Collective bargaining principles and practice

Collective Bargaining

The bargaining environment in which Magic Carpet Airlines (MCA) found itself was a hostile one. The flight attendants' union (LFA - League of Flight Attendants) wanted much more than MCA wanted to give, but it was also clear that the LFA had legitimate concerns with the way they were treated by MCA and what they were offered financially. LFA was very committed to the idea that concessions needed to be made by MCA, and MCA was committed to the idea that concessions were not necessary. Because that was the case, proposals were drawn up and negotiations were begun. What made the bargaining environment more difficult was that MCA was technically a national carrier, but it was very small so it was seen more as a regional carrier, even by its management. It was also often referred to as a large regional carrier. While this might not seem significant to some people, the differences in rules and regulations between national and regional carriers were large and important. Depending on how MCA was classified, it could be required to do more or less for its flight attendants, pilots, mechanics, and other employees.

Given that information, the LFA knew that it had an uphill battle on its hands. Not all airlines respond the same way to requests for more money and better treatment from their employees, but the LFA knew it had the opportunity to negotiate. It did not matter, ultimately, what MCA called itself. What mattered was that it was clearly designated as a national carrier based on its activities and its income level. With that in mind, the LFA knew that it could force MCA's hand on the regulations a national carrier must follow. Not all concessions requested would be agreed upon, of course, but there was the opportunity to get the flight attendants much more than the currently had available to them.

If it were not for the deregulation of the airline industry in the 1970s, the negotiations faced by MCA and LFA would not have been necessary. When the airlines were still regulated, they had to follow strict rules for what routes they could fly, how much they could charge passengers for those routes, and what they were to pay their employees. Because the airlines were bound to specific things there were no union contract negotiations, and there were very few airlines even in existence. Once deregulation happened, there were more airlines popping up seemingly overnight. They made different routes and started flying to different places. They also focused on the adjustment of the rates they charged to their passengers. They could raise them however they liked, and they could also consider what they wanted to pay their employees. Often, one airline would raise its rates and the others would follow suit. Many smaller, regional airlines operated as "feeder" airlines for the larger companies, and not all employees knew the difference.

Without any regulation of the airlines, the bargaining power of both sides (the airlines and the flight attendants) has shifted. While MCA has the opportunity to continue to deny any concessions desired by the LFA, the LFA can also continue to avoid acceptance of the proposal made by MCA. That could eventually lead to a strike by the LFA because their demands are not being met. In that case, the LFA would have a lot of bargaining power because MCA needs its flight attendants if it is to operate. It could hire new ones, but at what cost and in what time frame? The cost of getting new flight attendants could be significantly higher than the cost of simply acquiescing to some of the demands that are being made by the LFA during the negotiations. Ultimately, both sides have bargaining power (Budd, 2009). The LFA wants better conditions and more money, and MCA knows the flight attendants need their jobs. Both sides have something the other desires.

The company's goals were to keep costs as low as possible while providing good service. In order to achieve those goals, the company focused on lower pay for employees and avoided many of the perks and benefits that were given to employees at other airlines. The actions by the management in this case were not the best, because they actually caused more harm than good when it came to the negotiations. The desire to keep costs low made the company look cheap, which indicated to the flight attendants that they were not important and that they did not need to be paid any more money than they were currently receiving, nor did they need or deserve any benefits. Naturally, when people are made to feel unimportant or insignificant they are going to be less likely to perform at their best (Budd, 2009). Because MCA was aware of that, it was surprising that they did not take proactive steps to bring what they were offering to their employees more into line with what others airlines were providing. It seemed as though they had done this with pilots and mechanics, but that they were overlooking flight attendants as people who were completely expendable.

