Module 10 - The Employment Relationship

Three Methods of Codetermination

1) Dual System In addition to the typical management board, there is a supervisory board. Because this supervisory board has the authority to accept or reject the management board's decisions, organizations are essentially prohibited from implementing workplace changes without employee consent. 2) Single-Tier System There is only one board of directors, but employee representatives are included as members. 3) Mixed System Employee representative are included, but they are only advisors.

Three Basic Approaches to Labor Relations

1. Acceptance 2. Avoidance 3. Adaptation

Handling Grievances

A contract almost always includes a formal grievance procedure. • This process provides an orderly way to resolve the inevitable differences of opinion in regard to the union contract that develop during the life of the agreement. • Some grievances address possible violations of the terms of contract, but many result from received unfair treatment of an employee by management with regard to disciplinary actions, privileges associated with seniority, or unfair and discriminatory treatment.

Codetermination

A form of corporate governance that requires a two-tiered corporate board structure that allows management and employees to participate in strategic decision making.

Arbitration

A negotiated procedure in which labor and management agree to submit disputes to an impartial third party and abide by the arbitrator's decision.

Mediation

Also known as conciliation is a method of non-binding dispute resolution involving a third party who tries to help the disputing parties reach a mutually agreeable decision.

Policy - ER Strategy

Broad statement that reflects an organizations philosophy, objectives, or standards concerning a particular set of management or employee activities.

Works Council Structures

Distinguished by their composition which can include: 1. Both management and worker representatives 2. Only worker representatives who are overseen by a member of management 3. Only worker representatives with no management oversight

Employment-at-Will (EAW)

Employers have the right at any time, with or without prior notice, to hire, fire, demote, or promote whomever they choose for no reason or any reason. The concept is usually reinforced in employee handbooks and other documents such as offer and acceptance letters as well as performance management documents.

Avoidance - Three Basic Approaches to Labor Relations

Employers may choose to avoid unionization because of the additional costs of managing a unionized workforce, the loss of flexibility in management decisions, and the increased time required to make and implement strategic decisions.

International Labor Organization (ILO)

Formed in 1919 as a result of the Treaty of Versailles following WWII and is now a specialized agency of the UN with a headquarters in Geneva. Grants representation to governments, employers, and worker groups.

Labor or Trade Unions

Group of workers who coordinate their activities to achieve common goals in their relationship with an employer or group of employers. Members elect representatives to interact with management.

Contract Administration and Enforcement

HR does what it can to make sure that the contract provisions are met. This may include educating managers and supervisors about new contract provisions, specific way in which their actions should reinforce the contract, and how to proceed if questions or problems arise. Effective education may prevent many grievances from occurring.

Outcome of Negotiation

If negotiation are successful, the result is a contract or collective bargaining agreement (CBA). The CBA governs the day-to-day relationship of the employer and the employees in the bargaining unit for the period of time it specifies.

Implied Contract Exemptions: Employment-at-Will

Implied contracts are difficult to prove but can be created through certain employer actions, promises, or statements made by individuals or the organization as a whole.

Employee and Employer Rights

International standards are significant to global organization developing or trying to apply standards across their organization.

Developing Workplace Policies - ER Strategy

Key to the employment relationship is the employer's clear communication of policies, often through an employee handbook or manual and a code of conduct or behavior.

Involving Managers and Supervisors - Employee Relationship Strategy

Managers and supervisors must understand the organizational ER strategy and how that strategy aligns with specific management practices. • This should include special training on the organizations policies and procedures, especially regarding the handling of conflict, discipline, and development opportunities.

World Trade Organization (WTO)

Mission is to open trade opportunities and to facilitate resolution of trade disputes.

Covenant of Good Faith and Fair Dealing Exemption: Employment-at-Will

Only applies in a few states and restricts actions that are seen as unjust or malicious.

Acceptance - Three Basic Approaches to Labor Relations

Organization may accept unionization for good reason. Unions may be the norm in certain industries. Some organizations may find the costs of fighting unionization efforts to be too high or too distracting.

