Labor Relations and Collective Bargaining Eighth Edition

Michael R. Carrell & Christina Heavrin Labor Relations and Collective Bargaining Eighth Edition www.prenhall.com/carrell PART III: Cost of Labor Contracts CHAPTER 8 Job Security and Seniority © 2007 Prentice Hall Inc. All rights reserved

Chapter Outline Job Security Seniority Calculation of Seniority Promotions Layoff and Recall Rights Advanced Notice of Shutdown Shared Work Determining Ability Company Mergers Successorship Employee Alcohol & Drug Testing Public Sector Security Issues

Labor News Railroad Unions, Carriers Clash Over Jobs 2005 contract talks between the five largest U.S. railroads and the unions that represent about 155,000 employees focused on one issue: job security . The employers proposed to eliminate the traditional crafts and consolidate them into a “transportation employee” category under one agreement. The unions opposed the change because it would: 1. Reduce the number of jobs 2. The unions are organized by crafts (engineers, conductors, switchmen, signalmen, firemen, oilers, maintenance) 3. Safety – the reduction from two workers (engineer, conductor) to one.

Job Security Workers’ demands for job security have never waned over the years, including: Guarantee of work Right to remain employed during times of layoff Recall rights during times of layoff Right to a fair hearing in discipline cases Industrial jurisprudence Generally embodies principle that operation of the organization will not be determined by a single individual or group of top management officials Employees have rights that guarantee input into important decisions regarding their employment

Ultimate labor-management conflict Management needs a free hand in workplace operations Labor requires protection against unreasonable managers and a voice in decision making Theories used to justify staffing decisions based on seniority Human capital theory Implicit contract theory Internal labor market theory Larger unions able to negotiate more job security provisions Job Security (cont.)

Seniority Seniority system Set of rules governing the allocation of economic benefits and opportunities on the basis of service with one employer Most commonly negotiated method of comparing employees for promotions and layoff-recall decisions

Seniority is the most important measure of employee job security Easy to define and measure Management would prefer to use performance appraisals as the basis for employment decisions Labor views performance appraisals as subjective Seniority is not required by law nor is it an inherent right of employees Mandatory subject of collective bargaining Seniority (cont.)

Calculation of Seniority New employees generally begin acquiring seniority on the date & time of hire Seniority may not be awarded until completion of probationary period Seniority list Created to ensure complete agreement regarding seniority rights of each employee Seniority rights vested within a variety of employee units Bumping Employees with greater seniority, whose jobs have been phased out, have the right to displace workers with less seniority, if they are at least “as qualified”

Seniority Rights Departmental Plantwide Classification Employee units in which seniority rights are vested Combination Companywide

Seniority and the ADA U.S. Airways, Inc. v. Barnett Employee is not entitled to a job assignment as a reasonable accommodation of his disability if the assignment would conflict with the rules of a bona fide seniority system Superseniority Union officers and committee personnel have preferred seniority rights for layoff and recall situations Value of superseniority depends on the frequency and degree of layoffs typically experienced in the company Calculation of Seniority (cont.)

Promotions Management’s position: Often disagrees with the use of seniority in promotion Contend that promotion should be based on performance and required skills Contend that promotion based on seniority takes away employee incentive Only 5 percent of collective bargaining agreements use seniority as the sole determinant of promotion Unless restricted by contract, mgmt. can fill temporary vacancies Promotion

Most labor agreements use both seniority and qualifications jointly to determine promotions Difficult to determine: Weight of each factor Method for measuring skill (i.e., qualifications) Arbitrators typically hold that management has the right to judge, weigh, and determine qualifications as long as methods are fair and nondiscriminatory In most disputed cases, the employer’s decision is supported Job bidding To avoid grievances, process is detailed in the labor agreement Promotions (cont.)

Layoff and Recall Rights Seniority is of less importance when layoffs are temporary or of an emergency nature Cumbersome seniority rules need not be followed for brief layoffs Probationary employees usually are laid off first Layoffs in skilled trades commonly occur by seniority within the trades or classifications

Layoff procedures fall into three categories Layoff based entirely on seniority Layoff based on seniority among employees that management believes are capable of performing the work Layoff based on seniority only if ability and other factors are equal (arbitrators interpret “equal” as “relatively equal”) Firefighters Local Union No. 1784 v. Stotts Upheld a seniority system even though the resulting layoffs adversely affected employees hired under a consent decree to remedy past discrimination Layoff and Recall Rights (cont.)

Recall Contracts usually call for recall on the basis of plantwide seniority Ability is not usually questioned by management Temporary workers Unions want to add them to the bargaining unit Layoff and Recall Rights (cont.)

Advanced Notice of Shutdown Worker Adjustment and Retraining Notification Act (WARN) - 1988 Employers required to apprise workers and local communities of plant closings or mass layoffs 60 days advance written notice required once decision is made Advance notice of temporary shutdown required whenever: A large enough number of workers affected for more than six months At least 50 employees and 33 percent of all employees 500 or more employees are laid off

Worker Adjustment and Retraining Act (cont.) WARN affects most private sector and nonprofit employers Does not supercede state laws or labor agreements that require additional assistance or notification Exemptions raise questions about effectiveness of the law Half of all contracts provide for additional notice beyond that required by WARN WARN gives communities and workers time to prepare United Food and Commercial Workers Union Local 751 v. Brown Group, Inc. If employer did not provide sufficient notice of a plant closing, union may sue on behalf of affected workers Advanced Notice of Shutdown (cont.)

