Labor and Collective Bargaining Federal

Labor and Collective Bargaining

Federal Government Resistance to Collective Bargaining - Supporters of the Public Safety Employer-Employee Cooperation Act or HR 980 assumed that this legislation would enhance and increase cooperation between the government and its workers (Sherk 2007). Most of these employees belonged to unions and experience already demonstrated that collective bargaining would, in fact, not enhance cooperation. Rather, it would create greater and undue burden on the States. These public employees included policemen, firefighters and emergency medical personnel. Collective bargaining has viewed as intrinsically adversarial. Putting employees and the employer before the bargaining table may be aimed at cooperation. But it would create as much conflict as the cooperation it was aimed at effecting. If the outcome was not favorable to either side and the employees staged a strike, the action would jeopardize vital public services. Examples were the Detroit public school teachers who went on strike in September 2006 and would not return to work despite a court order. In December 2005, transit workers staged an illegal strike, which paralyzed New York City in that busy shopping time of the year (Sherk).

And even when employees would not stage a strike, collective bargaining tended to create strife among workers (Sherk 2007). The National Air Traffic Controllers Association, for example, went up against the federal government for the increase of their salaries to $200,000 a year. HR 980 would afflict State and local governments with a huge but unfunded mandate (Sherk 2007). A union's monopoly over bargaining would prevent their employer from hiring other employees to do the same job at less than the wages fixed by the union. This meant that the government would have to pay more for the same work done. Being unfunded, the Act would force the government to reduce services or increase taxes (Sherk).

Unions Put Companies at a Competitive Disadvantage - Unionized workers earn roughly 15% more than non-unionized workers at the average (Hassett 2001). This situation puts unionized businesses at a disadvantage. These businesses said that they were generally unable to overcome this disadvantage. Statistics say that companies where unions held vast power have been steadily declining in number. Union power has correspondingly declined with them. Reports say that less 10% of private workforces is currently unionized, which went down from approximately 27% in the early 50s. Federal Reserve economist Bruce C. Fallick said that these businesses could offset the disadvantage of higher wages. But he was also quick to say that strategies were not really effective (Hassett).

It was thought that a unionized company could acquire and use more machines and become automated in order to lower production costs (Hassett 2001). But few companies opt for this choice when they are unionized. Profit increases would simply be offset by wage demands. Quite often, they merge with other unionized companies in apprehension that the union would only spread if a non-unionized firm was acquired. The non-unionized asset would then decline in value (Hassett).

It has been observed that firms would generally invest approximately 30% less in new machines when a union existed (Hassett 2001). This showed that unionized businesses did not favor the automation option or strategy. This trend clearly suggested that American workers in the last few years have become more and more convinced that forming or joining unions was not profitable or worthwhile (Hassett).

NLRB Criteria on Employee Mutuality of Interest - Mutuality of interest is described as a "direct or material indirect business relationship" with a "direct financial interest or material indirect financial interest (U.S. Securities and Exchange Commission 2005)" between two parties. A union may intervene in a representation hearing if it presents the required showing of interest (National Labor Relations Agreement 2006). This union must show that prove it has at least 10% of the showing of interest among the employees. It may also meet this requirement if it is the certified or presently recognized bargaining agent of the employees. Otherwise, the union should be party to a present or recently expired collective bargaining involving the employees it represents. The union should make the showing of interest within 48 hours of the request to intervene. If it is too late, the representative may still participate if the showing of interest is made before a Consent Election Agreement. He may still do so if the union to which he belongs did not receive a pre-consent or pre-hearing notice and that the showing of interest was made before the consent agreement was approved. He can no longer participate after the approval of the consent or the hearing has ended. But the showing of interest of the employees he represents can be added in the ballot in a consent election if they approve of it (National Labor Relations Agreement).

