Labor Management Relations

Article XIII Sec. 3 of the Philippine Constitution on Labor-Management Relations, at a Glance:

 Full protection to labor, local and overseas, organized and unorganized;  Full employment and equality of employment opportunities for all;

Right of all workers to:  self-organization, collective bargaining and negotiations;  engage in peaceful concerted activities, including the right to strike in accordance with law;  security of tenure, humane conditions of work and a living wage; and  participate in policy and decision making processes affecting their rights and benefits as may to provided by law;

 Promotion of the principle of shared responsibility between workers and employers;  Preferential use of voluntary modes in setting disputes, including conciliation;  Recognition of the right of labor to its just share in fruits of production; and  Right of enterprises to reasonable return of investment and to expansion and growth.

Legal Basis
Sec. 3, Art. XIII, 1987 Constitution & Art. 3, Declaration of Policy, Labor Code The State shall assure the RIGHTS OF WORKERS to self-organization, collective bargaining, bargaining security of tenure, and just & humane conditions of work.

What is COLLECTIVE BARGAINING?

it is a process where representatives of the employer or management and the representatives of the labor union of an organization agree to fix and administer terms and conditions of employment which must not be below the minimum standards fixed by law, and set a mechanism for resolving their grievances.

According to the National Labor Relations Act:

For the purpose of this act to bargain collectively is 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 terms and conditions of employment, or the negotiation of an agreement, or any question arising there under, and the execution of a written contract incorporating any agreement reached if requested by either party, but such obligation does not compel either party to agree to a proposal or require the making of a concession.

What is Good Faith?

Bargaining in good faith is the cornerstone of effective labor management relations. It means that both parties communicate and negotiate, that proposals are matched with counterproposals, and that both parties make every reasonable effort to arrive at an agreement. It does not mean that either party is compelled to agree to a proposal. Nor does it require that either party make any specific concessions.

Purposes of collective bargaining:

1. To protect the workers; 2. To empower the workers; 3. To make the right of self-organization useful and meaningful; 4. To be the preferred mode of settling labor disputes before resorting to STRIKES; 5. To be the preferred mode over that of compulsory arbitration.

COLLECTIVE BARGAINING AGREEMENT

 a negotiated contract between the union representatives and the employer s representatives covering the terms and conditions of employment including proposals for adjusting any grievances or questions under such agreement

What is the advantage of having a CBA?

So that employees can secure better terms and conditions of employment over that provided by law.

What is the lifetime of a CBA?

Insofar as the representation aspect, the CBA lasts for 5 years. However, not later than 3 years after the execution of the CBA, the economic provisions shall be renegotiated.

Bargaining Items
Labor law sets out categories of items that are subject to bargaining:

MANDATORY BARGAINING ITEMS

There are about 70 basic items over which bargaining is mandatory under the law.
Wages

Rates of pay

Drug Testing of Employees Employee Security Holidays Profit Sharing Plans

Hours of Employment
Overtime Pay Shift Differentials Job Performance

Union Security

Insurance Benefits

Vacations

Management-Union Relationship Christmas Bonuses

Company housing, meals and discounts

VOLUNTARY OR PERMISSIBLE BARGAINING ITEMS

Are neither mandatory nor illegal; they become a part of negotiations only through the joint agreement of both management and union. Neither party can be compelled against its wishes to negotiate over voluntary items. You cannot hold up signing your contract because the other party refuses to bargain on a voluntary item.
Scope of the Bargaining Unit Pension Benefits of Retired Employees

Indemnity Bonds

Settlement of Unfair Labor Charges

Use of Union Label

Membership of Bargaining Team Including Supervisors in the Contract

Continuance of Past Contract

Management Right as to Union Affairs Employment of Strike Breakers Prices in Cafeteria

Additional parties to the contract such as the international union

ILLEGAL BARGAINING ITEMS

 are forbidden by law  A clause agreeing to hire union members exclusively would be illegal in a right-to-work state

Examples: Closed shop Separation of employees based on race Disc than teriminatory treatment

IMPASSE
In collective bargaining, an impasse (or deadlock) occurs when the parties are not to move further toward settlement. Usually occurs because one party is demanding more than the other will offer. Sometimes can be resolved through a third party - a disinterested person such as a mediator or arbitrator.

MEDIATION
An intervention in which a neutral third party tries to assist the principals in reaching agreement.

