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Running head: JOB SECURITY
Job Security in the United States
Cynthia Estrada
Employee and Labor Relations
November 24, 2018
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Job Security in the United States
Job security is the assurance that an employee would remain in a reputable and
reasonable employment without fear or risk of unwarranted termination. Job security concerns
issues to do with employment terms, contracts as well as the collective bargaining agreements
and other policies restricting any illegal termination of employments. According to Equal
Employment Opportunities Commission, a significant population in the U.S survives on part
time jobs and contracts that do not guarantee renewal. Other people especially the Black
Americans and the immigrants are casuals in different companies and departmental stores that
expose the employees to poor working conditions in addition to poor pays. Oftentimes, these
employees have limited opportunities to engage in work and payment related negotiations at
least to have their conditions and status improved. Attempts to negotiate the conditions of work
and other grievances would lead to unclear dismissals or increased work and less pay. This paper
examines issues relating to job security in U.S.
Job security in United States
Most of the significant concerns relating to job security emerged during the industrial
revolution of the 19th century. Prior the revolution, many people engaged in farming in the south.
Following the industrial revolution, most of the farmers abandoned their farming practices as
their primary economic practice to join the promising manufacturing industry (Farber, 2016).
Because of the rampant conflicts between the laborers and those who owned the factors of
production including land and capital among other factors, the government of the United States
had to intervene to regulate the sector. The latter influenced continuous creation and changes in
the labor laws all through the 20th century. These changes in the labor laws improved the
working conditions for many laborers and employees. Some of the significant improvements
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included the protection of individuals from illegal job terminations or the job security,
discrimination at work places as well as the promotions of trade unions.
Impacts of employment policies on Job security
As earlier mentioned, different levels of government in the United States enacted laws
concerning the relationship between the employers and the employees. According Neumann
(2016), a greater proportion of the U.S workers work on what is called at will basis. Because of
this, either the employer or the employee may by use of legal procedures end their work relations
at any time. In fact, many employees just survive in their employments while enduring threats to
job terminations. Some of the most influential labor laws include the National Industrial
Recovery Act which was passed in 1933, the National Labor Relations Act, Equal Employments
Opportunities Act and the most recent policy relating to the minimum wages.
The National Industrial Recovery Act (NIRA)
Prior the passing of NIRA, most of the employers in the United States exposed
employees to unbearable work conditions while terminating the contracts with no much
consideration. For example, towards the end of 1920s especially following the great depression,
employers laid off most of their employees without hesitation of the consequences or notices
(Farber, 2016). As part of the government intervention, the congress passed NIRA in 1933
alongside with the new deal by the president of the United States. The new deal comprised of
various policies and government programs to create more work opportunities. The underpinning
aim of NIRA was to create labor unions while granting the rights to carry out negotiations with
the employers for employees. This regulation enhanced job security amongst most of the workers
at the time. However, antiunion job owners influenced the ruling by the Supreme Court to nullify
the law in 1935 thus exposing employees to poor work conditions.
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National Labor Relations Act
Besides the abolition of NIRA, the workers continued the push for good work conditions
and job security. Consequently, in the same year 1935, the congress passed the National Labors
Relation Act that improved the relations between the workers and their employers. The law
protected the employees’ rights as well as those of the employers through reasonable collective
bargaining. The regulation further ended illegal mistreatments by either the party. The law
favored the employees significantly since it provided a rigid framework concerning wages, work
conditions as well as work termination procedures and processes (National Labor Relations Act,
2018). In addition, the law protected the employees from different forms of discrimination
including gender and race among others.
The Equal Employment Opportunities Act
Despite the illegality of discrimination at work places, employers continued to
demonstrate discrimination amongst the employees. The constant calls by the U.S civil right
movements, through the mid 20th century, bore fruits by the creation of the Equal Employments
Opportunities Act in 1964. The government created the EEOC or Equal Employment
Opportunities Commission for the implementation of the law (Farber, 2016).
Different perceptions on job security
For many years, the employers argue that Labor Relation Act issues relating to job
security are against the employers while favoring the employees. In fact, most of the employers
assert that many employment laws aim at limiting the powers held by the employers. In addition,
the employers claim that the laws limit the profit margin by increasing cost of production
through the wages and other employee-oriented costs (Mishel, Bernstein & Schmitt, 2016). On
the other hand, the employees and unions perceive labor relations acts and job security as
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avenues for enhancing their rights, work conditions and respect. In addition, the laws restrict
discrimination. According to the Bureau of Labor Statistics (2018), the unions and workers
perceive the laws as legal channels to seek just and fair employee-employer relations. In the past
few decades, the U.S labor movement has become ineffective particularly due to political
interference and lack of good will by the employers.