Section 9a (National Labor Relations Agreement 2006) requires that a representative be chosen by a "majority of employees in a unit in order to engage in collective bargaining exclusively for them. The Board does not have to determine the appropriateness of the unit but only needs to state the unit as "appropriate." As a result, if a union seeks out a unit, which the Board considers appropriate, the employers' alternative will not be considered. The Board will constitute that unit according to the "community-of-interests" test. This evaluates whether the employees coming to the hearing share and enjoy a "substantial mutuality of interest in wages, hours and working conditions." The Board bases the evaluation and decision on whether an appropriate unit exists on a number of factors. These factors include similarity of duties, skills, wages, fringe benefits, hours, interest and working conditions; volume of communication among the employees; the employer's organizational structure; integration of work flow and interrelationship of the production process; bargaining history in the said unit and industry; extent of organization; and the desires of the petitioner (National Labor Relations Agreement).

Mandatory, Permissive and Illegal Subjects of Bargaining. - Collective bargaining is a lawfully binding agreement between the union and the employer to negotiate with each other (Twarog 2005). Negotiations covered wages, hours and other terms and conditions of employment through the grievance and arbitration procedure. The assumption is that the employer and the union, through its representative, come to the bargaining in good faith. They do not have to reach an agreement. They only have to engage in the process itself. But three basic issues can and do come up during the process (Twarog).

Mandatory issues deal with wages, hours or working conditions, which have vital effects on employees (Twarog 2005). These subjects require that the negotiation be undertaken in good faith. Negotiation is undertaken when one party requests the other. But they need not reach an agreement. They only need to engage in the process (Twarog).

Permissive issues are non-mandatory and the parties can still bargain over the issues (Twarog 2005). One side may put the subject on the bargaining table, but the other side need not bargain on it. If one side refuses to discuss it, the issue dies. Neither can compel the other to pursue the issue. Holding a strike over a permissive issue would not be protected or legal. Examples are retiree benefits, internal union matters, supervisors' conditions of employment and interest arbitration (Twarog).

Illegal bargaining subjects cannot be legally bargained over by either party (Twarog 2005). They violate a law and thus cannot be entered into even if both sides agree to do so. Examples are discrimination, hot cargo clauses, and closed shop clauses (Twarog).

The issues, type and categories of collective bargaining must be clearly understood (Twarog 2005). Clearly understanding the type of issue will help the union come up with the appropriate bargaining strategy and tactics for the process (Twarog).

Profit-Sharing and Lump Sum Increase, COLAs and Wage Re-openers Decrease

Profit-sharing has been on an upward climb globally, especially in developed economies (Ellis and Smith 2007). A study revealed that the trend was actually moving up since the mid-80s rather than presenting as a recent phenomenon. Although there are no consistent explanations to the surge, the consensus was that ongoing technological progress had raised the rate of old capital goods. This, in turn, induced a greater increase in both capital and jobs. Such placed the firms in a stronger bargaining position to share profits with the labor force, which, for its part, has been experiencing frequent job losses. The firms were able to realize a bigger fraction of the economic surplus from market frictions. Profit share increased, as a consequence. The effect has been observed to be stronger where labor market institutions were more rigid. There was also positive impact between the size of the profit share and the extent of product market regulation (Ellis and Smith).

A study compared the annualized returns from dollar-cost average strategies and lump-sum investing from 1926-1991 (Williams and Bacon 2004). It found that lump-sum investing produced greater returns than dollar-cost averaging. The cash involved appeared to have come from lump-sum retirement distribution, court settlements or inheritance. This was indicative of the increase in lump-sum incentive payments as well. As a result, financial planners need to advise clients who receive these payments and make large cash investments to do so as soon as possible. The study concluded that dollar-cost averaging would be unlikely to topple the superior results of lump-sum investing at this time (Williams and Bacon).

Profit-sharing allows employees to earn bonuses according to company performance (GoSmallBiz 2008). A certain percentage is set aside by the firm and paid to the employees if certain annual profit goals are met or exceeded. Bonuses are paid in cash or as a contribution to the retirement fund, or else partly in cash and partly as contribution to the retirement fund. The advantage for employees is that they share in the company's profits. The disadvantage is that they receive the share even if their performance does not improve or they do not receive it even if their performance improves (GoSmallBiz 2008).

