnish usable information on matters
such as wages, hours, and other terms
of employment that union negotiators
request and legitimately require

22
The collective bargaining process

When is bargaining not in good faith?

•Dilatory tactics- inordinately delaying
the meeting or refusing to meet with the
other party
•Unilateral changes in conditions- sign
of not bargaining with the required
intent of reaching an agreement

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The negotiating team

Preparations from both sides- study the

situation, get data, calculate costs,
make contingent plans/offers,
counteroffers/ arguments

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Bargaining items

•Mandatory bargaining items

•Permissible bargaining items
•Illegal bargaining items
(fig. 9.4)

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Bargaining stages

•Presenting demands from each side

•Reducing of demands (trade offs)
•Forming subcommittee studies
•Reaching an informal settlement and
further discussion with sponsors
•Fine tuning, proof reading and signing
a formal agreement after getting green
signals from sponsors
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Negotiating guidelines

•Set clear objectives- for every

bargaining item
•Do not hurry
•When in doubt, discuss with your
associates
•Be well prepared with firm data
supporting your position
•Always strive to keep some flexibility in
your position 27
Negotiating guidelines

•Don’t just concern yourself with what the

other party says and does; find out ‘why’
•Respect the importance of face saving
for the other party
•Constantly be alert to the real intentions
of the other party with respect not only to
goals but also to priorities
•Be a good listener
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Negotiating guidelines

•Build a reputation for being fair but firm.

•Learn to control your emotions, don’t
panic
•Be sure as you make each bargaining
move that you know its relationship to all
other moves
•Measure each move against your
objectives
•Pay close attention to the wording of
every clause negotiated; words and 29

phrases are often sources of grievances

Negotiating guidelines

•Remember that collective bargaining

negotiations are, by nature, part of a
compromise process
•Consider the impact of present
negotiations on those in future years
•Don’t be so open and straightforward
that you start making excessive
concessions.

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Impasse

•When one party demands more than the

other offers
•Pressure strategy/tactic

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Mediation/ arbitration

•Means of resolving impasses

•Third party involvement
•Mediator- neutral third party, fact finder
•Arbitrator- most definitive type of third
party involvement, may have the power
to decide and dictate settlement terms

32
Strikes

Withdrawal of labor
Types:
•Economic strike- results from a failure to
agree on the terms of a contract- from an
impasse
•Unfair labor practice strikes- protest illegal
conduct by the employer
•Wildcat strike- unauthorized strike occurring
during the term of a contract
•Sympathy strike- supporting another union
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Strikes
Dealing with a strike:
•Shut down the affected area and thus halt their
operations until the strike is over
•Contract out workers during the duration of the strike
in order to blunt the effects of the strike on the
employer
•Continue operations, perhaps using supervisors and
other non-striking workers
•Hire replacements for the strikers
•Corporate campaign by unions
•Lockout
•Injunctive relief- court order compelling a party or
parties either to resume or to desist from a certain
action
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The contract agreement
•Management rights
•Union security and automatic payroll dues deduction
•Grievance procedures
•Arbitration of grievances
•Disciplinary procedures
•Compensation rates
•Hours of work and overtime
•Benefits
•Health and safety provisions
•Employee security
•Contract expiration date

35
Handling grievances:

•Sources- practices, policies, individuals,

work environment/conditions, eg unfair
appraisal, inequitable wages, poor
communication
•Procedure- multi-step process, try to
settle with supervisor, union, if not, then
appeal to higher level
•Contract administration- as per contract

36
 Guidelines for handling grievances:
Do
Investigate and handle every case as
though it may eventually result in an
arbitration hearing
Talk with the employee about his or her
grievance
Require the union to identify the specific
contractual provisions allegedly violated
Comply with the contractual time limits
for handling the grievance
Visit the work area of the grievance
Determine there were any witnesses
Don’t
Discuss the case with the union steward
alone- the grievant should be there
Make arrangements with individual
employees that are inconsistent with the
labor agreement
Admit to the binding effect of a past
practice
Relinquish to the union your rights as a
manager
Settle grievances based on what is ‘fair’,
instead, stick to the labor agreement
Bargain over items not covered by the
contract
37
 Guidelines for handling grievances:

Do Don’t

Examine the personnel record of the Treat as subject to arbitration claims

grievant demanding the discipline or discharge
of managers

Treat the union representative as your Give long written grievance answers
equal

Hold your grievance discussions Trade a grievance settlement for a

privately grievance withdrawal

Fully inform your own supervisor of Deny grievances on the premise that
grievance matters ‘your hands have been tied by
management’
Agree to informal amendments in the
contract
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Why the union decline?

•Decline of blue collar workers, jobs

(emergence of service sector business
and white collar jobs)
•Competition (global)- relocation of
companies to non-union settings
•Mergers and acquisitions
•Cost cutting, lay off

39
How unions are changing?

•Focus on organizing women and

minority workers, temporary and
contingent workers
•Target- multinational companies for
international/ global campaigns
•More coordinating efforts
•Cooperative arrangements with the
employers
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Union free strategies and tactics

Factors reducing chances for union

organizing:
•A conviction by employees that the boss
is not taking advantage of them
•Employees who have pride in their work
•Good performance records kept by the
company. Employees feel more secure
on their jobs when they know their efforts
are recognized and appreciated
41
Union free strategies and tactics

Factors reducing chances for union

organizing:
•No claims of high-handed treatment.
Employees respect firm but fair discipline
•No claim of favoritism that’s not earned
through work performance
•Supervisors who have good
relationships with subordinates- stiffles
organizing attempts
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Union free strategies and tactics

Positive characteristics:
•Competitive pay and strong benefits
•Team environment
•Open communication
•Pleasant work environment
•Avoidance of lay offs

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Union free strategies and tactics

How to acquire positive characteristics?

•Strategy: Establish the strategy long
before a union-organizing attempt begins
(help employees not develop negative
attitudes towards the organization)
•Philosophy: Borrow some of the union’s
philosophy (offer workers equal or better
conditions than they could expect with a
union)

44
Union free strategies and tactics

How to acquire positive characteristics?

•Effective first line supervisors: since they
have more influence over workers, they
should be careful in assigning work,
evaluating them, providing rewards/
punishment, communicating – these
develop attitude towards organization

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Union free strategies and tactics

How to acquire positive characteristics?

•Union-free policy- make such policies
and communicate to everyone, educate
them why such policy exists, how it is
going to help employees
•Effective communication- participative
management, cooperation, team work,
transparency, open-door policy

46
Union free strategies and tactics

How to acquire positive characteristics?

•Trust and openness- participatory
approach, transparency, both ways
feedback
•Effective compensation programs- most
tangible measure, must have higher and
more programs than competitors in order
to remain union free

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Union free strategies and tactics

How to acquire positive characteristics?

•Healthy and safe work environment
•Effective employee and labor relations

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Union free strategies and tactics

Union free
policy
Effective
first line Effective
supervisor communication

Effective Union free

employee organizatio Trust and
and labor n openness
relations

Healthy and Effective

safe work compensatio
environment n programs

49
Origin of trade unions in Nepal

•No trade unions till 1945 (Rana ruling,

closed door economy)
•1946- All Nepal Trade Union Congress
(ANTUC)
•1947- Biratnagar Workers’ Union (BWU),
first workers’ movement for the
establishment of democracy
•1951- ANTUC and BWU united and
formed first trade union federation in
Nepal 50
Origin of trade unions in Nepal

•1953- world Federation of Trade Unions

(WFTU) membership
•Establishment of labor ministry,
department
•Nepal entered International Labor
Organization (ILO)

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Major trade union federations:

•Nepal Trade Union Congress (NTUC)-

1947
•General Federation of Nepalese Trade
Unions (GEFONT)- 1989
•Democratic Confederation of Nepalese
Trade Unions (DECONT)- 1997

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Review of applicants
Very important as it gives background for further
investigation as well as set basis for interview
 Paper or electronic
 One form or combination of various forms
Review of applicants