It is understandable that the company would have a goal of keeping costs down. The less something costs to operate, the more money it has the potential to make, all other things being equal (Budd, 2009). Even with that in mind, however, there is a limit to how inexpensively something can be operated and still be acceptable to the people who use it and who are employed by it (Budd, 2009). With MCA, the balance eventually shifted and the people who would generally have been fine with the working conditions saw that they were far below what was being seen in other airlines. The discrepancies were large enough to be an issue, not just something small that could be overlooked by the flight attendants or made up for in other ways. When discrepancies in pay and benefits reach that level, serious tensions can arise (Budd, 2009). That was the case with MCA and the LFA, because it was clear that the needs of the flight attendants were not being appropriately met by the airline.

Overall, the company's goal was a sound one. It just employed the wrong strategy to meet the goal. There are other ways to increase revenue and cut costs that are not related to overworking or underpaying people who are crucial to the comfort of passengers on a flight. Where MCA failed was in the area of realizing the true importance of the flight attendants and how much value they brought to the airline. Without having a clear understanding of that issue, the company determined that it could pay them less than its competitors were paying, and it could provide fewer benefits because it was a small airline. Granted, it was smaller than many national airlines. However, by purchasing another airline and merging its assets it found itself in the national airline category instead of the regional airline category a difference based on yearly revenue.

Once that had shifted it was clear that the flight attendants were working for a national airline but being paid and treated as though they were working for a regional airline. This was the basis for many of their complaints, because they realized that the value they were receiving for what they were offering to MCA was actually less than they would be getting at other airlines in the same category. While it was not dishonest to say that MCA was a smaller airline, the company continued to market itself as a regional airline - and use that status and size as a determining factor in why it could not raise the value of the benefit package to the flight attendants, along with raising their pay rates. Fortunately, the flight attendants say through that and began to question the discrepancy in pay and benefits between MCA and other national airlines. Negotiations were still complex, but they offered the opportunity for real change within the company.

It has been argued that the United States should ban permanent strike replacements. Many agree with this theory, while others state that it is unfair to "get rid" of people simply because they strike when they are not receiving equal treatment (Budd, 2009). This is one of those areas where it is difficult to completely agree or completely disagree, because there are often circumstances which do not come to light right away or that are not portrayed or discussed in the news when they are reporting on a strike or potential strike. The idea that strike replacements are never acceptable is a difficult one for this researcher to accept, mostly because there are some circumstances where employees are simply being unreasonable in their demands. If they are asking for much more than what would be reasonably expected of the company for which they work, that company will not agree to their demands. At that point, they may strike. It would seem logical that the company would be allowed to fire them and simply hire other people in their place.

While that makes perfect sense, what if the employees strike because of unfair or completely unsatisfactory working conditions? If that is the case, and the company refuses to make any changes, it seems grossly unfair that those employees could lose their jobs and others could be brought into the company in their place. This is not the same issue as temporary strike replacement, where people are brought in if they are willing to cross the picket line (Budd, 2009). They know they are there temporarily, and they know they will have to leave when the strike ends and the regular workers come back to the company. With permanent strike replacement, however, the striking workers are simply replaced and they no longer have jobs (Budd, 2009). Or, once the strike ends they may be able to come back to work if there are open positions for them to fill, but the workers hired in their absence will be considered permanent workers and will not be let go just because the other workers have settled their differences with management (Budd, 2009). Both sides of the argument have valid points.

For those who feel that it is completely unfair to be able to hire permanent strike replacements for striking workers, the issue of banning it is one that is close to their hearts. They want to make sure workers who strike and who are doing so because of unsafe conditions or other breaches by the company for which they work cannot simply be replaced (Budd, 2009). Their voices should be heard and they should have options. For other workers, though, who strike not because of unsafe or problematic conditions but just because they want more, the issue is not so black and white. There is more to that issue that must be addressed, and in order to address it there has to be open dialogue. Banning permanent strike replacement in some instances and not in others seems to make the most sense, but there is a problem with that. How does a person determine into which category the strike falls? Who makes the determination? These are questions without easy answers.

