Lecture An introduction to collective bargaining and industrial relations (4e) – Chapter 11: Administering the employment relationship
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Chapter
11
Administering the
Employment Relationship
McGrawHill/Irwin
An Introduction to Collective Bargaining & Industrial Relations, 4e
Copyright © 2008 The McGrawHill Companies, Inc. All rights reserved.
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The Grievance Procedure
The grievance procedure specifies a series of steps to resolve a
worker’s complaint that management has not followed the
agreement
Grievances are most often precipitated by the complaint of an
employee against a supervisor
Steps of an employee initiated grievance procedure typically
include:
• Step 1. Employee discusses grievance with the supervisor
• Step 2. Grievance put into writing and parties discuss the
grievance; management puts response in writing
• Step 3. If unsuccessful, the grievance is appealed
• Step 4. Union decides whether to appeal to arbitration
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The Reasons Why Grievances Are
Filed
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Employee discipline is a common source of grievances
• The employee may feel that he/she did not violate the
contract, or that the discipline is too harsh
A contract simply cannot specify what is to happen
under all circumstances
• Unions and management prefer a grievance procedure
rather than trying to stipulate all potential issues of
future dispute
Grievance filings can be tactical to show union
discontent regarding an issue
• This will tend to rally the employees and increase
future bargaining leverage
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The Historical Evolution of Grievance
Arbitration
• The Spread of Arbitration
The advocacy of the War Labor Board during WWII
helped grievance arbitration to become a common
practice
Later, TaftHartley embedded grievance arbitration in
national labor policy
• Court Encouragement of Arbitration
A series of Supreme Court decisions known as the
Steelworkers’ trilogy encouraged the use of arbitration
and insulated arbitration awards from judicial review
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Judicial Deference to Arbitration
Court cases continued the basic principle of judicial
deference in the Steelworkers’ trilogy and added
modifications
In the Collyer decision of 1971, the court gave the
arbitrator the responsibility to rule on an unfair labor
practice issue
In the Olin decision of 1984, the courts broadened the
deferral of other unfair labor practice issues to
arbitration
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The Functions of Grievance
Procedures and Arbitration
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• Employee Interest in Due Process and Fairness
The grievance procedures protect workers and render
industrial justice
Alternatives to grievances could cost management more to
adjudicate
If employees were to lose confidence in the procedures,
they may turn to more costly and disruptive methods to
solve their problems
• Employer Interest in Labor Peace
Grievance procedures reduce the likelihood of work
stoppages
Some contracts allow workers to strike over health and
safety issues, since they may be urgent and potentially life
threatening
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Joint Interests in Continuity and
Consistency
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Both sides benefit from procedures that are consistent
and allow flexibility in addressing unforeseen
developments and unique needs
• Society’s Interest in Industrial Peace
Grievance and arbitration procedures serve the
interests of society by preserving industrial peace and
not overloading the courts
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How Arbitration Works
• The Components of Arbitration
Prehearing Briefs present the sides’ views before the
hearing
Stipulations are shorter than briefs, and are statements
of the issues in dispute and some key facts in the case
• The Arbitration Hearing
The parties present their positions and evidence to
support their cases
In disciplinary hearings, management will commonly
be asked to present their statement first
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The Arbitrator’s Decision
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• Some contracts stipulate time limits for the decisions, though
decisions are commonly rendered within 30 days
Arbitrators seldom add substantial punitive penalties to their
decisions
If reinstatement is ordered, the arbitrator could order the
company to pay the employee full wages that have been lost
• Arbitrator’s Decision Criteria
Most agreements require discipline to be for just cause
The arbitrator must first determine if the issue actually occurred,
then if it was a violation of the agreement
Arbitrators commonly require progressive discipline and allow
severe discipline for repeat offenses
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The Importance of Past Practice
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Arbitrators commonly rely heavily on custom
• If, for example, the company commonly suspended a
worker for one week for a third absence, the arbitrator
would not allow a more severe penalty on another
employee unless there were extenuating circumstances
• Arbitrators could turn to practice at another firm for
guidance, if no guidance on that issue were available at
the worker’s firm
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The Impact of Public Policy
Considerations in Arbitration
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• The role of the arbitrator is to decide grievances based upon
the collective bargaining agreement
• Events of the past two decades question whether arbitration is
responsive to public policies that govern employee rights
• Arbitrators are divided over whether they should consider
external laws when deciding a grievance
• Those who favor a more active role acknowledge that the
arbitrator's role would shift from one primarily serving the
interests of the agreement toward one serving public policies
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Who Are the Arbitrators?