Shared Work Workers have their work time reduced E.g., workers’ hours cut by one day per week Union opinions Preferable for 100 percent of employees to work 80 percent of their regular hours than to have 80 percent of employees work 100 percent of their regular hours Without shared work, 20 percent of employees would be laid-off Long-term use of shared work is not endorsed Management has been slow to support these concepts

Determining Ability Generally agreed that management has the right to determine how ability is to be measured Specific factors may be limited by the contract Challenges to management’s determination of ability Employer has burden of proof to show that a bypassed senior employee is not competent for the job Employer not required to show that a junior employee is more competent

Determining Ability (cont.) Experience Trial period Tests Criteria used to determine employee ability Physical fitness Educational background Attendance records Production records Opinion of supervisor

Company Mergers One, or a combination of principles may be used to combine seniority lists: Surviving group principle - seniority lists are merged by adding names of employees of acquired company to the bottom of seniority list of the acquiring company Length of service principle - employee’s length of service is considered, regardless of which company he/she worked for prior to the merger Follow the work principle - employees are allowed to continue previously earned seniority on separate seniority lists when their work with the merged company can be separately identified

Methods used to combine seniority lists (cont.) Absolute rank principle - employees receive rank positions on the merged seniority list equal to their rank position on the prior seniority lists Ratio-rank principle - ratios established based on the total number of employees in the two groups to be merged Company Mergers (cont.)

Subcontracting: Arranging to make goods or perform services with another firm that could be accomplished by the bargaining unit employees within the company’s current facilities Management’s insistence on its right to subcontract often leads to grievances Fibreboard Paper Products v. NLRB Subcontracting is a mandatory subject for collective bargaining Arbitrators use standards of reasonableness and good faith in determining whether clauses in contract have been violated by subcontracting Scope clause: prohibits outsourcing of any work if union member is on furlough Subcontracting, Outsourcing

Subcontracting (cont.) Type of work involved Past practices Effect on union Unusual circumstances Arbitrators’ standards in subcontracting cases Justification History of negotiations Regularity of subcontracting Effect on unit employees Availability of qualified workers Availability of equipment and facilities Duration of subcontracted work

Relocation Moving work previously done at one location by union workers to another location that is generally nonunion Issue is intertwined with subcontracting Dubuque Packing Co. v. NLRB Relocating work is a mandatory bargaining subject Reversed previous court decisions Unless an agreement contains specific language barring subcontracting, a union will have difficulty stopping it

Successorship Result of either a change in collective bargaining representative or employer Change in collective bargaining representative Existing collective bargaining contract is not binding for the successorship representative Change in employer If industry remains the same, successor employer required to recognize existing collective bargaining unit Not bound by existing collective bargaining agreement

Fall River Dyeing v. NLRB Court suggested three factors for application of successorship doctrine Substantial continuity Appropriate bargaining unit Predecessor’s workers Successor employer has several rights, including the rights to: Hire its own workers Disregard the predecessor’s labor contract Set the initial terms of employment Successor employer may be obligated to remedy unfair labor practices and grievances of predecessor Successorship (cont.)

Employee Alcohol and Drug Testing Important job security issue Unions concerned about: Unreliable and/or biased tests Invasion of privacy NLRB has ruled that drug testing is a mandatory subject of bargaining Testing of job applicants who are not members of the bargaining unit is a management right

Pre-employment testing policies address: Notification No rescheduling of test Test validity Confidentiality Drug testing policies Random Probable cause After accidents Employee Alcohol and Drug Testing (cont.)

Employee Alcohol and Drug Testing (cont.) Employee attitudes toward drug testing Random testing has aroused strongest criticism Unions insist on probable cause or accident-related program Negotiation issues Valid testing procedure On-the-job impairment Refusal to be tested Supervisor training

Public Sector Security Issues 2005 California election: job security of public employees was central issue, unions defeated initiatives of Gov. Schwarzenegger Privatization Outsourcing public sector work to the private sector Unions try to prevent civil service employees from losing their jobs to contract labor Difficult to negotiate if management intends to outsource Contract labor treated differently

Privatization (cont.) Advocates of Privatization • Produces better management of programs • Frees public administrators from day-to-day operations • Provides specialized skills otherwise too costly for government to hire • Reduces capital outlays for facilities and equipment • Motivates private sector managers to perform well Opponents of Privatization • Savings often are illusory • Dependence on contractors makes governments more vulnerable to cost increases • Private contractors expect to earn a profit • Laying off government employees results in unemployment compensation • Lowers quality of service • Lose in-house expertise

Public Sector Security Issues (cont.) School vouchers Provide public funds that can be used for private schools Force public schools to improve in order to remain competitive Zelman, Superintendent of Public Instruction of Ohio v. Simmons-Harris Court upheld an Ohio voucher program

Public employee drug testing Executive Order 12564 Provided drug testing of federal workers Court stated that employees, whose duties involve public safety or law enforcement, may be tested Not a violation of the Fourth Amendment Public Sector Security Issues (cont.)

Labor Relations and Collective Bargaining Eighth Edition