Sometimes it is very obvious who should "get away with" striking and who should not, but other times it becomes an issue of what the employees are saying vs. what the management is saying. When that happens it can be very difficult to determine whose side is right or wrong, or whether they are both right and wrong in different aspects of the issue (Budd, 2009). In short, banning permanent strike replacement is not something that would be effective in all cases. It could open the door for lawsuits and other issues where it was clear that the employees had not only a right to strike but a valid, significant reason to do so. In other cases, it may be frustrating that permanent strike replacement employees cannot be hired, but laws and regulations have to protect the employees who actually may have justifiable reasons to strike sometimes and do so because they are taking a stand.

As arbitrator in the Employee Writing Threats case, it would be difficult to make a determination. On one hand, it is absolutely unacceptable to threaten another employee. On the other hand, there is argument as to whether the handwriting that threatened the employee in question actually matched the handwriting of the employee who was fired. In this case, however, it is interesting that the handwriting expert for the defense said the writing did match the alleged guilty party, while a handwriting expert hired by the union to support that alleged guilty party said the writing did not match. It seems as though the two sides reached an impasse where the handwriting was concerned, but any arbitrator would have to question motive at that point. The first handwriting expert analyzed the writing on the wall, and then compared it with samples of the handwriting of the employees in the mill. He or she was not specifically asked to find guilt in a particular person, and was not asked if "employee X" was responsible. The handwriting expert hired by the union was there to specifically refute that the handwriting did not belong to an employee who was already accused. It is possible to find "experts" to say anything a person wants, and that can harm credibility.

It would seem that an arbitrator who carefully studied the case would be more likely to side with the first handwriting expert, because he or she was not being asked to say that a specific employee was guilty. He or she was only asked to match up handwriting, and was not familiar with the employees in question. That would make the first handwriting expert more impartial to the case, and could raise suspicion on the second handwriting expert. It would stand to reason that the second expert would not find that the handwriting matched. If he or she was going to say the handwriting matched, he or she would have never been hired by the union in the first place, because that handwriting expert would have effectively ruined the case the union was building that the employee who was accused and terminated was not the employee who was at fault.

The other issue here is the employee's admission of guilt. Originally, the employee said he was not guilty and that he had nothing to do with the threat that had been written on the wall. Once he was confronted with the handwriting analysis and the results which showed it was his handwriting, however, he did not officially admit guilt but did ask for leniency. A person who is not guilty does not ask for a lighter sentence, because there is no sentence he will accept. He knows he has done nothing wrong and has no reason to be punished (Budd, 2009). In that case, he would likely maintain his innocence and keep fighting to have his name cleared, instead of asking if he could be punished some other way instead of being fired. While this might not be true for all employees, it seems as though it would appear to be true for the majority of them. Why would they accept a serious punishment for something they had not done, even if it meant they could keep their job?

The arbitrator in this case should side with the company. The handwriting analyst who appears to be the most trusted stated that the handwriting matched the employee who was fired. There is a policy in the company that defacing company property is grounds for dismissal. The same is true for threatening another employee. This employee did both, as he threatened the other employee by what he wrote and by writing on the wall he defaced company property. It should not matter in those instances how good of a worker he was or how long he had been with the company. What should matter was that he clearly disobeyed two serious rules the company had. He knew, especially with all of his time at that company, that these rules were there and that they were in place for a reason. Because he was aware of this and let his anger matter more than the rules, the firing should stand.

In order to avoid this kind of problem, there were actions the employer and the union could have taken. There should have been changes made to the way job promotions were handled. Not allowing people to go for supervisory jobs because of union regulations was wrong, and there is no valid reason that people should have to "toe the line" with a union and not apply for a job they want and for which they are qualified. Reporting someone for trying to legitimately better himself is an abhorrent practice that should be banned everywhere. If there was no rule against it, there would be no reason that the employee would have been reported. With that out of the picture, there would have been no written threats and no firing. Unfortunately, that was not the case. That is the reason why some mills and other places prefer to be non-union, so they do not have to deal with union rules and disagreements. Not having a union would have prevented the problem, but so would the union being more open about applying for other jobs of jobs in a supervisory capacity so that employees felt they could safely do that if they wished.