Labor RelationsLabor Relations

AgendaAgenda

History of Labor Movement in the U.S. Why Do Employees Join Union? Union Structure in the United States Collective Bargaining Labor Relations in Multinational Corporations Comparative Labor Relations Labor Union Limits Strategic Choices of MNCs International Labor Relations Employee Health and Safety

IssuesIssues

Why is it important to understand the historical origins of national industrial relations system?

In what ways can labor unions constrain the strategic choices of multinationals?

What are the differences in labor management around the world?

Labor UnionLabor Union

What is union? Union is a formal association of workers

that promotes the interests of its members through collective action.

The status of unions varies among countries depending on the culture and the laws that define union/management relationships.

History of Labor Movement in the U.S.History of Labor Movement in the U.S.

The Labor Movement before 1930

Late 18th Century, associations brought workers in

craft together to consider problems of mutual

concern. The Labor Movement after 1930Anti-Injunction Act (Norris-LaGuardia Act)--1932:

Affirming the sanction of collective bargaining by U.S.

public policy and approving the formation and operation

of labor union (Great Depression, unemployment 25%)

History of Labor Movement in the History of Labor Movement in the U.S.U.S.

National Labor Relations Act (Wagner Act) --1935:

Declaring legislative support for the right of employees to

organize and engage in collective bargaining.

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

1947 (the beginning of the evolution of public policy

regarding labor)

Right-to-work Laws are laws that prohibit management

and unions from entering into agreements requiring union

membership as a condition of employment.

History of Labor Movement in the U.S.History of Labor Movement in the U.S.

Labor-Management Reporting and Disclosure Act (Landrum-Griffin Act)--1959

This act marked a significant turning point in the involvement of the federal government in internal union affairs, spelled out a Bill of Rights for members of Labor Organizations designed to protect certain rights of individuals in their relationships with unions, required extensive reporting on numerous internal union activities and contained severe penalties for violations.

History of Labor Movement in the History of Labor Movement in the U.S.U.S. The Labor Movement into the Year 2000Organized labor union new strategies for a stronger

movement involve practices such as:

Political Involvement: unions endorse candidates at all

levels of politics, then attempt to deliver the vote of their

membership.

Union Salting: involving trained union organizers

applying for jobs at a company and once hired, working

to unionize employees.

History of Labor Movement in the U.S.History of Labor Movement in the U.S.

Flooding the community: requiring unions to

flood communities with organizers to target a

particular business.

Corporate labor campaigns: involving labor

maneuvers that do not coincide with a strike or

organizing campaign to pressure an employee

for better wages, benefits, and the like.

Increasingly, these campaigns are used as an

alternative to strikes because more employers

are willing to replace their striking employees.

History of Labor Movement in the U.SHistory of Labor Movement in the U.S

Team work for Employees and Management Act (Team Act): In 1996, both houses of Congress proposed this act, which allows selected workers and managers to discuss wages, hours, and working conditions in a nonunion setting, a practice now illegal under the National Labor Relations Act.

Why Do Employees Join Union?Why Do Employees Join Union?

Some of the major reasons are:Dissatisfaction with management Compensation (fair and equitable) Job security (full-time employee) The attitude of Management (people-center management)

A social outlet (social needs) Opportunity for leadership (aspiration for leadership role)

Forced unionization (require to join a union)

Peer pressure (urged by colleagues)

Union Structure in the United StatesUnion Structure in the United States

The labor movement has developed a multilevel

organizational structure over time. The Local Union:

Local union is the basic element in the structure of

the U.S. labor movement. Two kinds of local

unions: craft and industrial.A Craft union: A bargaining unit, such as the carpenters that

is typically composed of members of a particular trade or

skill in a specific locality.

An industrial union: a bargaining unit that generally consist of all the

workers in a particular plant or group of plants.

Union Structure in the United StatesUnion Structure in the United States National Union:

A national union is composed of local unions,

which it charters. It is the parent organization to

local unions.

The American Federal of Labor and Congress of

Industrial Organizations (AFL-CIO) is the central

trade union federation in the United States and is a

loosely knit organization of more than 90 national

unions. No formal power of control. The AFL-CIO

represents about 13 million members in 78 unions.

Union Structure in the United StatesUnion Structure in the United States

The federation’s major activities include the following:

1. Improving the image of organized labor

2. Lobbying extensively on behalf of labor interests

3. Politically educating constituencies and others

through the Committee on Political Education

4. Resolving disputes between national unions

5. Policing internal affairs of member unions

Collective BargainingCollective Bargaining

Collective Bargaining: The performance of the mutual obligation of the employer and the representative of the employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment, or the negotiation of an agreement, or any question arising thereunder, and the execution of a written contract incorporating any agreement reached if requested by either party; such obligation does not compel either to agree to a proposal or require the making of a concession.

Typical Collective Bargaining ProcessTypical Collective Bargaining Process

Union ManagementPreparation [ ]

Initial Demands

Impasse

Continuing [ ] [ ]

negotiations

Settlement & [ ]

Contract

Labor Relations in Multinational FirmsLabor Relations in Multinational FirmsTrade Union Structure in Leading Western Industrial Societies

Australia general, craft, industrial, white-collar

Belgium industrial, professional, religious, public

Canada industrial, craft, conglomerate

Denmark general, craft, white-collar

Finland industrial, white-collar, professional and technical

Great Britain general, craft, industrial, white-collar, public sector

Japan enterprise

The Netherlands religious, conglomerate, white-collar

Norway industrial, craft

Sweden industrial, craft, white-collar and professional

Switzerland industrial, craft, religious, white-collar

United States industrial, craft, conglomerate, white-collar

West Germany industrial, white-collar

Labor Relations in Multinational FirmsLabor Relations in Multinational FirmsUnion structures differ considerably among west countries: Industrial Unions represent all grades of employees in

an industry Craft Unions are based on skilled occupational

groupings across industries Conglomerate Unions represent members in more than

one industry General Unions are open to almost all employees in a

given country

These differences in union structures have had a major

influence on the collective bargaining process in Western

countries.

