Understanding Labor Relations

and CBA

Learning Objectives:

• Define labor union and labor relations

• Why employees join union

• Types of union security

• Key federal labor laws

• Sources of laws,rules and regulations under the present labor relations

• Unionizing employees – US

• Union organizing – Philippines Setting

• Effect of labor union in the company

• .Definition of Collective Bargaining Agreement (CBA)

• Advantages /Disadvantages of CBA - Employer

• Advantages/Disadvantages of CBA – Employee

• Elements / Issues to deal with

• Objectives of CBA

• CBA process

LABOR UNION

• an association, combination, or organization of employees who band together to secure favorable wages, improved working conditions, and better work hours, and to resolve grievances against employers.

• organizations formed for the purpose of representing their members’ interests and resolving conflicts with employers.

• Structurally and functionally, is an institution which involves more than the private or personal interests of its members. It represents organized, institutional activity, as contrasted with wholly individual activity. This difference is as well defined as that existing between individual members of the union. The union's existence in fact, and for some purposes in law, is as perpetual as that of any corporation, not being dependent upon the life of any member. It normally operates under its own constitution, rules and bylaws, which, in controversies between member and union, are often enforced by the committees.

UNION vs LABOR RELATIONS

• Unions – organizations formed for the purpose of representing their members’ interests in dealing with employers

• Labor relations – emphasizes skills that managers and union leaders can use to foster effective labor-management cooperation, minimize costly forms of conflict (such as strikes),and seek win-win solutions to disagreement

Three (3) levels of decisions of Labor Relations:

• Labor relations strategy - the decision involves whether the organization will work with unions or develop (or maintain) nonunion operations.This decision is influenced by outside forces such as public opinion and competition. For unions, the decision involves whether to fight changes in how unions relate to the organization or accept new kinds of labor-management relationships.

• 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 employer’s situation for the term of the contract.

• Administering contracts —These decisions involve day-to-day activities in which union members and the organization’s managers may have disagreements. Issues include complaints of work rules being violated or workers being treated unfairly in particular situations. A formal grievance procedure is typically used to resolve these issues

WHY EMPLOYEES JOIN LABOR UNION?

1) Higher wages and benefits

- The power and strength of numbers sometimes help unions obtain higher wages and benefit packages for their members than employees can negotiate individually.

- Additionally, professional bargainers employed by the union may negotiate more skillfully than any individual could on his or her own behalf.

WHY EMPLOYEES JOIN LABOR UNION?

2) Great Job Opportunity

- Unions provide their members with a sense of independence from management’s power to arbitrarily hire, promote, or fire. The collective-bargaining contract will stipulate rules that apply to all members, thus providing fairer and more uniform treatment

WHY EMPLOYEES JOIN LABOR UNION?

3) Influence over work rules

- Where a union exists, workers can help determine the conditions under which they work and have an effective channel through which they can protest conditions they believe are unfair. Therefore, a union not only represents the worker but also provides rules that define channels in which worker complaints and concerns can be registered. Grievance procedures and rights to third-party arbitration of disputes are examples of practices typically defined and regulated as a result of union efforts.

WHY EMPLOYEES JOIN LABOR UNION?

4) Compulsory Membership

- union security arrangements - Labor contract provisions designed to attract and retain dues-paying union members.

a) union shop – This arrangement stipulates that employers, while free to hire whomever they choose, may retain only union members. That is, all employees hired into positions covered under the terms of a collective-bargaining agreement must, after a specified probationary period of typically thirty to sixty days, join the union or forfeit their jobs.

• b) closed shop - Union security arrangement under which a person must be a union member before being hired; illegal for those covered by the National Labor Relations Act.

• c) agency shop - A union security arrangement whereby employees must pay union dues to the certified bargaining unit even if they choose not to join the union.

• d) open shop - Employees are free to join the union or not, and those who decline need not pay union dues.

• e) maintenance of membership - Because unions must administer their operations in an open shop once someone joins the union, they must maintain their union affiliation and pay their dues for the duration of the contract. At the end of the contract, an escape period exists in which those desiring to leave the union may do so.

WHY EMPLOYEES JOIN LABOR UNION?

5) Dissatisfaction with the Management

- Among various reasons why employees join a union, we see one common factor: management, especially the first-line supervisor. If employees are upset with the way their supervisor handles problems, upset over how a co-worker has been disciplined, and so on, they are likely to seek help from a union. In fact, it is reasonable to believe that when employees vote to unionize, it’s often a vote against their immediate supervisor rather than a vote in support of a particular union.