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• They usually have some expertise in industrial
relations and are sometimes designated in the
agreement
• Some labor agreements provide for permanent
arbitrators
• Many arbitrators are parttime, and also work,
for example, as labor relations or law
professors
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The Union’s Decision to Go to Arbitration
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It is not a simple matter for the union to decide
to press a grievance to arbitration
Arbitration is costly
The union might drop the case even it is
winnable but insignificant
Unions must be careful to fulfill their “duty of
fair representation” (DFR) to the affected
employee
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The Duty of Fair Representation
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In 1944, the Supreme Court ruled that, in return for the
rights of exclusive representation, the union has the
duty to represent all members without discrimination,
fairly, impartially, and in good faith
Court held against “arbitrarily ignoring a meritorious
grievance or processing it in a perfunctory manner;
fraud, deceit, or badfaith conduct in the handling of a
grievance; and refusal to handle a grievance out of
personal hostility toward the grievant
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Union Responsibilities under the Duty of
Fair Representation
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1. Individual employee has a right to have the clear terms
of the contract enforced
2. Employee has no right to a particular interpretation of
the contract, but does have a right to have it applied
consistently
3. Union has no duty to carry every grievance to
arbitration, but must process arbitrations similarly on merit
4. Union cannot settle a grievance in bad faith
5. Union cannot trade an individual’s meritorious grievance
for the benefit of another
6. Union owes the employee reasonable care in
investigating the grievance
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The Connections between Grievance Procedures and 17
Other Aspects of the LaborManagement Relationship
• Contract Bargaining versus Contract Administration
The attitudes of the parties in negotiations typically carry
over into the administration of the contract
Cooperative attitudes between union and management
increased the likelihood that grievances would be settled at
the lower steps in the procedure
The number of issues in negotiations and the time until
settlement are correlated with the rate of grievances
• Fractional Bargaining: Informal bargaining with the
supervisor to modify the agreement
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The Functions of a Workplace Industrial Relations 18
System: Interrelationships and Outcomes
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Midterm or Continuous Bargaining
• The average length of collective bargaining
agreements appears to be increasing in the U.S.
FMCS data suggests the duration of nearly 40% of
new agreements is more than three years
• This requires some means of addressing issues that
arise during the term of the agreement in addition to
the grievance procedure
Can be done with “Letters of Agreement” that are
binding
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The Limits of Arbitration: Conflicts over
Technological Change
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Changes in technology can alter how work is performed
Computer aided design (CAD) is one example
• CAD can transfer drafting and similar jobs from their traditional
place within bluecollar production units to nonunit engineers
As new technologies evolve, disputes over such issues will
become more common
The Japanese industrial relations system may be better
suited to respond to changing technologies than the U.S.
• In Japan, both blue and whitecollar workers are in the same
union
Britain may be less able to respond to change, since
separate blue and whitecollar unions and a heavy reliance
on craft unionism slows adjustment
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Evaluating the Performance of the
Grievance System
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• Most employee complaints are resolved informally
• Low grievance rates may be a sign that unions are not
aggressively enforcing the terms of the contract
• Time and Costs of Settling Grievances
Two criteria that are commonly used to evaluate grievance
procedures are the time taken to settle claims and the cost
Although still shorter than litigation, the time to resolve an
arbitration is increasing
• In 2005, the average time for a settlement following the request for
an arbitrator was 401 days – plus an average 163 days following
the grievance filing
• Litigation is typically 23 years
In 2005, the average cost of arbitration was $3,732, compared to
typically more than $10,000 for litigation
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The Effects of Arbitration Decisions
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• Some reinstated employees face hostility of
supervisors and even fellow workers
Those who appealed grievance decisions later had
more negative performance and promotion experiences
Supervisors of grievance filers also faced similar
problems
Thus, the process should be used with caution
Both sides can learn from the grievance experience
and benefit from such changes
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Alternatives to the Grievance
Procedure in the Union Sector
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• The costs and delays of grievances and arbitrations have led to
some alternative procedures
Expedited Arbitration
• Parties agree to speed the disputes and bypass certain
steps and expedite time lines
Grievance Mediation
• Third party functions as both a mediator and arbitrator
• Empowered to settle the dispute if mediation fails
• Mediation settlements are quicker and less costly than
arbitration cases (in 1985 it was $309 versus $1,300,
and 19 days versus 52 days)
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Conflict Resolution in Nonunion Settings
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• The absence of a union does not eliminate the need
for conflict resolution
• Many employers have instituted complaint systems
for nonunion employees
These procedures are often the only direct recourse
available to nonunion employees who feel they have
been treated unfairly
• These procedures are often less consistent in ensuring
fair treatment than union grievance procedures
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Reasons for Adopting Nonunion Grievance
Procedures
• There are three major reasons why employers adopt
nonunion grievance procedures
1. A management strategy to improve performance of
the workforce
2. Employers may adopt nonunion grievance
procedures as part of union avoidance strategies
3. Employers may adopt nonunion grievance
procedures to reduce the risk of litigation from
employees.