A lump-sum incentive pay is a one-time cash payment equal to a certain percentage of an employee's base wage (GoSmallBiz 2008). If there is a 4% annual increase, for example, the company may give the employee a one-time cash payment equal to 5% of his or her annual pay. The main advantage for the company is that lump sum does not accumulate or increase, as it is one-time. The advantage to the employee is receiving a large amount, which they can invest right away, instead of small amounts spread out through the year (GoSmallBiz).

Negotiating Reduced Health Insurance Care Costs While Maintaining Good Health Care Benefits - Better quality health care costs do not have to be high. They vary according to the type of medical or hospital procedure, the location of the facility and the patient's residence (Carlson 2008). Suggested ways of reducing these costs while raising one's health level were taking good care of oneself; practicing self-examination and submitting to appropriate medical check-ups; becoming and remaining aware of health risks of certain lifestyles; awareness of one's medical coverage; taking an active role in health care decision-making; acquiring professional medical knowledge about prescribed medications and medical tests; avoidance of hospitalization and emergency rooms whenever possible; check hospital and doctor's bills carefully for errors; and avoid defensive medicine. Defensive medicine consists of tests and services aimed at protecting physicians from possible malpractice court suits (Carlson).

Strategies suggested to reduce health care costs were employer contribution methods, competition among health management organizations, managed care and a State mental health parity mandate (Stanton 2002). Current policymakers continue to look for ways to decrease these costs and their current growth levels without reducing access to necessary health care services or unduly burdening providers. These policymakers rethink past strategies or explore new ways, which seem workable. Before deciding, they acquire insights by conducting studies on projected or expected outcomes. These insights investigate strategies, which affect costs and realize savings. A professionally funded research found that certain approaches save money while the rest have mixed results. Employers who contribute to health plans and offer employees to take in three or more health plans can save on premiums. Competition among health management organizations leads to lower premiums. Managed mental health or substance abuse care can also effect lower costs. Flexible spending accounts, cost-sharing and hospital mergers can also cut down on health costs (Stanton).

Public and Private-Sector Subcontract Work Grievances

Subcontracting is a contract, which assigns some of the obligations of a prior contract to another party (the American Heritage Dictionary of the English Language 2006). A study on four industrial organizations identified the most frequent causes or ground of grievances as pay at 17%, working conditions at 16%, performance and permanent job assignments at 16%, discipline at 14%, benefits at 14%, management rights at 7% and discrimination at 6% (Calvasina 2008). When no grievance procedures exist, employees may press grievances as guaranteed by Section 9 of the Taft-Hartley Act (Calvasina).

The grievance procedure consists of four steps (Calvasina 2008). Step 1 consists of an employee reporting a violation of the contract to the union steward who helps him or her write the complaint or grievance. In Step 2, the union representative applies or creates precedents. In Step 3, the grievance is settled. The union is represented by its local negotiating committee while management is represented by its IR or plant manager. And Step 4 consists of arbitration, starting with the choice of a permanent arbitrator. A study found that an average grievance was settled between 10 and 14 days. Settlement may take longer if the bargaining units are large (Calvasina).

A study on the public or government sector revealed that filing more than one grievance in a single year received lower performance ratings, whether these won or lost (Calvasina 2008). Another study on public-sector management and union representatives found that performance and discipline were factors in higher grievance rates. Managers perceived the effectiveness of discipline as greater or related to non-union organizations. Discipline for them required either a very permissive or restrictive rules, high monitoring costs and huge pressure for performance. Another study on 10 paper mills in the private sector, consisting of 9 unionized and one non-unionized companies, showed that higher grievance rates related with lower plant productivity. These companies pursued more competitive goals and thus took a more narrow approach. Seniority problems were less frequent while disciplinary issues were more frequent. Private or public-sector organizations, which held cooperative approaches, tended to settle the issue or dispute in earlier steps of the procedure. This often led to positive and conciliatory responses from both or among the involved parties. On the issue of subcontracting, a public or government-sector organization must subject the contract to public scrutiny, unlike in the case of a private-sector organization (Calvasina).