Key Federal Labor Laws

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 1

Taft-Hartley Act - 1947

Norris-LaGuardia Act - 1932

Wagner Act - 1935

Railway Labor Act - 1926

Landrum-Griffin Act - 1959

Major Labor Laws and Their PurposesLAW PURPOSE

Railway Labor Act (1926) Protect railway and airline employeesand union members from actions of theiremployers

Norris LaGuardia Act (1932)(Anti-Injunction Act)

Restricts use of injunction in labordisputes

Wagner Act (1935)(National Labor Relations Act)

Protests employees and union membersfrom actions of their employers

Taft-Hartley Act (1947)(Labor Management Relations Act)

Protects employers from actions ofunions

Landrum-Griffin Act (1959)(Labor Management Reporting andDisclosure Act)

Protects union members from actions oftheir leaders

Civil Service Reform Act of 1978 Protects bargaining rights of federalemployees

UNION ORGANIZING

• 1.Authorization cards –

• two ways:

• a) consent selection - the employer and the union seeking representation arrive at an agreement stating the time and place of the election, the choices included on the ballot, and a way to determine who is eligible to vote

• b) stipulation selection - the parties cannot agree on all of these terms, so the NLRB dictates the time and place, ballot choices, and method of determining eligibility.

• 2) On the ballot, workers vote for or against union representation, and they may also have a choice from among more than one union. If the union (or one of the unions on the ballot) wins a majority of votes, the NLRB certifies the union. If the ballotincludes more than one union and neither gains a simple majority, the NLRB holds a runoff election

• 3) After certification, there are limits on future elections. Once the NLRB has certified a union as the exclusive representative of a group of employees, it will not permit additional elections for one year. Also, after the union and employer have finished negotiating a contract, an election cannot be held for the time of the contract period or for three years, whichever comes first.

UNION STRATEGIES

Beyond encouraging workers to sign authorization cards and vote for the union, organizers use some creative alternatives to traditional organizing activities

•1.Associate membership - Alternative form of union membership in which members receive discounts on insurance and credit cards rather than representation in collective bargaining.

•2.Corporate campaigns - Bringing public, financial, or political pressure on employers during union organization and contract negotiation.

LABOR UNION IN THE PHILIPPINES

• Labor Code of the Philippines – took effect November 1, 1974

• Implementing rules and regulations – took effect February 3, 1975

- most of the existing unions today are still creations of tihe Industrial Peace Act - otherwise known as the Magna Carta of Labor. These unions are undergoing the current transition period which is expected to culminate in the restructured trade union movement in the country as envisioned by the Labor Code

SOURCES OF LAWS,RULES AND REGULATIONS GOVERNING LABOR UNION

UNDER PRESENT LABOR RELATIONS:

• 1.The (New) Constitution of the Philippines

• 2. Labor Code of the Philippines

• 3. Rules and Regulations Implementing the Labor Code of the Philippines

• 4. Jurisprudence

RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS

Art. 242. Rights of legitimate labor organizations. A legitimate labor organization shall have the right:To act as the representative of its members for the purpose of collective bargaining;

To be certified as the exclusive representative of all the employees in an appropriate bargaining unit for purposes of collective bargaining;

To be furnished by the employer, upon written request, with its annual audited financial statements, including the balance sheet and the profit and loss statement, within thirty (30) calendar days from the date of receipt of the request, after the union has been duly recognized by the employer or certified as the sole and exclusive bargaining representative of the employees in the bargaining unit, or within sixty (60) calendar days before the expiration of the existing collective bargaining agreement, or during the collective bargaining negotiation;

RIGHTS OF LEGITIMATE (cont.)

To own property, real or personal, for the use and benefit of the labor organization and its members;

To sue and be sued in its registered name; and

To undertake all other activities designed to benefit the organization and its members, including cooperative, housing, welfare and other projects not contrary to law.

UNION ORGANIZING - PHILIPPINES1.Requirements of registration - Any applicant labor organization, association or group of unions or workers shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the following requirements.

• Fifty pesos (P50.00) registration fee;

•The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and the list of the workers who participated in such meetings;

•The names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate; (As amended by Executive Order No. 111, December 24, 1986)

•If the applicant union has been in existence for one or more years, copies of its annual financial reports; and

•Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and the list of the members who participated in it. (As amended by Batas Pambansa Bilang 130, August 21, 1981)

UNION ORGANIZING – PHILIPPINES (cont..)

• 2. Action on application - Bureau shall act on all applications for registration within thirty (30) days from filing.

• 3. Denial of registration - The decision of the Labor Relations Division in the regional office denying registration may be appealed by the applicant union to the Bureau within ten (10) days from receipt of notice thereof.

UNION ORGANIZING – PHILIPPINES (cont..)

4.Additional requirements for federations or national unions. Subject to Article 238, if the applicant for registration is a federation or a national union, it shall, in addition to the requirements of the preceding Articles, submit the following:

Proof of the affiliation of at least ten (10) locals or chapters, each of which must be a duly recognized collective bargaining agent in the establishment or industry in which it operates, supporting the registration of such applicant federation or national union; and

The names and addresses of the companies where the locals or chapters operate and the list of all the members in each company involved.