UN Global Impact

Policy framework designed to help businesses develop, implement, and disclose policies and practices that meet sustainable goals in the areas of human rights, labor, the environment, and anticorruption.

Collective Bargaining

Process by which management and union representatives negotiate the employment conditions for a bargaining unit.

The Employment Relationship

The characteristics of the employment relationship is influenced by a country's economic history, conditions, culture, institutions, industrial practices, and individual employer values.

Organization for Economic Co-operation and Development (OECD)

The objective is to help both member and nonmember countries address globalization issues by researching and promoting changes in environmental, social, and economic policy.

Communicating the Employee Relationship Strategy

The organization must communicate the ER strategy to employees, and management must commit to the values implied in the strategy.

Pressing for National and International Compliance

Trade unions work with national and international bodies to implement the ILO's core labor standards and enforce compliance. • The World Bank requires borrowers to commit to the ILO's core labor standards.

Unions Have Responded to Globalization By

• Increasing formal international unions • Pressing for national and international compliance with labor standards • Implementing international framework agreements • Forming networks and alliances

Combined Factors That Influence Collective Bargaining

• Legal and regulatory factors • Bargaining precedents • Public and employee opinioT

Types of Union Structures

• Single Enterprises: All employees of an employer, regardless of job or skills, may be represented by a single enterprise union. • Specific Trades or Crafts • National Union • Industrial Union: Represents workers from different employers within a certain industry.

Key Differences that Shape an Organization's Labor Strategy

• The extent to which the enterprise's production is integrated among its subsidiaries • An enterprise's cultural attitude toward workforce relations, experience with labor/trade unions, and orientation towards its subsidiaries • The relationship between the originating company and its subsidiaries

Core Standards of World Trade Organization (WTO)

1) Freedom of association 2) No forced labor 3) No child labor 4) No discrimination at work

Core Labor Standards of ILO

1) Freedom of association and the right to organize without interference from public authorities or authorization by employers 2) The right of employees to organize and bargain collectively without retaliation and the obligation of employers to negotiate with unions 3) Prohibiting forced and compulsory labor, except for military service, prison, and emergencies (war, natural disaster) 4) Prohibiting forced labor as a means of political coercion or punishment, retaliation for strikes, workforce mobilization, labor discipline, and discrimination 5) Prohibiting the hiring of children too young to have completed compulsory schooling and limiting employment in hazardous work to those 18 and over 6) Prohibiting any work likely to be harmful to the health, safety, and morals of children 7) Requiring equal pay and benefits for men and women 8) Prohibiting discrimination in hiring, training, and working conditions and requiring employers to promote equality of opportunity and treatment

Four Strategic Objectives of ILO

1) Promote rights at work 2) Encourage decent employment opportunities 3) Enhance social protection 4) Strengthen dialogue on work-related issues

Principles of the UN Global Compact

1) Support and respect the protection of internationally proclaimed human rights 2) Make sure that they are not complicit in human rights abuses 3) Uphold the freedom of association and the effective recognition of the right to collective bargaining 4) Uphold the elimination of all forms of forced and compulsory labor 5) Uphold the effective abolition of child labor 6) Uphold the elimination of discrimination in respect of employment and occupation 7) Work against corruption in all its forms, including extortion and bribery

Seven Approaches to Managing Workforce Relationships

1. Hands-off Workforce relationship is entirely locally managed. 2. Monitor Headquarters tracks local management decision and demonstrates its interest and concerns, but it leaves decisions to be made locally. 3. Guide and Advise Headquarters offers more advice and tries to apply global policies to local practices, but it still leaves decision at the local level. 4. Strategic Planning Developed with an understanding of variation among workforces throughout the enterprise. Policies are set globally, but practices are developed locally. Practices must conform to global policies. 5. Set Limits and Approve Exceptions Adaptions may be made after review and approval by headquarters HR. 6. Integration of Headquarters and Line Management in Field Labor decision are made jointly. 7. Manage Locally from Headquarters Headquarters develop HR policies and practices.

