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CHAPTER 15 Working with Organized Labor

CHALLENGES

After reading this chapter, you should be able to deal more effectively with the following challenges:

1 Understand why employees join unions.
2 Describe labor relations and the legal environment.
3 Understand labor relations in the United States.
4 Become aware of labor relations in other countries.
5 Gain familiarity with labor relations strategy.
6 Learn practices for managing the labor relations process.
7 Recognize the impact of unions on human resource management.

Working with organized labor can be challenging. One of the greatest challenges managers experience is when union representatives and management are unable to come to an agreement on employee wages, hours, and working conditions and the union decides to exercise its right to strike. On the morning of September 24, 2007, 74,000 members of the United Auto Workers (UAW) left their jobs at General Motors (GM) factories and began picketing in public areas near the factories. The union had just launched a nationwide strike for the first time in 37 years. The union’s leader, Ron Gettelfinger, expressed sorrow that a deal could not be reached.1

The strike between the UAW and General Motors lasted only two days before a new labor agreement was reached. The big sticking point that led to the breakdown in negotiations was the issue of health care costs. The centerpiece of the agreement that was ratified by the union membership was the creation of an independent trust that took over some $51 billion of health care liabilities for GM’s existing employees and over 280,000 of its retired workers. Health care costs added as much as $1,600 to the price of each GM vehicle, and it was critical to management to find a way to reduce these costs. Global competitors in the auto industry in Asia and Europe did not face such expensive health care costs, because governments in other countries often cover the cost of health insurance. Over the years prior to the strike, GM had lost market share in the United States to competitors such as Toyota, Honda, and Hyundai, who had much lower employee health costs than GM.

Source:Russell Shively/Shutterstock.

The trust was set up with about $35 billion and allowed GM to get the liability of providing health care funds for large numbers of retirees off its balance sheet.2 The union benefited from this deal on health care costs because it protected its members against the possibility that GM would be unable to meet its health coverage obligations for retired union members.3

The Managerial Perspective

The relationship between managers and their employees changes in a unionized organization. The law requires managers to meet and confer with elected union representatives when making decisions that affect pay, hours of employment, or working conditions. When unionized employees are dissatisfied with pay or other job factors, the company faces the possibility of a strike or other form of collective action designed to pressure the firm to respond to employees’ preferences. Managers, then, need to understand the basics of labor relations and labor law to handle day-to-day labor–management relations effectively.

The presence of a union increases managers’ need for HR services. HR specialists in labor relations can help managers develop tactics and strategies to work constructively with the union and its representatives in areas such as negotiating the terms of new labor contracts, interpreting a labor contract, or responding to an employee grievance. Managers that grasp the basics of labor relations will know when to turn to HR specialists and what questions to ask.

In this chapter, we explore the labor–management relationship between companies and unions. We begin by examining why employees join unions and why some employers prefer the workplace not to be unionized. Second, we outline the major U.S. legislation that governs labor issues and describe the current labor-relations climate in the United States and in some other countries. Third, we investigate different labor relations strategies and explore the rules and procedures that govern union activities. Finally, we address the impact of unions on a variety of HR practices.

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Table of Contents for CHAPTER 15 Working with Organized Labor

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Table of Contents for
CHAPTER 15 Working with Organized Labor