This document provides an overview of key concepts related to collective bargaining and labor relations. It discusses the labor relations framework, goals of society, management and unions in labor relations, the legal environment governing labor laws, and processes such as organizing, contract negotiations, grievance procedures, and contract administration. Learning objectives cover topics like defining collective bargaining, identifying stakeholders' goals, explaining the impact of laws, and describing interactions between labor and management.

1. ©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
Chapter 14
Collective Bargaining and
Labor Relations

2. ©McGraw-Hill Education
Learning Objectives
LO 14-1 Describe what is meant by collective bargaining and labor
relations.
LO 14-2 Identify the labor relations goals of society, management, and
labor unions.
LO 14-3 Explain the legal environment’s impact on labor relations.
LO 14-4 Describe the major labor–management interactions:
organizing, contract negotiations, and contract administration.
LO 14-5 Describe new, less adversarial approaches to labor–
management relations.
LO 14-6 Explain how changes in competitive challenges (e.g., product
market competition and globalization) are influencing labor–
management interactions.
LO 14-7 Explain how labor relations in the public sector differ from
labor relations in the private sector.

3. ©McGraw-Hill Education
The Labor Relations Framework 1 of 2
Dunlop, Industrial Relations Systems - a
successful industrial relations system
1. An environmental context
2. Participants
3. A “web of rules”
4. Ideology
It does not eliminate conflict.
• Collective bargaining, mediation, arbitration,
participation in decision making
LO 14-1

4. ©McGraw-Hill Education
The Labor Relations Framework 2 of 2
Katz and Kochan – three types of decisions
1. Strategic level
2. Functional level
3. Workplace level

5. ©McGraw-Hill Education
Figure 14.1 A Labor Relations Framework
Jump to long description in appendix
SOURCE: AFL-CIO, http://afl-cio.org/About/What-the-AFL-CIO-Does, accessed April 29, 2017.

6. ©McGraw-Hill Education
Goals and Strategies 1 of 3
Society
• Labor unions’ major benefit to society is the
institutionalization of industrial conflict.
• Unilateral control by management sacrifices
workers’ rights.
LO 14-2

7. ©McGraw-Hill Education
Goals and Strategies 2 of 3
Management
• Discourage or encourage unions?
• Shifts focus from dealing with individuals to dealing
with a group

8. ©McGraw-Hill Education
Goals and Strategies 3 of 3
Labor Unions
• Give workers a formal and independent voice in
setting the terms and conditions of their work
• Wages and safety and welfare

9. ©McGraw-Hill Education
Table 14.1 Typical Provisions in Collective
Bargaining Contracts 1 of 8
Establishment and administration of the
agreement
• Bargaining unit and plant supplements
• Contract duration and reopening and
renegotiation provisions
• Union security and the checkoff
• Special bargaining committees
• Grievance procedures
• Arbitration and mediation
• Strikes and lockouts
• Contract enforcement

10. ©McGraw-Hill Education
Table 14.1 Typical Provisions in Collective
Bargaining Contracts 2 of 8
Functions, rights, and responsibilities
• Management rights clauses
• Plant removal
• Subcontracting
• Union activities on company time and premises
• Union–management cooperation
• Regulation of technological change
• Advance notice and consultation

11. ©McGraw-Hill Education
Table 14.1 Typical Provisions in Collective
Bargaining Contracts 3 of 8
Wage determination and administration
• General provisions
• Rate structure and wage differentials
• Allowances
• Incentive systems and production bonus plans
• Production standards and time studies
• Job classification and job evaluation
• Individual wage adjustments
• General wage adjustments during the contract period

12. ©McGraw-Hill Education
Table 14.1 Typical Provisions in Collective
Bargaining Contracts 4 of 8
Job or income security
• Hiring and transfer arrangements
• Employment and income guarantees
• Reporting and call-in pay
• Supplemental unemployment benefit plans
• Regulation of overtime, shift work, etc.
• Reduction of hours to forestall layoffs
• Layoff procedures; seniority; recall
• Worksharing in lieu of layoff
• Attrition and promotion arrangements
• Training and retraining
• Relocation allowances
• Severance pay and layoff benefit plans
• Special funds and study committees

13. ©McGraw-Hill Education
Table 14.1 Typical Provisions in Collective
Bargaining Contracts 5 of 8
Plant operations
• Work and shop rules
• Rest periods and other in-plant time allowances
• Safety and health
• Plant committees
• Hours of work and premium pay practices
• Shift operations
• Hazardous work
• Discipline and discharge

14. ©McGraw-Hill Education
Table 14.1 Typical Provisions in Collective
Bargaining Contracts 6 of 8
Paid and unpaid leave
• Vacations and holidays
• Sick leave
• Funeral and personal leave
• Military leave and jury duty

