Exam 16: Union/Management Relations

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Collective bargaining, the last step in unionization, is the process whereby representatives of management and workers negotiate over wages, hours, and other terms and conditions of employment. This goal of this give-and-take process between representatives of the two organizations is to establish conditions beneficial to both. A collective bargaining agreement will typically be in force for several years, therefore both sides attempt to negotiate terms that they can live with for some time. The bargaining process balances the power between the parties.
The collective bargaining process involved in negotiating a contract consists of four possible stages: preparation and initial demands, negotiations, settlement or impasse, and strikes and lockouts.
Preparation and Initial Demands: Management and union representatives have a great deal at stake and therefore they spend substantial time and effort to prepare for negotiations. Employer and industry data concerning wages, benefits, working conditions, management and union rights, productivity, safety, and absenteeism are gathered. The amount of rancor or calmness exhibited may set the tone for future negotiations between the parties. Each side presents its list of demands to the other to begin the bargaining process. If the organization argues that it cannot afford to pay what the union is asking, then they must provide evidence of their financial status. The primary focus of bargaining for both union and management is on the mandatory areas of wages, benefits, and working hours and conditions.
Continuing Negotiations: After taking initial positions, each side attempts to determine what the other side values highly so that the best bargain can be struck. For example, the union may be asking the employer to pay for dental benefits as part of a package that also includes wage increases and retirement benefits. However, the union may be most interested in the retirement benefits and may be willing to trade the dental payments for better retirement benefits. Management must determine what the union has as a priority and decide exactly what to give up.
Settlement and Contract Agreement or Impasse:After reaching an initial agreement, the bargaining parties usually return to their respective constituencies to determine if the informal agreement is acceptable. A particularly crucial stage is ratification of the labor agreement, which occurs when union members vote to accept the terms of a negotiated labor agreement. Before ratification, the union negotiating team explains the agreement to the union members and presents it for a vote. If the members approve the agreement, it is then formalized into a contract.
Regardless of the structure of the bargaining process, labor and management do not always reach agreement on the issues. If they reach an impasse, then the disputes can be taken to conciliation, mediation, or arbitration.
Strikes and Lockouts: If a deadlock cannot be resolved, an employer may revert to a lockout-or a union may revert to a strike. During a strike, union members refuse to work to put pressure on an employer.
In a lockout, management shuts down company operations to prevent union members from working. This action may avert possible damage or sabotage to company facilities or injury to employees who continue to work. It also gives management leverage in negotiations.