CBP is a negotiation process between the business, firm, or organization, and employee representatives, which is usually the trade union. The main aim of the CBP is to reach a contract agreement. The CBP is a means for resolving workplace conflict (Sokoh, 2018). It is also a means for the determination of terms and conditions of the workplace (Sokoh, 2018). During the CBP, two parties are involved – the trade union and the representatives of employers (University of Minnesota Libraries, N.d). In the U.S., CBP takes place between labor union and the leadership of the company or organization that has recruited the union workers.
The role of the representatives is to start the negotiation process by establishing the objectives for the negotiation as well as by reviewing the old contract. On the other hand, the employer or group of businesses who are represented by their management team prepare and anticipate union demands.
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Union representatives and representatives of employers jointly determine and regulate decisions on matters relating to employment relationships (Sokoh, 2018). The trade union representation acts as negotiators, and their role is to determine the bottom line of their opponents. More to this, the trade union representatives establish the aspirant level and comes up with a plan on how to begin the interaction and the bargaining process (University of Minnesota Libraries, N.d). On the other hand, the role of the management team, who act as bargainers, is to start the negotiation process. More specifically, the management team offers reasonable offers to the negotiators in order to ensure a win-win bargaining atmosphere is created.
The result of CBP is referred to as collecting bargaining agreement (CBA). CBA usually establishes rules of employment for a given period. Trade union representatives are usually paid by the employees in the form of union dues. If an agreement is not reach in CBP, antagonistic labor strikes or employee lockout may follow.
Management Rights Clause and Reserved Right Theory
When drafting a collective bargaining agreement (CBA), the management of companies of organizations usually insists on a management-right clause. These contractual clauses give employers the right to take unilateral action to manage their businesses or companies without the obligation of the union to interfere with their business operations (Urim, & David, 2018). The purpose of the management right clauses to help employers make informed decisions in the workplace environment without violating the CBA and state and federal laws.
From the employment perspective, reserved rights theory is a clause that lists management's rights or prerogatives (Dow, 2013). Generally, the theory contends that the management of any business, company, or organization ought to retain its rights unless it has expressly agreed to relinquish with the union. Under the reserved rights theory, a company or organization reviews agreements to determine which rights the management of the company or organization has conceded to labor (Dow, 2013). All remaining rights reside with management. Since the theory gives management the right as well as the ability to control their operations, I agree with it. The second reason why I agree with this theory theory is that the theory gives the management the right to make its own decisions in its business operations without the interference of the union.
Union Membership in America
In 2009, the overall number of employees in the U.S. declined very sharply. More to this is that there was a sharp decline in the number of union members. According to the U.S. Bureau of Labor Statistics (2016), the majority of the union workers were government workers. Statistically, in 2009, the number of the employees that worked in the government sector and private sector was 7.9M and 7.4M, respectively (U.S. Bureau of Labor Statistics, 2016). Arguably, this trend was a result of the 2008 "Great Depression." The 2008 Great Depression significantly affects the economy of the U.S. More specifically, the U.S. experienced substantial losses in the manufacturing and construction industry (Albers, & Uebele, 2015). In 2009, the number of female union membership also rose sharply (U.S. Bureau of Labor Statistics, 2016).
Indeed, the year 2009 is regarded as a significant year when it comes to the trends of union membership in America. This is because, in 2009, there was a significant increase in public sector union members combined with the sharp decline in private union membership. However, in my opinion, I do not expect this trend to reverse. This is because the manufacturing and construction industries in the United States are continuously being outsourced. This trend will also not reverse due to the opportunity for union membership growth in the service industry.
Impact of the Great Depression on the U.S. Labor Movement
During the Great Depression, the staged labor membership declined sharped (Vatter & Walker, 2015). This decline led to the enactment of several acts by the government. The aim of passing the acts is to secure the organized labor unions (Vatter & Walker, 2015). The following are some of the impacts of the Great Depression in the U.S. labor movement. First, the U.S. government passed the “Davis-Bacon” act immediately after the Great Depression (Vatter & Walker, 2015). The act was passed to set the minimum wage for employees working in the United States. According to the Davis-Bacon act, construction projects secured via the government ought to pay union workers the “prevailing wage rate” as the minimum wage (Baird, 2011).
Apart from the Davis-Bacon Act, the U.S. government also passed the Norris-La Guardia act in 1932 (Vatter & Walker, 2015). This act was passed in order to establish a legal framework to intercede union issues. More to this is that the act nullified the “Yellow Dog” contracts (Baird, 2011). At the time, this contract prevented works from forming or joining labor unions.
Perhaps, one of the most significant impacts is the passing of the National Labor Relation Act (Vatter & Walker, 2015). This act, also referred to as the "Wagner Act," enabled businesses to form labor unions (Baird, 2011). More specifically, the act gave unions control to negotiate with employers. It also gave the union control to strike.
Profit-Sharing Plans and COLAs
Companies sometimes offer variables pay plans or security benefits to their employees as retirement planning tools. Some of these tools are profit-sharing plans and cost-of-living adjustment (COLA). These plans usually give workers in a company a share of the company's profits. In this section, these plans will be discussed together with their advantages and disadvantages.
