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Company Union
A company union, business union or, pejoratively, a yellow union is a union which is located within and run by a company, and is not affiliated with an independent trade union. Company unions were outlawed in the United States by the 1935 National Labor Relations Act, due to their use as agents for interference with independent unions, but company unions were and are common in many other countries. Some labor organizations are accused by rival unions of behaving like "company unions" if they are seen as to have too close and cordial a relationship with the employer, even though they may be recognized in their respective jurisdictions as bona fide trade unions[1]. Some business theorists suggest that a legitimate place exists for company unions in the modern world.
Contents 1 Definition and theory 2 United States 2.1 Ludlow massacre and Rockefeller Plan 2.2 Labor Relations Act and aftermath 3 Communist and former Communist nations 4 Japan 5 Mexico 6 Guatemala
Definition and theory As with labor concepts like the works council, the definition of a company union is not ironclad. Economist Leo Wolman wrote in 1924: "[T]he distinction … between trade unions and other workmen's associations is frequently a vague and changing one. What is today a company union may tomorrow have all of the characteristics of a trade union."[2] The International Labor Organization defines a company union as "A union limited to a single company which dominates or strongly influences it, thereby limiting its influence."[3]
Supporters of company unions claim they are more efficient in responding to worker grievances than independent trade unions. Proponents also note that trade unions do not necessarily have the company's best interests at heart; company unions are designed to resolve disputes within the framework of maximum organizational profitability.[4]
Opponents use this same logic to argue against company unions. The independent nature of trade unions, they argue, provides them with an outsider's perspective necessary for just resolution of conflict. Furthermore, independent unions are able to propose large-scale changes to work agreements – such as overtime rules and salary schedules – whereas company unions usually address concerns on a smaller scale.[5]
Some opponents also claim that company unions are used as fraudulent institutions, purporting to represent workers while actually ignoring (or working against) the best interests of employees. However, at least one economist advances the idea that in the first part of the 20th century, many companies were hesitant to adopt the company union model, for fear that it might lead to support for an independent trade union.[6]
A 2002 World Bank publication cites research from Malaysia and India which produced conflicting results as to the wage differential provided by trade unions compared to company unions. (Malaysia saw improved wages through independent unions, India did not.) The authors indicate the latter "may reflect the specific circumstances that prevailed in Bombay at the time of the study.")[7]
Labor Union in United States Company unions were popular in the United States during the early 20th century, but were outlawed under the 1935 National Labor Relations Act. Recently, some politicians, economists, and management theorists have advocated for a reversal of this policy.
Ludlow massacre and Rockefeller Plan In 1914, 16 miners and family members (and one national guardsman) were killed when the Colorado National Guard attacked a tent colony of striking coal miners in Ludlow, Colorado. This event, known as the Ludlow massacre, was a major public relations debacle for mine owners, and one of them—John D. Rockefeller, Jr.—hired labor-relations expert William Lyon Mackenzie King to suggest ways to improve the tarnished image of his company, Colorado Fuel and Iron. One of the elements of the Rockefeller Plan was to form a union, known as the Employee Representation Plan (ERP), based inside the company itself. The ERP allowed workers to elect representatives, who would then meet with company officials to discuss grievances.[8]
The ERP was accepted by the miners, and its success in providing an alternative to negotiations with the United Mine Workers led other business owners around the country (and even overseas) to consider replicating it.[9] In 1933 the miners voted to be represented by the UMW, ending the ERP at Colorado Fuel and Iron. Company unions, however, continued to operate at other mines in Pueblo, Colorado and Wyoming,[10] and the ERP model was being used by numerous other companies.[11] (The Brotherhood of Sleeping Car Porters was organized in part to combat the company union at the Pullman Company.)[12]
Labor Relations Act and aftermath - National Labor Relations Act
In 1935, the National Labor Relations Act (also known as the Wagner Act) was passed, dramatically changing labor law in the United States. Section 8(a)(2) of the NLRA makes it illegal for an employer "to dominate or interfere with the formation or administration of any labor organization or contribute financial or other support to it."[13] Company unions were considered illegal under this code, despite the efforts of some businesses to carry on under the guise of an "Employee Representation Organization" (ERO).[14]
In the mid-20th century, managers of high-tech industry like Robert Noyce (who co-founded Fairchild Semiconductor in 1957 and Intel in 1968) worked to their organizations of union interference. "Remaining non-union is an essential for survival for most of our companies," Noyce once said. "If we had the work rules that unionized companies have, we'd all go out of business."[15]
One way of forestalling unions while obeying the Wagner Act was the introduction of "employee involvement (EI) programs" and other in-house job-cooperation groups. One company included them in their "Intel values," cited by employees as reasons why they didn't need a union. With workers integrated (at least on a project level) into the decision-making structure, the independent union is seen by some as an anachronism. Pat Hill-Hubbard, senior vice-president of the American Electronics Association, said in 1994: "Unions as they have existed in the past are no longer relevant. Labor law of 40 years ago is not appropriate to 20th century economics." Author David Bacon calls EI programs "the modern company union."[16]
In 1997, pursuant to a report from the Commission on the Future of Worker-Management Relations, Republicans in the U.S. Congress passed the "Teamwork for Employees and Managers" (TEAM) Act. The bill would have weakened federal regulations against employer establishment and control of employee involvement programs.[17] Although the bill indicated that EI plans should not be used specifically to discredit or prevent union organization, trade unions in the United States vehemently opposed the bill. Jim Wood, an AFL-CIO leader in Los Angeles, said the "Team Act actually would take us backward to the days of company unions."[18] President Bill Clinton vetoed the bill.