• Scan the overall appearance of the

application or resume (grammar,
handwriting, spelling, consistency,
information organization, highlights on key
accomplishments, easy language etc)
• Look for any blanks or omissions
• Review the applicant’s work history and
make a note of any time gaps between jobs
• Consider any overlaps in time
• Make a note of any other inconsistencies
Review of applicants

• Consider the frequency of job changes

• Be objective when evaluating a person’s
salary requirements
• Carefully review the applicant’s reasons for
leaving previous jobs
• Make a note to ask for elaboration of duties
that are not clearly described on the
application or resume
• Review the application or resume for ‘red
flags’
Administration of selection tests
Test administration encompasses a number of
components:
 Who should take tests?
 Who should administer tests?
 Test standardization
 Test security
 Language consistency
 Test takers (Who should take tests?)
 Most equitable approach: testing across the board
meaning administration of test to every applicant
applying for the every job
 Hence testing should be administered to each and
every external candidate as well as employee
applying for the job/transfer/promotion
 Pros: Seems fair enough
 Cons: Not everyone applying for job are fit so
waste of time and resources
Best way to choose test taker is to ask yourself a
question:
“What do I hope to accomplish by conducting a
test?”
Answer: I hope to identify those individuals who
posses specific skills and knowledge deemed
essential for the successful performance of a given
job
Test Administrators
Should be only those who have the training and expertise
necessary to handle the responsibility in a professional
and technically adequate manner
Level and type of expertise of tester should commensurate
with the complexity and level of job in question and with
the type of test involved
For eg:
Work sample test – Line manager with adequate
knowledge of setting up the test, give instructions and
determine scoring
Personality test or ability test – Should be someone who is
professional in such field
Might choose staff from within or provide training to them
or find some professional outside
Test standardization
Administering the test in exactly same way, in the same
environment and the same conditions including duration,
instructions, materials, physical factors and any other
aspect that might affect testing outcome
Precise standards should be adopted and all applicants are
to be allowed to react to the same set of stimuli
Test standardization makes conclusion legitimate and
balanced judgment can be made about the scores
Effort should be made to minimize or eliminate the
distorting influences such as
- Uncomfortable seating
- Poor lightening or ventilation
- Excessive noise
- Interruption during test
- Poorly repaired tools
Test Security
Reasonable efforts to be made to assure the
validity of test scores by eliminating opportunities
for test takers to attain scores by fraudulent means
Some measures to take
- Keep all the exam materials locked in a same
location
- Limit the number of people who have access to
copies of the tests and answer sheets
- Separating individuals who know each other in
the exam
Language consistency
Linguistic factor often adversely affect the test
performance of people who are unfamiliar with
certain dialect, terms or situations
Unfamiliar word usage create distraction and have
negative impact on the test results
Every effort must be made to ensure that there is
no bias in the language of the test
Consistency of language also helps to ensure
equitable testing conditions
Documentation and calculation of test results
Documentation an important part of selection as
not every outcome of selection tests used can be
remembered esp in case of huge no. of candidate
Documentation makes it certain that one has
sufficient information to make effective evaluation
Two objective:
- Serves as permanent record
- Guide to measure the each applicants suitability
against the requirements of the job (JD)
- Comparing applicants against one another
Documentation
Two main documentation techniques:
1. Referring to job related facts
-Noting down the job related factors and then comparing
them with that of factors required in the job description
- Direct comparison of duties and responsibilities and
indicate whether applicant posses necessary skills and
knowledge or not
2. Directly quoting the applicants
- Recording the applicant’s behavior, speech, attire or
appearance
- Useful when there are lots of candidates
- Significant when applicant posses all the concrete job
related factors but lacking intangible non-recordable
factors
Documentation
Notes vs Forms
Notes written in blank piece of paper by test
assessor
Forms are more useful where assessor assigns a
numerical values to each factor under evaluation
Four primary problems:
1. Forms might contain factors that are not job related
such as appearance
2. Using subjective terms only might be meaningless
3. Might check the boxes in the form too quickly
4. Without written details difficult to recall applicant on
later date
Documentation Guidelines
Record job related facts
Take notes reflecting positive as well as negative
attribute and comments
Use objective language and eliminate subjective
language
Provide concrete support for all opinions
Record descriptive terms if needed to distinguish
applicants from one another
Use terminology understood by everyone and not
the codes
Calculation of test results
Use competency based model to find out five
major competencies required for the position
Assign weight according to their importance
For each of the competencies, list out what
selection predictor (tool) you will use with proper
justification
Develop a five point rating scale for each of the
competencies with description of each rating point
Calculate the total score for each of the candidate
multiplying it by weight and find the best candidate
to select
E.g. Materials\Chapter 6\JD.docx
Selection of the best candidates and notification