ARBITRATION
The most definitive type of third party intervention, in which the arbitrator usually has the power to determine and dictate the settlement terms.

STRIKES
Economic strike - a strike that results from a failure to agree on the terms of a contract that involves wages, benefits and other conditions of employment. Unfair labor practice strike - a strike aimed at protesting illegal conduct by the employer Wildcat strike - an unauthorized strike occurrence during the term of a contract Sympathy strike - a strike that takes place when one union strikes in support of the strike of another.

Contract Negotiation
 Majority of contract negotiations take place between unions and employers that have been through the process before. In most cases, management has come to accept the union as an organization that it must work with. But when the union has just been certified and is negotiating its first contract, the situation can be very different. In fact, unions are unable to negotiate a first contract in 27 to 37 percent of the cases.

 Labor Management Contracts differ in their bargaining structures but the actual contract agreement may be 20 or 30 pages long or longer. It may contain just general declarations of policy or a detailed specification of rules and procedures.  The tendency today is toward the longer, more detailed contract. This is largely a result of the increased number of items the agreements have been covering.

The main sections of a typical contract cover subjects such as these:

(1) Management rights, (2) union security and automatic payroll dues deduction, (3) grievance procedures, (4) arbitration of grievances, (5) disciplinary procedures, (6) compensation rates, (7) hours of work and overtime, (8) benefits: vacations, holidays, insurance, pensions, (9) health and safety provisions, (10)employee security seniority provisions, and (11)contract expiration date.

Negotiation
 Is a process of building a common interest and reducing differences in order to arrive an agreement which is at least minimally acceptable to all parties concerned.  Is the process that occurs when two or more parties, each of whom is seen as controlling some resource which the other desires, confer to reach an agreement on mutual exchange of the resources.

The Negotiation Process could be broken into four subprocesses:

1) Distributive Bargaining focuses on dividing a fixed economic pie between the two sides 2) Integrative Bargaining has a win win focus; it seeks solutions that are beneficial to both sides 3) Attitudinal Structuring refers to the relationship and trust between labor and management negotiators 4) Intraorganizational Bargaining reminds us that labor management negotiations involve more than just two parties

Management s Preparation for Negotiations can be divided into seven areas, most of which have counterparts on the union side:
1. Establishing inter departmental contract objectives 2. Reviewing the old contract 3. Preparing and analyzing data

4. Anticipating union demands 5. Establishing the cost of possible contract provisions 6. Preparing for a strike 7. Determining strategy and logistics

Negotiation Stages and Tactics

1. Early Stages: more people are present; union negotiators often raise an extensive list of proposals 2. Middle Stage: each side makes a series of decisions 3. Final Stage: pressure for an agreement increases as the deadline for a strike approaches; negotiators from each side may have one on one meetings or small group meetings where a neutral third party may become involved; impasse may occur

ow to Avoid Impasses
1. Separate the people from the problem 2. Focus on Interests, not positions 3. Generate a variety of possibilities before deciding what to do 4. Insist that the results be based on some objective standard

Management s Willingness to Take a Strike comes down to two questions:

1. Can the company remain profitable over the long run if it agrees to the union s demands? 2. Can the company continue to operate in the short run despite a strike?

Factors to consider / that gets affected when there is a strike:

1) 2) 3) 4) 5) Product Demand Product Perishability Technology Availability of replacement workers Multiple production sites and staggered contracts 6) Integrated facilities 7) Lack of substitutes for the product

Bargaining outcomes also depend on the nature of the bargaining process and relationships which include the type of tactics used and the history of labor relations.

Alternatives to Strike:
1) Mediation 2) Fact Finding 3) Arbitration

Contract Administration
 Hammering out a labor agreement is not the last step in collective bargaining; in some respects, it is just the beginning.  The contract negotiation process typically occurs only about every 3 years while contract administration goes on day after day, year after year.  Vague or incomplete contract language developed in the negotiat ion process can make administration of the contract difficult.

Grievance Procedure
 Key influence in successful contract administration  Procedure for resolving labor-management disputes over the interpretation and execution of the contract  From the employees perspective, it is the key to fair treatment in the workplace

New Labor-Management Strategies

Employee involvement in decision-making, Self-managing employee teams, Broadly defined jobs, and Sharing of financial gains and business information with employees