15. ©McGraw-Hill Education
Table 14.1 Typical Provisions in Collective
Bargaining Contracts 7 of 8
Employee benefit plans
• Health and insurance plans
• Pension plans
• Profit-sharing, stock purchase, and thrift plans
• Bonus plans

16. ©McGraw-Hill Education
Table 14.1 Typical Provisions in Collective
Bargaining Contracts 8 of 8
Special groups
• Apprentices and learners
• Workers with disabilities and older workers
• Women
• Veterans
• Union representatives
• Nondiscrimination clauses
SOURCE: From Harry Katz, Thomas Kochan, and Alexander Colvin, An Introduction to Collective Bargaining
and Industrial Relations 4e, 2008. Reproduced with permission of The McGraw-Hill Companies, Inc.

17. ©McGraw-Hill Education
Union Structure, Administration, and
Membership 1 of 8
National and International Unions
• American Federation of Labor and Congress of
Industrial Organizations (AFL-CIO)
• Unions are craft or industrial

18. ©McGraw-Hill Education
Union Structure, Administration, and
Membership 2 of 8
Local Unions
• Collective bargaining and administration occur at
the local level
• May be a single facility or a number of facilities
• Individual members’ participation – electing union
officials and strike votes
• Shop steward
• Business representative

19. ©McGraw-Hill Education
Union Structure, Administration, and
Membership 3 of 8
American Federation of Labor and Congress of
Industrial Organizations (AFL-CIO)
• Not a labor union
• Represents labor’s interests in public policy
issues such as civil rights, economic policy, safety,
and occupational health
• Provides information and analysis that member
unions can use in their activities

20. ©McGraw-Hill Education
Figure 14.2 AFL-CIO Organization Chart
Jump to long description in appendix

21. ©McGraw-Hill Education
Union Structure, Administration, and
Membership 4 of 8
Union Security
• Two contract provisions critical to a union’s
security or viability
• Checkoff provision
• Flow of new members
• Closed shop
• Union shop
• Agency shop
• Maintenance of membership rules

22. ©McGraw-Hill Education
Union Structure, Administration, and
Membership 5 of 8
Union Security continued
• Taft-Hartley Act
• Right-to-work laws
• Make union shops, maintenance of membership,
and agency shops illegal

23. ©McGraw-Hill Education
Union Structure, Administration, and
Membership 6 of 8
Union Membership and Bargaining Power
• Membership has consistently declined as a
percentage of employment.
• Structural changes in the economy
• Job growth in the service sector
• Increased employer resistance
• Competitive threats

24. ©McGraw-Hill Education
Union Structure, Administration, and
Membership 7 of 8
Union Membership and Bargaining Power continued
• Substitution with HRM
• Employers attempt to remain nonunion by offering most
of the things a union can offer
• Substitution by government regulation
• Fewer areas in which unions can provide worker rights or
protection beyond those specified by law

25. ©McGraw-Hill Education
Union Structure, Administration, and
Membership 8 of 8
Union Membership and Bargaining Power continued
• Worker views
• Downtrend in union membership
• Interest in unions is still substantial
• Union actions and industry structure
• Corruption and unions’ adapting to changes have hurt
their cause
• Right-to-work laws

26. ©McGraw-Hill Education
Legal Framework 1 of 3
Wagner Act (also known as the National Labor Relations
Act or NLRA) 1935
• Supported collective bargaining
• Union membership nearly tripled
• Protected activities:
• Union organizing
• Joining a union, whether it is recognized by the employer
or not
• Going out on strike to secure better working conditions
• Refraining from activity on behalf of the union
LO 14-3

27. ©McGraw-Hill Education
Table 14.3 Are You Excluded from the NLRA’s
Coverage?
The NLRA specifically excludes from its coverage
individuals who are
• Employed as a supervisor
• Employed by a parent or spouse
• Employed as an independent contractor
• Employed in the domestic service of any person or family in a
home
• Employed as agricultural laborers
• Employed by an employer subject to the Railway Labor Act
• Employed by a federal, state, or local government
• Employed by any other person who is not an employer as
defined in the NLRA

28. ©McGraw-Hill Education
Legal Framework 2 of 3
Unfair Labor Practices—Employers
• Section 8(a) of the NLRA
• Prohibits certain activities by both employers and
labor unions

29. ©McGraw-Hill Education
Legal Framework 3 of 3
Unfair Labor Practices—Labor Unions
• 1947 Taft-Hartley Act
• 1959 Landrum-Griffin Act
Enforcement
• National Labor Relations Board
• Enforcement is based on the commerce clause in the
U.S. Constitution.
• Conduct and certify representation elections and prevent
unfair labor practices