Employee Grievance Process Steps

1. Immediate Supervisor File a grievance with the immediate supervisor. Supervisor must attempt to accurately determine the reason for the grievance and try to resolve the problem. Supervisors and union representatives can work together to solve the problem. 2. Next Level If the employee, supervisor, and union representative cannot solve the problem together, the grievance goes to the next level in the hierarchy. 3. Higher-Level Management If the grievance is not resolved within the time period set under the union contract, it goes to the next level. 4. Third-party Determination If the grievance is still not settled, a neutral outside arbitrator may be called in to settle the issue.

Characteristics HR Should Identify in Labor Groups

1. Level at which bargaining occurs • Is the employer bargaining individually or as part of an industry association and is the union representing an enterprise or an entire industry? 2. Focus on bargaining topics • What are fair topics for labor negotiations? 3. Union penetration or density • Percentage of workers that belong to a union. 4. Membership • Is membership in a union compulsory and who is allowed to be members? 5. Relationship with management • Is the relationship historically stormy or more cooperative? 6. Role government will pay • How likely is the government to become involved in the labor relationship?

HR's Role in Contract Negotiations

Based on their experience and metrics, HR can: • Suggest work processes that are most cost-effective and identify management proposals • Contribute suggestions based on HR's understanding of employee needs • Analyze contract language to identify potential misunderstanding or difficulties in administration that could result in later grievances • Provide negotiators with data about employee demographics and payroll and benefits costs • Identify unintended consequences of contract provisions so that they can be more fully considered • Identify clauses from preceding contracts that may be in conflict with new employment laws

Employee Handbooks and Codes of Conduct

Codes of conduct reflect ethical expectations. Policies should be developed with a goal of communicating effectively with employees . • Handbooks should be reviewed to make sure that they accurately reflect the organization's vision and values and are in compliance with local laws and regulations.

Public Policy Exemptions: Employment-at-Will

Employees may not be fired without cause if this violates state or federal laws. Terminations that can be proven to be in violation of a federal anti-discrimination law would not be protected under at-will doctrine.

Employment Contracts

Employer and employee rights and responsibilities are defined and agreements may be documented through employment contracts. • Employers benefit to avoid implied contract since implied contracts may include more generous dismissal compensation. • The strategy of amending contracts by firing and rehiring under new terms may not be legally defensible and may be considered unfair dismissal. • Contracts with international assignees and global employees should specify which country's laws will apply to the contract and what jurisdiction will be applied in the event of litigation.

HR Practitioner Role - Employee and Employer Rights

HR practitioners must be aware of the legal environments in the countries they operate. • Should establish with the counsel what preliminary and follow-up actions should be taken in different situations and what actions the employer should avoid. • All HR staff, managers and supervisors, and senior management should be trained to contact legal counsel as soon as possible when specific situations arise and to follow the prescribed protocol.

International Labor Standards

International standards are efforts made by international institutions to establish recognized expectations of the employee rights and employer responsibilities. These are significant to global organizations developing or trying to apply standards across their organizations.

Global Labor Strategies

Organizations must choose whether to adopt a unified, headquarters-defined strategy or to allow local operations to develop and pursue individual labor strategies. Some organizations establish benchmarks in one location that are then used for negotiating agreements in other locations.

Intellectual Property (IP)

The ownership of innovation by an individual or business enterprise. In an enterprise, IP is the product of employee creativity and enterprise resources. It can represent a considerable part of the value of a commercial enterprise, particularly in technology and communication companies. • Includes patented, trademarked, or copyrighted property, such inventions and processes, graphical images and logos, names, indications of geographic origin, architectural designs, and literacy and artistic works. • Protecting their rights can cause employers to become involved in physical and logical security surveillance practices.