Union Protects the Interests of Its Members - International human rights and labor rights only conditionally guarantee the worker's right to full freedom to form or join unions and to strike (Human Rights Watch 2006). Yet among human rights documents, only the International Covenant on Economic, Social and Cultural Rights carries a clause on the right to strike. Even then, it is to be exercises "in conformity with the laws" of the given country. A worker's freedom of association is not an abstraction. It has meaning and usefulness only in the real world of clashing interests among workers, employers, the government and other social forces. The formation of a union is not a static or episodic natural activity. It is drawn from the relationship between the worker and the employer. The worker's exercise of his economic strength to protect his interest is a natural, normal and accepted right, which management is aware of and must respect. That awareness and respect will lead both parties to a compromise and avert a strike or another suitable action on the part of the worker or union (Human Rights Watch).

The 1948 Universal Declaration of Human Rights states and recognizes the right of a worker to form and join trade unions - or to stage a strike - for the protection of his interests (Human Rights Watch 2006). The European Union's Community Charter of the Fundamental Social Rights of Workers also recognizes that right "to resort to collective action in the event of a conflict of interests." Collective action includes the right to strike. A union, which wants to terminate contract negotiations with the employer, whom it deems will be financially more capable in 18 months, can opt to negotiate for a four-year contract in order to protect its interests. One option is to stage a strike. The Labor Principle of the North American Agreement on Labor Cooperation, the United States and its two NAFTA partners are committed to respect workers' right to strike. They themselves define this right as "the protection of... The workers... In order to defend their collective interests" without further qualification. In some regions, this right is not binding. Yet it expresses the political will of the countries and reflect this will at the international level as a recognition of respect for workers' rights (Human Rights Watch).

Today, sympathy strikes are acknowledged as lawful in some countries and occurring more frequently as businesses concentrate as a consequence of globalization and the decentralization of work centers (Human Rights Watch 2006). The Committee of Experts felt that a general prohibition of sympathy strikes could develop or create abuse. It agreed that workers could stage sympathy strikes as long as the previous or initial strike was not unlawful (Human Rights Watch).

Unionized and Non-Unionized Grievance Procedures - Grievance procedure in unionized organizations consists of 5 steps (Anonymous 2008). In Step 1, the complaining employee, the steward and supervisor get together for an informal resolution. If the conflict is not resolved, a written grievance is made as Step 2. The written complaint states the grievance, when and where it happened, who were involved and why the grievance was being filed. Step 3 consists of a formal resolution by the steward and the head of the department. Step 4 is the formal resolution of the union grievance committee and the director of personnel. And Step 5 consists of the final and binding arbitration made by a neutral arbitrator or arbiter (Anonymous).

Grievance procedure for non-unionized organizations normally takes the same pattern as that for unionized organizations (Anonymous 2008). In comparison, the non-unionized procedure is less common and more varied. It has no binding arbitration, unlike that of unionized organizations. Employees are also less sophisticated in using the system. About the same number of grievances reaches the last stage. And most employees are reluctant to take recourse to it because of their fear of reprisal (Anonymous).

Grievance issues include suspension, disciplinary memoranda, performance evaluation, denial of sick benefits, training, work performed or to be performed out of classification, termination, management performing production work, transfer, union representation, discrimination, grievance process, safety, excused or complimentary time, vacation, seniority and pay (Anonymous).

The unionized form appears to be preferable because it is complete and, therefore, more thorough. The inclusion of a binding arbitration gives the union much power and leverage over management. But it can also create more trouble and less advantage in the long run when management tries to protect its own interests. The procedure for non-unionized organizations may be more easily subjected to manipulation. But peripheral advantages may also accrue to employees for not bringing legal troubles and constraints to management.

Binding Arbitration, Mediation and Conciliation - Arbitration is a dispute resolution process between disputing parties who present their conflict to a third-party intermediary (Conflict Research Consortium 1998). This third party examines the evidence and makes a decision, which is usually binding. It is similar to a court suit in that it is also adversarial. Each side presents evidence to prove its claim and disprove the claim of the other. The sides go against each other rather than cooperate. In comparison to a court, arbitration is not formal and can thus change its rules to suit the needs of either party Court cases are either won or lost. On the other hand, an arbitrator would more than decide which side is right and which is wrong. He comes up with new ways of satisfying the needs of both sides at the same time. He makes both sides win or often recommends such a situation (Conflict Research Consortium).