With regard to profit-sharing plans, these plans gives employees a share of the firm’s or businesses’’ profit or earnings. Usually, a company offering this plan designates a percentage of its earnings to share with employees (Fang, 2016). Typically, the money is divided using a formula of distribution. Profit may be ideal for some firms or businesses and ill-suited for others. Therefore, it is very important to work with professionals or experts when deciding if profit-sharing plans are right for you and your employees.
One of the advantages of these plans is that they help build the mentality of employees (Fang, 2016). With this plan, each employee in the company will have a positive interest in ensuring that the business succeeds. Thus, the employees are empowered to work towards achieving the organizational goals. On the other hand, using a profit-sharing plan as a performance motivator may start to lose its effect with time (Fang, 2016). With time, some employees may begin to see the bonuses as an entitlement. More to this is that the employees cannot differentiate how their individual work contributed to the success or performance of the company. Thus, a profit-sharing plan may sometimes provide little incentive for improved performance (Fang, 2016). The other disadvantage of this plan is that it requires significant administrative efforts.
COLA is a periodic increase in wages. In other words, it is a yearly adjustment made to security and supplemental security income (Zorn, Randal, & Newton, 2011). The purpose of COLA is to reimburse for loss in purchasing power of money because of inflation. In other words, it increases salary to match the rate of inflation. COLA mostly applies to union workers as they usually have COLA built into their contract. The government uses COLA due to the fact that it is not in a competitive environment. Its rate is usually pegged to a general index, such as consumer price index (CPI).
COLA has numerous advantages and disadvantages. One of the advantages of COLA is that it may be provided when judged affordable by government entities (Zorn, Randal, & Newton, 2011). Initial COLA tends to result in higher benefits. More to this, the longer retired, the higher the increase. COLA help retirees maintain their purchasing power. However, it worth to note that COLA can be costly (Zorn, Randal, & Newton, 2011). To add to this, they are hard to restart if they are turned off.
Seniority in Layoff and Recall Actions
Seniority, in the employment context, is a term used to measure relative job rights and employees' length of services in a given unit (McCully, 2019). Labour unions support the use of seniority for a number of reasons. One of the reasons is that employee experience, and skills are critical to a firm's or organization's productivity (McCully, 2019). Seniority was designed to protect employees, especially from unreasonable managers. More to this, seniority guarantees that important decisions are made rationally. In other words, through seniority favoritism and union bursting can be avoided (McCully, 2019). Experienced employees tend to be more productive, and rational employers tend to retain such employees.
Seniority is also used because employers usually want to encourage their workers to continue committing themselves towards achieving the organizational goals of the business of the company (McCully, 2019). Thus, laying off senior workers would result in worker distrust. Seniority-based rules also increase employee loyalty. More to this is that it limits management's actions. Encouraging longevity from workers benefits companies. This is because it cultivates the senior employees in the company or organization with company knowledge as well as with company experience. However, seniority ought not to be the only factor that is taken into account in employment decisions.
References
Albers, T., & Uebele, M. (2015). The global impact of the Great Depression. Economic History Working Papers, No: 218:2015. Houghton Street, London. The London School of Economics and Political Science.
Baird, C. (2011). Freeing labor markets by reforming union laws. Cato Institute. [Online]. Retrieved from: https://www.downsizinggovernment.org/labor/reforming-labor-union-laws . Accessed December 12, 2019.
Dow, C. (2013). What’s important now? Municipal Research and Services Center: Local Government Success. [Online]. Retrieved from: http://mrsc.org/Home/Stay-Informed/MRSC-Insight/September-2013/What-s-Important-Now.aspx . Accessed December 12, 2019.
Fang, T. (2016). Profit-sharing: Consequences for workers. IZA World of Labor, 225 : 1-10. DOI: 10.15185/izawol.225.
McCully, C. (2019). The continuing validity of seniority systems under Title VII: Sharing the burden of discrimination. Loyola University Chicago Law Journal, 8 (4): 881-912.
Sokoh, G. (2018). Collective bargaining and industrial harmony in the higher institution in Delta State: A study of OZORO Polytechnic, OZORO Delta State, Nigeria. IOSR Journal of Humanities and Social Science, 23 (5): 50-63.
The University of Minnesota Library. (N.d). Human resource management. [Online]. Retrieved from: https://open.lib.umn.edu/humanresourcemanagement/chapter/12-2-collective-bargaining/ . Accessed December 12, 2019.
Urim, U., & David, I. (2018). Management rights clause (prerogative) and collective bargaining. The need for workplace democracy. Social Management Science, 77-115.
U.S. Bureau of Labor Statistics. (2010). Union membership declines in 2009. [Online]. Retrieved from: https://www.bls.gov/opub/ted/2010/ted_20100201.htm?view_full . Accessed December 12, 2019.
Vatter, H., & Walker, J. (2015). The rise of big government. London and New York. Routledge, Taylor, and Francis Group.
Zorn, P., Mark, R., & Newton, J. (2011). Postemployment cost-of-living adjustments: concepts and recent trends. Gabriel Roeder Smith & Company.
