Labor Unions Demands and Prioritization - Book Report/Review Example

Labor Union Mock Negotiation Paper Table of Contents Labor Union’s Demands and Prioritization 3 Company’s Demands and Prioritization 5 Item’s willing To “Give” On By the Both the Sides and Its Reason 6 “Deal breakers” Issues and its Reasons 8 Length of the Contract and its Reasons 9 References 10 Labor Union’s Demands and Prioritization Labor unions are special interest groups which are formed by the organization of workers for the protection of their rights and their interests. Labor unions are responsible for negotiating with the management on behalf of the workers. In the provided case, ‘Local 5000’ represents the employees and undertakes collective bargaining with the company to maximize the benefits of its members (Farber, 2001). The top six demands according to their priority which the union should negotiate with the company are as follows: a) Hospital and Physician Claim: The medical insurance program which covers the entire bargaining unit does not include hospital and physician claim. As the company is into the manufacturing variety of auto accessories, there is always a risk of accident. In case of any severe accident, employees have to bear the hospital and physician charges. Also the company plans to eliminate treatment facilities in the hospital emergency room. Union should restrict the company from doing so. b) One representative to be offered the seat of company’s Board of Directors: The union should demand at least one seat for the union representative in the Board of Directors of the company. If there is a head authority representing the union at the top level, then it would be easy for the union to bargain with the management and present all their grievances. c) Wage deduction for insurance: The company plans to start a stiff deduction from wages of employees for the insurance program. As the cost of insurance is as high as $ 6899 per employee, company may charge higher amount from the employees to recover its insurance cost. The union has to demand that there should be no insurance deduction from the wages of the employees. d) Layoff needs to be controlled: There has been huge layoff by virtue of Indianapolis plan which numbered to 450. The company has already separated 250 employees from their job. Union needs to negotiate with the company about such a huge layoff of employees for more than 30 consecutive days that has led to instability of their jobs. e) Abolishment of two tier wage system: According to this system, workers hired after the new agreement was signed, would receive wages at lesser rate than those of existing employees. This will lead to differences between workers and can create misunderstanding among them. Union should abolish the two tier wage system. f) Bias attitude of supervisors: Supervisors were biased while selecting workers for extra time. They gave preference only to their close ones and neglected others. Union should inform management to change the supervisor and hire a fair and just supervisor who gives equal opportunity to all. Company’s Demands and Prioritization The top six demands according to their priority which the company should demand are as follows: a) Layoff should be maintained until the situation comes back to normal: Company should maintain layoff of extra employees till the demand for its products increases and state of automobile industry comes to normal. This will help the company to minimize extra cost. b) Working rules which are costing a lot of money should be checked: Working rules of the company for the employees with a lot of paid break in between are adding to the cost of company. Company should try to lessen the breaks for the workers. c) Company should create rules regarding frequent strikes by the workers: Frequent strikes by the workers on small issues have hampered the production of the company for two days. Company should demand workers not to go to strikes on small matters and create strict rules to minimize frequent strikes from workers side. d) Reduction in insurance cost: The Company has incurred huge cost in insurance of its workers which amounts to $6899 per employee. The company should maintain reserves from the wages of its employees to minimize its insurance cost. e) Two tier wage system: Company should start the two tier wage system for its workers. As most of the employees are below 10 years experience, the wage system will lead to less cash dispense and increase in revenue. f) Unnecessary involvement of stewards in grievances should be stopped: Company should stop unnecessary involvement of steward in strikes and unions grievances. It was estimated that on an average stewards spent 10 paid hours a week in unnecessary involvement. Item’s willing To “Give” On By the Both the Sides and Its Reason From the point of view of the labor union, it can be said that labor union should not inform management about the minor issues and try to solve within. One demand which the labor union should give up is the layoff by the management. As the demand for the goods of the company has gone down, there is no question of producing extra units. Therefore the labor union should comply with the situation and agree with the management for temporary layoff. Labors should not indulge in strikes on small matters which lead to great damage to the company. As the workers went to strike for negligible reason of steward who shoved a supervisor, the company had to suffer a two days loss in production. This should be checked by the workers. Another issue is that of overtime working due to governmental interference. The management had the right to require overtime from the workers and pay them for their effort, 200 workers unnecessarily created a mess at that point of time. Observing from the management’s point of view, management should also co-operate with the workers. Management should appoint back the steward “Old Joe” as he was one of the favorites and oldest members of the union. Doing so will help management in gaining confidence and faith of the employees. Management should also appoint a union representative as one of its Board of Directors. It will result in better negotiation with the workers and help in creating a better working environment. It would also be prudent if the company abolishes the two tier wage system and maintain an equal wage system for all. The supervisor who was biased in selecting the workers for overtime should also be replaced with another person. “Deal breakers” Issues and its Reasons Following conditions could possibly lead to strikes and lockouts and turn out to be “deal breakers” issues: a) Further protest of labors regarding layoff: If labor union does not comply with the problem of short demand of goods of the company and continue to protest against the management, then the company will be forced to retrench employees to reduce the number of workers and that of extra cost. This situation can lead to lockouts. b) Frequent strikes by labors: If labors continue to indulge in frequent strikes and lockouts on trivial issues and stop the production function of the company, then the company can take strict action against them and sue them for the damages incurred. This can also lead to strikes by labors. c) Deduction in wages of labors for recovering insurance cost: If the company starts deducting insurance cost from the wages of labors then they can protest against it with strikes and lockouts. d) Non – appointment of union representative as Board of Director: If the company does not appoint a union representative as one of its Board of Directors which employees feel is one of the main issues, they will not be able to properly address their problem to the management. In this case, union can resort to protests against the management, which might again result in lockouts. Length of the Contract and its Reasons A labor contract is an agreement between the employee and the management regarding the working conditions and other relevant issues. A contract primarily binds three parties to a contract which is the union, employer and the arbitrator. Presence of arbitrator is necessary to apply the language of contract (Sloane & Witney, 2010). In case of the provided scenario, the length of the current contract should be for 1 year. As there has been government interference on the working of the company and the current state of the automobile industry is also not good, thus there has been a constant change in the working environment of the company. The demand for its products has also gone down and it has been incurring extra cost in its operation. If the company enters into a long term contract with the labors then it cannot respond to sudden change in its environment. As for labor union, if the situation goes well within one year then the layoff can be minimized and job can be retained back. It will be more beneficial for the company as it can change its policies after one year keeping the then situation into consideration. But at the same time it will also help labor unions as they will not be in the periphery of the contract with the company for long time and can demand its needs after a short time period. It will lead to building better relation within the organization, better understanding of labor needs and ultimately creating a good industrial relation and sound working environment (University of Hawaii, 2007). References Farber, H. S., (2001). Industrial Relations Section. Notes on the Economics of Labor Unions. Retrieved Online on October 26, 2010 from http://www.irs.princeton.edu/pubs/pdfs/452.pdf Sloane, A. A. & Witney, F., (2010). Labor Relations. Prentice Hall. University of Hawaii, (2007). Collective Bargaining FAQs. What Is a Labor Contract? Retrieved Online on October 26, 2010 from http://clear.uhwo.hawaii.edu/CB-FAQ.html Read More