Communist and former Communist nations Trade unions in the People's Republic of China are often identified as government unions, by virtue of their frequent close relationship with national planning bodies. Although market reforms are changing the relationship between workers and the All-China Federation of Trade Unions (China's sole national trade federation), such as U.S. social critic Ralph Nader still say they are "government-controlled with the Chinese communist party turning them into what would be called 'company unions' in the U.S."[19]
In many Post-Soviet states, including the Russian Federation, the economic collapse of the early 1990s brought a sharp decline in labor activity. As a result, official union structures often function as de facto company unions.[20]
Labor unions in Japan Company unions are a mainstay of labor organization in Japan, viewed with much less animosity than in Europe or the United States. Unaffiliated with RENGO (the largest Japanese trade union federation), company unions appeal to both the lack of class consciousness in Japanese society and the drive for social status, which is often characterized by loyalty to one's employer.[21]
Labor unions in Mexico In the 1930s, unions in Mexico organized the Confederation of Mexican Workers (Confederación de Trabajadores de México, CTM). The state of Nuevo Leon, however, coordinated its workers into sindicatos blancos ("white unions"), company unions controlled by corporations in the industrialized region.[22]
Labor unions in Guatemala In 1997, the government of Guatemala received a loan for 13 million USD loan from the World Bank to privatize its seaport, electrical grid, and telephone and postal services. Canada Post International Limited (CPIL), a subsidiary of Canada Post, and its partner International Postal Services (IPS), was contracted to manage the privatization process. In anticipation of union resistance, CPIL-IPS agents reportedly used company unions, along with bribery and death threats, to ensure a smooth transition.[23]
Company unions are also prevalent among the maquiladoras in Guatemala.[24]
New Unionism , is a term which has been used twice in the history of the labour movement, both times involving moves to broaden the union agenda.
First was the development within the British trade union movement in the late 1880s. The New Unions differed from the older craft unions in several respects.
They were generally less exclusive than craft unions and attempted to recruit a wide range of workers. To encourage more workers to join, the New Unions kept their entrance fees and contributions at a relatively low level. Some new unions, such as the Dockers' Union and the Gasworkers developed in the direction of general unionism.
They recruited unskilled and semi-skilled workers, such as dockers, seamen, gasworkers and general labourers.
At the outset, the New Unions were associated with militancy and willingness to take industrial action, unlike the more conciliatory craft unions. A notable strike associated with the New Unions was the London Dock Strike of 1889. Many of the New Unions had leaders who espoused socialist ideas. Such leaders included Tom Mann, Ben Tillett, Will Thorne and John Burns. In recent decades the traditional view of the New Unions as militant, fighting unions informed by a socialist politics has been modified. Although the New Unions sponsored many large strikes in their early years, most in fact favoured conciliation and accommodation with the employers. Similarly, although New Union leaders espoused socialism it was often of a moderate kind.
The most prominent New Unions were: Dockers' Union National Union of Dock Labourers Gasworkers Union National Sailors' and Firemen's Union
The second time the term New Unionism was used covers a period from the late 1980s until the present day. In 1989 US labour relations academic Charles Heckscher published "The New Unionism: Employee Involvement in the Changing Corporation" (Industrial and Labor Relations Review, Vol. 42, No. 3 Apr., 1989, pp. 463-465), and this became one of a series of influential papers which encouraged the union movement to reconsider questions of industrial democracy. The UK Trades Union Congress ran an ambitious New Unionism project from 1997 to 2003, seeking to apply a dual strategy of organizing and partnership in an attempt to reinvigorate the union movement. This period saw an end to the decline in union membership, but the net effect is still subject to debate within the movement. See http://www.tuc.org.uk/newunionism/
More recently unions such as the Service Employees International Union (SEIU) in North America and the Public Services Association (PSA) in New Zealand have combined innovative organizing and partnership combinations with notable success, leading to large and sustained membership gains (about 50% in each case) and increased influence and activism at workplace level.
An international New Unionism network was launched in 2007 to bring unionists and labour supporters together around developing and applying these principles. The network provides fora and other resources for those interested in implementing the agenda.