Job security and minimum wage policy
Different people have varied opinions concerning the implementation of minimum wage
policy that was enacted by President Obama. The proponents of the policy argue that the
implementation of the minimum wage has minimal effects if any on the job security but
increases economic status among many Americans. In 2014, the Congressional Budget Office CBO reported that the rise in minimum wage influenced over 500,000 job losses (Mishel,
Bernstein & Schmitt, 2016). The report added that increasing minimum wage raises the
production costs triggering employers to lay off some of the workers to maintain their returns.
Conclusion
Among many employees in the United States, job security issue is a great and critical
concern. Poor work conditions, wages and salaries influence the employee to seek better
opportunities outside the company they work for. Apart from the increasing employment levels,
racism and other forms of discrimination continue to influence the debate on job security. It is
apparent that unemployment is an ingredient for a drop in the Gross Domestic Product of a
country. Also, lack of employment influences other socioeconomic concerns such as security and
drugs and substance abuse. To maintain a desirable society, the government of the United States
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should work all the means possible and fix the job security concerns. Fixing the concern would
influence nation’s growth as well as the growth of the Americans.
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Reference
Bureau of Labor Statistics (2018). The Employment Situation. Retrieved from:
https://www.bls.gov/news.release/pdf/empsit.pd
Farber, H. S. (2016). Job loss and the decline in job security in the United States. In Labor in the
new economy (pp. 223-262). University of Chicago Press.
Mishel, L., Bernstein, J., & Schmitt, J. (2016). The state of working America: 1996-97.
Routledge.
National Labor Relations Act | NLRB. (2018). Retrieved from
https://www.nlrb.gov/resources/national-labor-relations-act-nlra
Neumann Jr, R. K. (2016). Academic Freedom, Job Security, and Costs. J. Legal Educ., 66, 595.
Employment Security
Union members have the rules for determining their employment security spelled out in the
contract. Almost always, increasing competitive-status seniority is associated with greater rights
to continued employment in a present job or another job for which an employee is qualified.
Recently, these rights have been of lower value where employers have opted to close entire
facilities, but even there, entitlements to transfers and severance pay are often spelled out in
contracts and benefit levels increase with seniority.
Employees in nonunion companies have their employment rights determined by their employers.
Unless otherwise provided, it's legally assumed an employee is hired at the will of the employer
and can be terminated for a good reason, a bad reason, or no reason at all, as long as the
termination is not for a reason prohibited by employment law. However, courts have increasingly
narrowed employers' rights to terminate at will, particularly where employers are judged to have
acted in bad faith.25 Even where employers have contracts with employees, and where a
discharge could lead to a breach-of-contract suit, employers may be vulnerable to heavier tort
damages for bad-faith behavior associated with a discharge.26
In the reciprocal employment relationship, employees may come to feel that an implied contract
exists between them and their employer. When employees invest in developing skills for their
present employer and apply conscientious effort, they see themselves as producing benefits Page
207for the employer. In turn, employees may build expectations of long-term employment in
return for effort and loyalty.27
Nonunion employers use a variety of methods to enhance employment security for at least some
employees. Given the need for flexibility in the workforce, more employers are subcontracting or
allocating jobs that need relatively little training about the employer's specific mode of operation
to supplemental or complementary workforces of temporary employees. Frequently, these
employees are hired on a contract basis for a particular term—usually a year or less. These
employees are explicitly told they have no employment security guarantee beyond the period for
which they are hired. When faced with a need for major employment reductions, employers have
increasingly implemented expanded separation incentives, redeployment to other facilities with
or without retraining, training programs for new occupational assignments, expanded personal
leaves, and work-sharing programs that involve cuts in salary and hours to save jobs or to
provide incentives for those willing to terminate employment.28
Employee “Voice” Systems
Lower turnover in unionized situations (detailed in Chapter 10) might be related to the fact that
union employees have an opportunity to voice their needs for change through the grievance and
negotiation processes. Where these mechanisms are absent, employees who desire change may
be able to achieve it only by “voting with their feet.”29
In unionized organizations, employees are able to exercise their voice on immediate issues
through grievance procedures and on long-term issues through participation in negotiation
committees. Employees who have the greatest disagreements with an organization's operations
might be expected to be most involved in union activities at the employer level.
In nonunion employers, employees have no contractual entitlement to redress grievances or to
have a voice in how the organization should be run. Some nonunion organizations, particularly
those with philosophy-laden backgrounds, have constructed elaborate systems that enable
employees to voice complaints and get action on them.30
A model system enables an employee to communicate directly with his or her company's chief
executive officer, who has a department that directly investigates causes of complaints and
reports its findings. The employee's superiors may be the focus of the investigation, but the
employee is not identified, and no reprisals may be made against the person who filed the
complaint. Exhibit 7.1 is an example of how one of these systems works.
Page 208
Exhibit 7.1
HP'S OPEN DOOR PHILOSOPHY
HP is committed to creating the best work environment—a place where everyone's voice is
heard, where issues are promptly raised and resolved, and where communication flows across all
levels of the company. Openness is an essential to quickly resolve customer concerns, to
recognize business issues as they arise, and to address the changing needs of our diverse and
global workforce.