Characteristics of Collaborative Labor-Management Relationship

• A greater acceptance of labor-management partnerships • An increased willingness to share power • More open and candid sharing of information • Joint decision making on issues of common concern • "Win-Win" bargaining techniques • Shared responsibility and accountability for results

An Organization's Employee Relations (ER) Strategy Should Include

• Alignment with the organizational strategy, showing how the ER strategy will help the organization achieve its long-term goals • Alignment with employment laws and business practices. In some areas and industries organizations cannot choose to avoid working with works councils and labor unions. Consulting with these third-party representatives may be required by law or be a traditional feature of an industry or nations employee relations • A vision describing the type of workplace culture the leaders hope to create • The values upon which the strategy is built; respect, teamwork , mindfulness of strategically defined issues such as customer focus, quality improvement, or safety • Strategic goals: - Develop a constructive and compliant relationship with labor organizations in the workplace - Implement communication plans that enable timely sharing of critical information or facilitate early resolution of ER issues • Strategic initiatives (a set of action plans to achieve the organizations goals)

Strategies for Improving Employer-Union Relations

• Comply with applicable international standards and local laws governing unionization and other workers' rights • Comply with local regulation regarding informing and involving workers • Develop fair grievance and alternative dispute resolution procedures with built-in appeals mechanisms • Implement joint study groups to solve common problems • Treat union members equitably and respectfully • Demonstrate genuine appreciation for employees' interest and involvement in workplace issues • Consult with union leaders to defuse problems before they become grievances

Governments and Other Groups

• Employer or industry associations The contracts may be at an industry level or at a national level • National government and agencies • International groups • Local governments, nongovernmental organizations, religious institutions, and community groups

Employer Rights Under the Law

• Employer rights have not received as much as attention on the international stage. • More often defined in local laws and individual and group employment contracts. • Employers are allowed to direct the work of employees and conduct their organizations as long as they comply with relevant laws and contracts. • They have the right to protect the organizations assets from damage, and they have the right to benefit from work performed by employees, unless contracts define other arrangements.

HR's Role in Labor or Trade Unions

• HR primary task is to support the organization's union relations strategy and administer contracts. • HR professionals should be familiar with the requirements unions must fulfill before they are allowed to represent employees bargaining. • Managers and supervisors should be aware of employers' rights during organization campaigns. • HR can assist in one of management's primary rights: the right to communicate to employees its reasons for preferring to remain union-free.

Contract Negotiation Process

• Negotiating process is designed to balance the rights and interests of employees, the union, and management through a two-way flow of communication • The general process followed is that the union submits a contract proposal to the employer. The employer then has a certain amount of time to respond to the proposal and to negotiate the items. • The goal of contract negotiations is to arrive at a workable contract that is mutually acceptable to both the union and the organization. Both parties have a responsibility to establish a contract that will contribute to an ongoing constructive relationship that fosters effective resolution of issues. • If the sides cannot agree, outside mediation and arbitration may be used

Work Councils

• Permanent bodies composed of workforce members that represent employees, generally on local or organizational level. • Their primary purpose is information consultation. • They are not involved in contract negotiation. • The councils were intended to cooperate with management to increase efficiency, promote harmony in the workplace, provide means of addressing grievances, supervise compensation, promote safety and health, and help administer welfare programs. • There are no work councils in the U.S. because they are seen as violations of section 8(a)(2) of the National Labor Relations Act. • Work councils might be seen as complementary to unions, barred from negotiating but empowered to apply contracts at a workplace level and to contribute to a workplace's cultural and social life.

Increasing Formal Internationalization of Unions

• The World Federation of Trade Unions (WFTU) was previously composed of unions from communist countries, but now focuses on developing countries. • The International Trade Union Confederation (ITUC) is the world's largest union federation. Focused on promoting international cooperation among trade unions and global campaigning. • The UNI Global Union was founded in 2000 to represent service-sector employees around the world. It has 900 affiliated unions in 150 countries.

Adaptation - Three Basic Approaches to Labor Relations

• When a workplace is already unionized, the employer can define the type of relationship they want with third-party representatives: confrontational or collaborative. • HR can help create and promote an organizational perspective that values positive and productive relations between management and union representatives. • HR can develop policies that reflect the willingness to work with the unions.