Social Movement Unionism is a trend of theory and practice in contemporary trade unionism. Strongly associated with the organising model of trade unionism, it also overlaps with Community Unionism. Social Movement Unionism attempts to integrate workers, trade unions and the labour movement into broader coalitions for social and economic justice. Thus, in principle, unions and other organisations support each other in what are seen as mutually beneficial goals.
The campus living wage work of unions, which have frequently worked with chapters of United Students Against Sweatshops, are an example of the principle in practice. Similarly, the 'Teamsters for Turtles' (as their t-shirts had it) at Seattle signalled a willingness of sections of the labour movement to engage with environmental concerns. Other prominent examples include the relationship between Reclaim the Streets and the Liverpool Dockers (UK) during their strike in the late '90s; and the relationship between the Coalition of Immokalee Workers and progressive US students during the Boot the Bell campaign.
Union initiatives Union support for social justice causes can come from within the scope of their respective collective agreements. Unions are increasingly demanding that new collective agreements contain clauses that are intended to further social justice. The inclusion of social justice support in a negotiated contract, compels all parties to support these causes in a legally binding way. This may extend to funding the education of rank and file union members in various social justice issues (ie. fair trade policies, anti-poverty initiatives, anti-globalization campaigns and race, gender and human rights issues, etc.) and/or financial or technical support for non-union causes. Generally speaking, social movement unionism advocates greater levels of democracy and equality for all people, regardless of union membership.
Collective bargaining During contract negotiations or collective bargaining, some unions are pushing for the inclusion of various social justice clauses to be added to the collective agreement. One example of this may be a demand that a percentage of future wages be transferred to a fund to be used to effect social justice issues nationally or internationally on behalf of the union membership. Another example is a recent trend of demanding a portion of hourly wages to be deferred to a P.E.L. (paid education leave) fund, to allow union members to leave the work place for a period of time, at no loss of pay, so they can attend social justice seminars and educational programs. These demands are forwarded as proposals to the employer during collective bargaining negotiations.
Collective bargaining is the process whereby workers organize collectively and bargain with employers regarding the workplace. In various national labor and employment law contexts collective bargaining takes on a more specific legal meaning. In a broad sense, however, it is the coming together of workers to negotiate their employment.
A Collective agreement is a labor contract between an employer and one or more unions. Collective bargaining consists of the process of negotiation between representatives of a union and employers (represented by management, in some countries by employers' organization) in respect of the terms and conditions of employment of employees, such as wages, hours of work, working conditions and grievance-procedures, and about the rights and responsibilities of trade unions. The parties often refer to the result of the negotiation as a Collective Bargaining Agreement (CBA) or as a Collective Employment Agreement (CEA).
Contents 1 Theories 2 United Kingdom 3 United States 4 Europe
Theories A number of theories – from the fields of industrial relations, economics, political science, history and sociology (as well as the writings of activists, workers and labor organizations) – have attempted to define and explain collective bargaining.
One theory suggests that collective bargaining is a human right and thus deserving of legal protection. Article 23 of the Universal Declaration of Human Rights identifies the ability to organise trade unions as a fundamental human right.[1] Item 2(a) of the International Labor Organization's Declaration on Fundamental Principles and Rights at Work defines the "freedom of association and the effective recognition of the right to collective bargaining" as an essential right of workers.[2]
In June 2007 the Supreme Court of Canada extensively reviewed the rationale for considering collective bargaining to be a human right. In the case of Facilities Subsector Bargaining Assn. v. British Columbia, the Court made the following observations:
The right to bargain collectively with an employer enhances the human dignity, liberty and autonomy of workers by giving them the opportunity to influence the establishment of workplace rules and thereby gain some control over a major aspect of their lives, namely their work. Collective bargaining is not simply an instrument for pursuing external ends…rather [it] is intrinsically valuable as an experience in self-government. Collective bargaining permits workers to achieve a form of workplace democracy and to ensure the rule of law in the workplace. Workers gain a voice to influence the establishment of rules that control a major aspect of their lives.[3]
Economic theories also provide a number of models intended to explain some aspects of collective bargaining. The first is the so-called Monopoly Union Model (Dunlop, 1944), according to which the monopoly union has the power to maximise the wage rate; the firm then chooses the level of employment. This model is being abandoned by the recent literature.[citation needed] The second is the Right-to-Manage model, developed by the British school during the 1980s (Nickell). In this model, the labour union and the firm bargain over the wage rate according to a typical Nash Bargaining Maximin (written as Ώ = UβΠ1-β, where U is the utility function of the labour union, Π the profit of the firm and β represents the bargaining power of the labour unions). The third model is called efficient bargaining (McDonald and Solow, 1981), where the union and the firm bargain over both wages and employment (or, more realistically, hours of work).[citation needed]
United Kingdom The British academic Beatrice Webb reputedly coined the term "collective bargaining" in the late 19th century: the OED quotes her use of it in 1891 in Cooperative Movement. Webb aimed to characterise a process alternative to that of individual bargaining between an employer and individual employees. Other writers have emphasised the conflict-resolution aspects of collective bargaining, but in Britain the most important refinement in usage came from Allan Flanders, who defined collective bargaining as a process of rule-making leading to joint regulation in industry. Most commentators see the process of collective bargaining as necessarily containing an element of negotiation and hence as distinct from processes of consultation, which lack the element of negotiation and where employers determine outcomes unilaterally.