Transition from the status of applicant to an

employee
Number of steps required to be followed
- Making an offer
- Preparing a checklist for final meeting
- Having a final meeting with the candidate
- Notification to the selected as well as rejected
candidates
- Issue of appointment letter and employment
contract to the selected candidate and rejection
letter to others
 Making an offer
- Determining that the candidate is right person
for the job does not necessarily mean that the
candidate also feels the same
- Lot of things might have happened in between
such as got another good offer, decided to stick
to previous jobs, wasn’t impressed with our
company
- Any delay in action can cause losing of our first
choice
- Should inform the best candidate as soon as the
decision is made
- Might send an offer letter
- Eg: Materials\Chapter 6\New offer letter.docx
 Preparing a checklist for final meeting
- Developing a checklist that has all the particulars of the
given position
- Checklist should contain topics previously discussed
with the applicant
- Topics inclusion such as Job title, department, start
date, reporting relationships, job schedule, location,
salary, benefits, primary duties, vacations, conditions of
employment

 Having a final meeting with the candidate

- Use the checklist as guide
- Review each topic as it relates to the job to be filled
- Answer any questions the candidate might have
- Return to the areas of disagreement at the end and try
to reach resolution
 Notification to the selected as well as rejected
candidates
- Communicating to the selected candidate that she has
been selected for the job
- Communicating to the rejected candidates that they are
not selected
- Notify the rejected candidates after we have received a
signed letter from the applicant accepting our offer of
employment
 Issue of appointment letter and employment contract
to the selected candidate and rejection letter to others
Eg: Appointment letter
Eg: Employment contract
Eg: Rejection letter
Orientation to appointed candidates

After an employee is hired and placed, s/he needs

to be oriented
Orientation is also called onboarding (boot camps)
It is provided to new hires with the information they
need to function comfortably and efficiently in the
organization
Includes planned introduction of fresher’s to their
job, colleagues and the company as a whole
Orientation to appointed candidates
Conveys three types of information
- General information about daily work routine
- A review of firm’s history, organization structure,
founding fathers, mission, vision, products
- Organization policies, work rules, employee
benefits
Purpose of orientation is to make feel the new
employee “at home” and reduce anxiety
A good induction program will set a positive
image of the company
Orientation to appointed candidates
Benefits
- Effective employer/employee relationships
- Mutual respect
- Shorten new employees learning curve
- Promotes open communication with manager
- Employees feel “”welcomed”
Orientation to appointed candidates

Four strategic choices before designing

orientation program
1. Formal or informal
2. Individual or collective
3. Serial or disjunctive
4. Investiture or divestiture
Requisites of an effective program
Prepare for new employee
Determine information new employees want to
know
Determine how to present information
Completion of paper work

Evaluation of orientation program

New employees can be given questionnaire to
evaluate
Group discussion session
Problems of orientation
Supervisor who is entrusted with the job is not trained or is
too busy
Employee is overwhelmed with too much information in
short time
Employee is overloaded with forms to complete
Employee is asked to perform tasks where there are high
chances of failure
Employee is asked to perform menial tasks that s/he is
discouraged
Employee is thrown into action too soon
Question

Develop a checklist for an orientation

program.
Discuss on the strategic choice you
will make in designing the orientation
program.
Questions???