30. ©McGraw-Hill Education
Union and Management Interactions:
Organizing 1 of 3
Why Do Employees Join Unions?
• Is there a gap between the pay, benefits, and other
conditions of employment that employees actually
receive versus what they believe they should
receive?
• Is union membership seen as the most effective or
instrumental means of change?
LO 14-4

31. ©McGraw-Hill Education
Union and Management Interactions:
Organizing 2 of 3
The Process and Legal Framework of Organizing
• Union representation election
• Secret ballot election
• Runoff election
• Decertification election
• NLRB determines the appropriate bargaining unit
and the employees who are eligible to participate
in organizing activities.
• Ambush election rule
• Browning-Ferris

32. ©McGraw-Hill Education
Union and Management Interactions:
Organizing 3 of 3
The Process and Legal Framework of Organizing
continued
• Organizing campaigns: Management and union
strategies and tactics
• Unions attempt to persuade employees that their wages,
benefits, treatment by employers, and opportunity to
influence workplace decisions are not sufficient and that
the union will be effective in obtaining improvements.
• Management emphasizes that it has provided a good
package of wages, benefits, and so on, and it will lead to
costs for employees.
• Associate union membership

33. ©McGraw-Hill Education
Union and Management Interactions:
Contract Negotiation 1 of 6
The Negotiation Process
• Distributive bargaining
• Integrative bargaining
• Attitudinal structuring
• Intraorganizational bargaining

34. ©McGraw-Hill Education
Union and Management Interactions:
Contract Negotiation 2 of 6
Management’s Preparation for Negotiations
1. Establishing interdepartmental contract objectives
2. Reviewing the old contract
3. Preparing and analyzing data
4. Anticipating union demands
5. Establishing the cost of possible contract
provisions
6. Preparing for a strike
7. Determining strategy and logistics

35. ©McGraw-Hill Education
Union and Management Interactions:
Contract Negotiation 3 of 6
Negotiation Stages and Tactics
• Initial stage includes all the various interest groups, sends a
message to management about what the union feels it must
do to satisfy its members, and it may also help the union
achieve greater solidarity.
• Middle stages decide importance of issues.
• Final stage is agreement to avoid strike.

36. ©McGraw-Hill Education
Union and Management Interactions:
Contract Negotiation 4 of 6
Bargaining Power, Impasses, and Impasse
Resolution
• What is the ability of each party to withstand a
strike?

37. ©McGraw-Hill Education
Union and Management Interactions:
Contract Negotiation 5 of 6
Management’s Willingness to Take a Strike
• Can the company remain profitable over the long run?
• Can the company continue to operate in the short run?
• Important factors
• Product demand
• Product perishability
• Technology
• Availability of replacement workers
• Multiple production sites and staggered contracts
• Integrated facilities
• Lack of substitutes for product

38. ©McGraw-Hill Education
Union and Management Interactions:
Contract Negotiation 6 of 6
Impasse Resolution Procedures: Alternatives to
Strikes
• Mediation
• Fact finding
• Arbitration

39. ©McGraw-Hill Education
Union and Management Interactions:
Contract Administration 1 of 5
Grievance Procedure
• War Labor Board helped institutionalize the use of
arbitration, reinforced by the Taft-Hartley Act
• Three criteria
1. How well are day-to-day contract questions resolved?
2. How well does the grievance procedure adapt to
changing circumstances?
3. In multiunit contracts, how well does the grievance
procedure permit local contract issues (like work rules)
to be included and resolved?

40. ©McGraw-Hill Education
Union and Management Interactions:
Contract Administration 2 of 5
Grievance Procedure continued
• Duty of fair representation
• If the grievance does reach arbitration, the
arbitrator makes the final ruling in the matter.

41. ©McGraw-Hill Education
Table 14.11 Steps in a Typical Grievance
Procedure 1 of 3
Employee-initiated grievance
• Step 1
• Employee discusses grievance or problem orally with
supervisor.
• Union steward and employee may discuss problem orally
with supervisor.
• Union steward and employee decide (1) whether problem
has been resolved or (2) if not resolved, whether a
contract violation has occurred.

42. ©McGraw-Hill Education
Table 14.11 Steps in a Typical Grievance
Procedure 2 of 3
Employee-initiated grievance continued
• Step 2
• Grievance is put in writing and submitted to production
superintendent or other designated line manager.
• Steward and management representative meet and discuss
grievance. Management’s response is put in writing. A member
of the industrial relations staff may be consulted at this stage.
• Step 3
• Grievance is appealed to top line management and industrial
relations staff representatives. Additional local or international
union officers may become involved in discussions. Decision is
put in writing.