GROUNDS FOR CANCELLATION OF UNION

REGISTRATION Misrepresentation, false statement or fraud in connection with the adoption or

ratification of the constitution and by-laws or amendments thereto, the minutes of ratification and the list of members who took part in the ratification;

Failure to submit the documents mentioned in the preceding paragraph within thirty (30) days from adoption or ratification of the constitution and by-laws or amendments thereto;

Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, the list of voters, or failure to submit these documents together with the list of the newly elected/appointed officers and their postal addresses within thirty (30) days from election;

Failure to submit the annual financial report to the Bureau within thirty (30) days after the closing of every fiscal year and misrepresentation, false entries or fraud in the preparation of the financial report itself;

GROUNDS(cont..) Acting as a labor contractor or engaging in the "cabo" system, or otherwise

engaging in any activity prohibited by law;

Entering into collective bargaining agreements which provide terms and conditions of employment below minimum standards established by law;

Asking for or accepting attorney’s fees or negotiation fees from employers;

Other than for mandatory activities under this Code, checking off special assessments or any other fees without duly signed individual written authorizations of the members;

Failure to submit list of individual members to the Bureau once a year or whenever required by the Bureau; and

Failure to comply with requirements under Articles 237 and 238.

Impact of Union on Company Performance

Positive

•They can reduce turnover by giving employees a route for resolving problems.

•Unions emphasize pay systems based on seniority, which remove incentives for employees to compete rather than cooperate.

•The introduction of a union also may force an employer to improve its management practices and pay greater attention to employee ideas.

Negative

Decrease productivity because of work rules and limits on workloads set by union contracts and production lost to such union actions as strikes and work slowdowns.

Company’s profits may still suffer if unions raise wage and benefits costs by more than the productivity gain.Thus giving a negative impact on the company’s profit.

COLLECTIVE BARGAINING AGREEMENT

refers to the negotiation, administration, and interpretation of a written agreement between two parties that covers a specific period of time. This agreement, or contract, lays out in specific terms the conditions of employment—that is, what is expected of employees and any limits to management’s authority.

ADVANTAGES EMPLOYER

• Both sides know exactly what to expect from the other;

• They could both resort to some degree of protection

• Gives employer the benefit of dealing with a few representatives

• Consistency in the delivery of work by labor forces

• Ethical on the part of employer.

DISADVANTAGES TO EMPLOYER

• Only a few decides for the majority

• Unity in the company suffers

• Costly

• Restricts the power of employers

• Non-agreement could result to strikes

PROS FOR EMPLOYEES

Legally based relationship between employer and employee.

Bargain for wages and work practices

Employees take part in decision-making

Management authority can be questioned, when employees feel injustice

Favoritism and victimization is reduced.

CONS FOR EMPLOYEES

• Decisions by the union do not necessarily represent individual employees

• Employees may lose beneficial and constructive development program of employers

• Disproportionate effects between active and inactive member employees

• Bad work culture and inefficiency developed in employees

• Protects status quo, inhibits innovation

• Huge amounts spent by management in negotiations and agreements

ESSENTIAL ELEMENTS

1) Legal

2) Economic

3) Political

4) Moral

ISSUES TO DEAL WITH

• ECONOMIC

• Check –off (payment of union fees)

• Working & hours

• Salary increases/ allowances / bonuses, profit sharing

• Leaves

• Overtime/holiday/shift premiums

• Employee welfare hospitalization benefits, dental benefits

NON-ECONOMIC ISSUES

• Union recognition/coverage

• Definition of employees category

• Union security

• Rights &responsibilities of parties

• Security of tenure

• Seniority

• Grievance machinery

• Arbitration

• Job evaluation wage/salary administration

• Employees services (education, job enrichment

• No strike / no lockout

Objective of CBA

to agree on a contract acceptable to management, union representatives, and the union members.

Collective Bargaining Agreement Participants

1. Labor

2.Management

CBA PROCESS

Preparation

•Research & Data gathering

•Discussion/Arguing/Goal Setting

•Strategy Development/Signaling and notice

•Packaging

CBA PROCESS

Negotiation / Bargaining

-Soft Negotiation-Hard negotiation-Interest-Based negotiation-Closing-Agreeing

CBA PROCESS

3) Contract Implementation & Administration - once a contract is agreed on and ratified, it must be administered

a)Providing agreement information to all concerned requires both parties to ensure that changes in contract language are clearly explained.

b)Implementing the contract ensures that all communicated changes take effect and that both sides comply with the contract terms.

c)Interpreting the contract and grievance process is probably the most important element of contract administration. Almost all collective-bargaining agreements contain formal procedures for resolving grievances of contract interpretation and application. These contracts have provisions for resolving specific, formally initiated grievances by employees concerning dissatisfaction with job-related issues. It is necessary for the con- tract to spell out the procedures for handling contractual disputes.

d)Monitoring activities covered by the contract - the company and union can assess the effectiveness of the current contract, recognize when problem areas or conflicts arose, and indicate what changes might need to be made in subsequent negotiations