Comparative Labor Relations (Comparative Labor Relations (pp159-164pp159-164))

France: five major national unions in France with most large employers also having a “company union.” Large employers deal with three different employee bodies: personnel delegates, works councils, and union delegates.

Italy: low union membership, 40%; but higher employee coverage for agreements, 65%

Germany: Union membership, 35%; Unions by industry with negotiations on a national level

Comparative Labor RelationsComparative Labor Relations

Great Britain: The labor relations system in Great Britain differs markedly from those in both the U.S. and other European countries.

Union power in Britain, measured by political influence and industrial strength as well as by membership, was undoubtedly at a postwar peak. Managers in Britain still face a workforce that is highly unionized.

Comparative Labor Relations)Comparative Labor Relations) The Netherlands: mutual consultation and

cooperation at all levels (national, sector, and firm)

Japan: 33,750 unions, only at the firm level (Personnel practices: lifetime employment, seniority-based promotions, and firm-performance-based bonuses)

Canada: About one-third of the Canadian labor force is unionized. Majority representation is necessary for unions to gain certification, which is required for mandatory collective bargaining.

Comparative Labor Relations (Comparative Labor Relations (pp159-164pp159-164))

Central and South America: Close relationship between the unions and the government, many rights and benefits for workers have been codified in law.

Mexico: Unions need only 20 employees to force negotiations with an employer, Agreements on wages are negotiated on an annual basis while the rest of the contract typically lasts for two years.

Africa: Unions are underdeveloped. Some national confederation of unions, but most union activity in Africa takes place at the firm level.

Comparative Labor Relations (China)Comparative Labor Relations (China)

All firms are required to establish trade unions (workers’ unions) by Chinese law. Chinese trade unions are under the leadership of the Party. In government organizations at all levels (national, provincial, municipal, and county), there are trade unions at organization level, such firms and universities. Chinese trade unions were in the past involved more in the workers’ welfare rather than management.

Comparative Labor Relations (China)Comparative Labor Relations (China)

In early 1990s, the new law of Trade Unions’ was drafted by All-China Federation of Trade Unions. Accordingly, trade unions participated in the making of laws related to the interests of workers, such as laws covering minimum wages, working hours, employment protection, social welfare, and unemployment benefits.

Trade unions in China now in many enterprises seek to help the management to achieve the organizational goals. They have participated in the management , such as planning for enterprise goals and objectives, monitoring the implementation of labor contracts, and safeguarding workers’ interests and rights.

Comparative Labor Relations (China)Comparative Labor Relations (China)

Since the economic reform in 1978, many MNCs have invested in China and the trade unions faced the issue of how a workers’ union should function under a management joined by Chinese socialist enterprises and capitalist investors from the West. After recent practice in reform, many trade unions in joint ventures have succeeded in helping workers adapt to the new management style and in working with management.

Labor Union Limits Strategic Choices of MNLabor Union Limits Strategic Choices of MNCsCs

Labor unions may limit the strategic choices of

MNCs in the three ways: by influencing wage levels to the extent that cost s

tructures may become uncompetitive, by constraining the ability of MNCs to vary empl

oyment levels at will (Many countries have legislation that limits the ability of firms to carry our plant closure, redundancy or l

ayoff programs) , and by hindering or preventing global integration of th

e operations of MNCs.

International Labor RelationsInternational Labor Relations Regional Integration: The European Union (EU)

The Single European Act was to established the Single European Market (SEM) on December 31, 1992 in order to enhance the free movement of goods, money, and people within the SEM. The social policy in the Treaty includes improvement of workers’health and safety, information and consultation of workers, integration of persons excluded from the labor market, and equality of opportunity, and at work, between men and women. But, the Treaty excludes matters of pay, the right of association, and the right to strike or to lock out.

International Labor RelationsInternational Labor Relations

Regional Integration: The North American Free Trade Agreement (NAFTA)

The NAFTA agreement was signed by the governments of the United States, Canada, and Mexico in December 1992, ratified by the U.S. Congress in November 1993, and came into force in January 1994 (NAFTA is a free trade zone, not a common market, dealing only with the flow of goods, services, and investments among the three trading partners, not addressing labor mobility or other common policies). the North American Agreement on Labor Cooperation (NAALC) came into effect in 1993.

Employee Health and Safety Employee Health and Safety Health refers to employees?freedom from physical

or emotional illness. Safety involves protecting employees from injuries

caused by work-related accidents. The Occupational Safety and Health Act (OSHA) of

1970 in the States. Developing Safety Programs, Wellness Programs,

Physical Fitness Programs, Stress Management Programs

Global Health and Safety: Expatriates need to be prepared for safe travel, coping with stress, concerning smoking in the workplace, AIDS,

terrorism, crime, and a variety of environmental considerations.

DiscussionDiscussion Identify some characteristics of

multinationals that give labor unions cause for concern.

How have labor unions responded to multinationals? Have these responses been successful?