43. ©McGraw-Hill Education
Table 14.11 Steps in a Typical Grievance
Procedure 3 of 3
Employee-initiated grievance continued
• Step 4
• Union decides on whether to appeal unresolved grievance to
arbitration according to procedures specified in its constitution
and/or bylaws.
• Grievance is appealed to arbitration for binding decision.
• Discharge grievance
• Procedure may begin at step 2 or step 3.
• Time limits between steps may be shorter to expedite the
process.
• Union or group grievance
• Union representative initiates grievance at step 1 or step 2 on
behalf of affected class of workers or union representatives.
SOURCE: From H. C. Katz, T. A. Kochan, and A. J. S. Colvin, An Introduction to Collective Bargaining and Industrial Relations, 4e, 2008. Reprinted with permission of The McGraw-Hill Companies, Inc.

44. ©McGraw-Hill Education
Union and Management Interactions:
Contract Administration 3 of 5
Grievance Procedure continued
• Due process questions
1. Did the employee know what the rule or expectation was
and what the consequences of not adhering to it were?
2. Was the rule applied in a consistent and predictable
way?
3. Are facts collected in a fair and systematic manner?
4. Does the employee have the right to question the facts
and present a defense?

45. ©McGraw-Hill Education
Union and Management Interactions:
Contract Administration 4 of 5
Grievance Procedure continued
• Due process questions: continued
5. Does the employee have the right to appeal a decision?
6. Is there progressive discipline?
7. Are there unique mitigating circumstances?

46. ©McGraw-Hill Education
Union and Management Interactions:
Contract Administration 5 of 5
Cooperative Labor-Management Strategies
• Trend toward less adversarial workplace relations
• To increase the involvement of individuals and work
groups in overcoming adversarial relations and increasing
employee commitment, motivation, and problem solving
• To reorganize work so that work rules are minimized and
flexibility in managing people is maximized
LO 14-5

47. ©McGraw-Hill Education
Labor Relations Outcomes 1 of 2
Strikes
• Most recent strikes have involved white-collar
employees
• Strikes are the exception
Wages and Benefits
• Unions influence pay, benefits, and promotions
• Although wages and benefits are higher for union
members, job satisfaction is lower, on average.

48. ©McGraw-Hill Education
Labor Relations Outcomes 2 of 2
Productivity
• Unions both help and hurt productivity.
• Union workers are generally believed to be more
productive than nonunion workers overall.
Profits and Stock Performance
• A company’s profits and stock performance may
suffer if unions raise costs

49. ©McGraw-Hill Education
The International Context
Union Membership
• Except for China, Russia, and Ukraine, the United
States has more union members than any other
country.
• But it has almost the lowest union rate of any
country.
• Labor and social democratic political parties are
commonplace in western Europe
• Labor costs and productivity will continue to be key
challenges
LO 14-6

50. ©McGraw-Hill Education
The Public Sector
Union Membership
• Public-sector union growth among white-collar
employees
• Strikes are illegal at the federal level of the public
sector and in most states
LO 14-7

51. ©McGraw-Hill Education
Nonunion Representation Systems
88.9% of workers not part of a union
Nonunion representation not equivalent to
collective bargaining agreement or union

52. ©McGraw-Hill Education
Appendix of Image Long Descriptions

53. ©McGraw-Hill Education
Appendix 1 Figure 14.1 A Labor Relations
Framework
The labor relations framework depicted in Figure 14.1 incorporates
many of the ideas discussed so far, including the important role of the
environment (the competitive challenges); union, management, and
societal goals; and a separation of union–management interactions into
categories (union organizing, contract negotiation, contract
administration) that can have important influences on one another but
may also be analyzed somewhat independently. The model also
highlights the important role that relative bargaining power plays in
influencing goals, union–management interactions, and the degree to
which each party achieves its goals. Relative bargaining power, in turn,
is significantly influenced by the competitive environment (legal, social,
quality, high-performance work systems, and globalization competitive
challenges) and the size and depth of union membership.
Return to original slide

54. ©McGraw-Hill Education
Appendix 2 Figure 14.2 AFL-CIO
Organization Chart
At the top is a box labelled 55 affiliated national unions.
The next box reads executive council 55 vice presidents, president, secretary-treasurer,
executive vice president.
The next box lists AFL-CIO departments ;
Accounting • Campaigns • Civil, Human and Women’s Rights • Digital Strategies •
Facilities Management • Government Affairs • Human Resources • Information
Technology • International • Meetings and Travel • Office of General Counsel • Office of
Investment • Organizing • Policy • Political • Public Affairs • Support Services
The next box lists trade and industrial departments:
Building and Construction Trades • Maritime Trades • Metal Trades • Professional
Employees • Transportation Trades • Union Label and Service Trades
The final, bottom box reads thousands of affiliated local unions and 12.75 million
members, 51 state federations
Return to original slide