Discussion #1 During an economic recession, discuss how management\'s or a union
ID: 367258 • Letter: D
Question
Discussion #1
During an economic recession, discuss how management's or a union's bargaining power might be affected. Give an appropriate business example to illustrate what you mean, support it with at least one reference.
Discussion #2
Locate and briefly summarize a case decision where an employer or union was found guilty of bad faith bargaining ( or not!). Briefly summarize the decision and explain whether you agree or disagree with the outcome.
Make sure to post the URL and the full APA reference.
Explanation / Answer
Solution:-
Economicrecession is a period of time in which there is general economic decline, high level of unemployment, drop in the value of stock market, and decline in the housing market. Union plays a dominant role in a firm to get better wage rate. They bargain with the owners for good wage otherwise they will not continue the job. Due to this reason, workers union influence the wage rate in the market and helps the workers to get good wage.
With the occurence of economic recession, profit of the firms decreases due to this they are not able to meet the expenses of the firm. As a result, firms fired some workers so that their cost of production will decline. In this position, union's bargaining power reduces as workers know that in this period if they bargain, firm will fire all the workers without any discussion. Due to threat of unemployment, workers work on the present wage and does not demand more wage. Workers also familier that at the time of recession they will not be able to get a new job so soon because of depression in stock market, housing market etc. Firms are not at good position to hire more workers when economy is in recession. So, at the time of economic recession, union's bargaining power decreases.
Example : In Rochester, New York, 300 workers are working at the Mott’s juice and apple sauce factory and they called a strike at this, the workers are protesting against the parent company which cut wages earlier in the same year.
Since, the company was able to hire non-unionized temporary workers at half the cost of the striking workers due to economic recession. Both sides recognize that the environment is not good for labor negotiations, as the millions of Americans who lost their jobs during the recession are anxious for any kind of work.
In such a situation, if workers are fully aware that company can hire workers at less wage then, existing workers didn't bargain for any increase in wages due to loss of job. This shows that economic recession decreases the bargaining power of union.
The labor relations process focuses on jointly negotiated and administered work rules that pertain to compensation and employees and employers rights and responsibilities. The labor relations process is flexible enough to permit negotiated work rules to vary, unique characteristics of a particular industry, job classification, geographic setting, or external environmental conditions. The labor relations process is dynamic, which enables bargaining relationships to adapt to changing competitive conditions
In the recession, nonunion domestic competition undercut union bargaining powers. In industries unions suffered the loss of many members. To stem the attrition of membership, the unions reluctantly granted wage and benefit concessions. In some cases those concessions seemed to stanch the loss of members, at least temporarily. But in others union concessions did not sufficiently counter the opposing forces of the marketplace, and union power and membership continued to erode in recession.
When recession affects the economy began the national unemployment rate will rise and unemployment rate will declined. Many workers who had given up searching for a job because they believed no jobs were available for them. While unemployment rates will affect economic recovery and reduce the bargaining power of the labor unions
Duty to Bargain in Good Faith During the bargaining process, the parties are not required by law to reach an agreement but they must bargain in good faith. While good faith is a subjective concept, it will look to the entire circumstances surrounding bargaining, including behavior away from the bargaining table such as pressure and threats. An absolute refusal to bargain constitutes bad faith.
Procedure in collective bargaining. The following procedures shall be observed in collective bargaining: When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a statement of its proposals. The other party shall make a reply thereto not later than ten calendar days from receipt of such notice.
An example: A company General Milling Corporation (GMC) employed 190 workers. They were all members of private respondent General Milling Corporation Independent Labor Union, a duly certified bargaining agent.
GMC fails to make a timely reply to the proposals presented by the union is indicative of its utter lack of interest in bargaining with the union. Its excuse that it felt the union no longer represented the workers, was baseless.
It is found that GMC’s refusal to make a counter-proposal to the union’s proposal for CBA negotiation is an indication of its bad faith. Where the employer did not bother to submit an answer to the bargaining proposals of the union, there is a clear evasion of the duty to bargain collectively. Failing to comply with the mandatory obligation to submit a reply to the union’s proposals, GMC violated its duty to bargain collectively, making it liable for unfair labor practice.