In the United Kingdom collective bargaining has become, and has received endorsement for many years as, the dominant and most appropriate means of regulating workers' terms and conditions of employment, in line with ILO Convention No. 84. However, the importance of collective bargaining in the United Kingdom and elsewhere in the industrialised world has declined considerably since the early 1980s. Its decline in the public sector stems in part from the growth of Review-Body arrangements provided through the Office of Manpower Economics for groups of workers, including for the majority of National Health Service staff.
Despite its significance, in the United Kingdom there remains no statutory basis for collective bargaining in the fields of learning and training, a situation that has attracted the attention of both the Trades Union Congress and members of the Royal College of Nursing. A coalition has formed which actively seeks to remedy this situation by expanding the scope of collective bargaining to encompass learning and training.
United States In the United States, the National Labor Relations Act (1935) covers most collective agreements in the private sector. This act makes it illegal for employers to discriminate against workers because of their union membership or retaliate against them for engaging in organizing campaigns or other "concerted activities" to form "company unions", or to refuse to engage in collective bargaining with the union that represents their employees.
The industrial revolution brought a swell of labor organizing in the US. The American Federation of Labor was formed in 1886, providing unprecedented bargaining powers for a variety of workers.[4] The Railway Labor Act (1926)required employers to bargain collectively with unions.
In 1930, the Supreme Court, in the case of Texas & N.O.R. Co. v. Brotherhood of Railway Clerks, upheld the act's prohibition of employer interference in the selection of bargaining representatives.[4] In 1962, President Kennedy signed an executive order giving public employee unions the right to collectively bargain with government agencies.[4]
Several notable collective bargaining agreements (CBAs) in the United States have involved major professional sports leagues, due in part to a history of poor relations and the vast sums of money involved. One half of the 1998-99 NBA season was canceled due to a lockout, as was half of the 1994-95 NHL season. A breakdown in talks caused a cancellation of the entire 2004-05 NHL season, making it the first major North American sports league to lose an entire season to labor issues. Major League Baseball experienced player strikes in 1972, 1981, and 1994. In 2006 the National Football League (NFL) faced the prospect of an eventual strike, but an agreement was reached in March. The NFL did experience season-shortening strikes in 1982 and 1987, the latter of which involved the inclusion of replacement players for three games.
Europe Many contintental European countries, like Austria, the Netherlands and Sweden, have a social market economy where collective bargaining over wages, is done on the national level between national federations of labor unions and employers' organizations. In Finland, a Comprehensive Income Policy Agreement can be reached in some years. It is collective bargaining taken to its logical maximum, setting a single percentage raise for virtually all wage-earners.
For the trade unions, several sectoral federations are in charge of the collective bargaining for their affiliates.
In some countries, such as Finland, collective agreements with enough support are universally applicable, in a particular field, regardless of union membership. Effectively, the universal collective agreement sets the minimum wages and other benefits, under which no employer may go with any employee, union member or not. Personal benefits can be given regardless. Contrast this with the U.S. practise where in non right-to-work states all employees are required to join the union and then cannot earn anything but the negotiated union wage.
In France, collective bargaing became legal with the Matignon agreements passed in 1936 by the Popular Front government.
A bargaining unit in labor relations is a group of employees with a clear and identifiable community of interests who are (under U.S. law) represented by a single labor union in collective bargaining and other dealings with management. Examples would be "non-management professors"; "law enforcement professionals"; "blue-collar workers"; "clerical and administrative employees"; etc.
Mutual Gains Approach (MGA) is an approach to collective bargaining intended to reach win-win outcomes for the negotiating parties.
Instead of the traditional adversarial (win-lose) approach (aka positional bargaining), the mutual gains approach is quite similar to Principled Negotiation (first described by Roger Fisher in his book Getting to YES), where the goal is to reach a sustainable (i.e., lasting) agreement that both parties (or all parties in a multi-party negotiation) can live with and support.
Mutual gains bargaining has been used successfully in such areas as labor-management relations and environmental negotiations.
Some principles of MGB 1. Both sides have legitimate interests to be recognized and advanced 2. Approach the issues as problems to be solved 3. Listening builds trust 4. Enlarge the pie 5. Seek sustainable alternatives