Commitment to open communication—Open Door Policy
The essence of HP's Open Door Policy is open communication in an environment of trust and
mutual respect that creates a solid foundation for collaboration, growth, high performance and
success across HP.
It provides for a work environment where
•
•
•
open, honest communication between managers and employees is a day-to-day business
practice.
employees may seek counsel, provide or solicit feedback, or raise concerns within the
company.
managers hold the responsibility for creating a work environment where employees' input
is welcome, advice is freely given, and issues are surfaced early and are candidly shared
without the fear of retaliation when this input is shared in good faith.
Grievance Policy
If you have a question or wish to discuss a possible violation, you should first discuss it with
those in your management chain. If you are not comfortable with that approach for any reason, or
if no action is taken, please contact the Ethics and Compliance office at:
corporate.compliance@hp.com.
Source: www.hp.com/hpinfo/abouthp/diversity/open-door.html.
These so-called open-door policies vary substantially in their real access to higher-level
managers—in terms of the types of complaints or questions that can be taken up and also the
degree to which employees must first contact lower-level supervisors and managers before
higher-level managers will review a complaint.31
Another innovative approach is creating an employee review board to act as an impartial group
to resolve outstanding grievances. Where this approach is used, a review board of randomly
chosen employees or persons at the same relative organizational level as the grievant hears the
evidence and renders a binding decision for the employer and the grievant.
(Fossum 206-208)
Fossum, John. Labor Relations, 12th Edition. McGraw-Hill Learning Solutions, 02/2014.
VitalBook file.
The citation provided is a guideline. Please check each citation for accuracy before use.
Contract Costing
The issue of contract costing is very important to labor and management. One mistake can have
a significant impact on the firm or the employee. Identifying, explaining, and costing the articles
of a collective bargaining agreement can be a very complicated process. It is important to
determine which articles in the contract have both direct and indirect costs.
While wages and health insurance have direct costs, other components of the total compensation
package may have indirect costs. Some indirect costs resulting from contract provisions that
address such topics as seniority, layoffs, grievances, and arbitration procedures are more difficult
to estimate. More subtle and complex areas to measure are found in the relationship that exists
between changes in labor costs and employee attitudes.
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Direct costs include:
o Hourly, daily, weekly, and monthly incentives
o Commissions
o Allowances
o Tools
o Clothing
o Differentials
o Profit sharing
o Premiums
Indirect costs include:
o Vacation
o Holidays
o Sick leave
o Funeral leave
o Health insurance
o Pensions
o Social Security
o Workers compensation
o Unemployment insurance
In negotiations, the union proposals and the company proposals will not be the same when it
comes to cost. In order to decide which items will be addressed at the bargaining table, labor and
management may utilize several options in narrowing the items down to be discussed.
The first order of business is to examine some of the factors in the cost and indirect costs.
Contract costing requires a method to estimate and compare the costs of union proposals and
company offers. The way to do this is by costing out the contract. Demographic data, financial
data, and accounting can all be used for costing a contract in the following ways:
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Demographic data supplies a breakdown and a statistical profile of the labor force in
terms of criteria such as age, sex, seniority, and marital status.
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Financial data provides information on the workforce regarding specifics such as direct
pay, overtime, vacation, and holiday pay.
Accounting provides figures on projected revenues, output, product mix, and non- labor
costs.
These three areas combined are significant in costing out a labor contract. The human resource
department, financial analysts, and accountants can all play a role in preparing and conducting
contract costing. It is important that management ensure that under the law, certain information
that is requested by the union should be prepared and presented to the union (Herman, 1998).
Generally, employee benefits can be categorized into two broad groups: time-not-worked
benefits, and security and health benefits.
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Time-not-worked benefits include:
o Vacation
o Holidays
o Sick and funeral leaves
o Jury duty
o Military service
o Reporting pay
o Call-in and call-back pay
o Wash-up
o Clothes changing time
o Time spent on union business
Security and health benefits include:
o Life insurance
o Medical insurance
o Accident insurance
o Workers compensation insurance
o Sick leave
o Pensions
o Social Security
o Unemployment insurance
o Guaranteed annual income
o Severance pay allowances
Today more than ever, health and pension benefits are the two largest items being discussed at
the bargaining table. In years past, people believed that the company pension plan was good
forever, and they had nothing to worry about after they retire. This is no longer the case with the
number of companies having pension plans that are not properly funded. Health benefits have
been on a steady rise, with no sign of relief in the near future. Labor and management are both
very concerned with the rising costs, and each has been exploring new ways to limit or reduce
the cost of health benefits (Herman, 1998).
As the negotiating stage comes to a close, labor and management must be allowed ample time to
ensure that the cost associated with the proposed contract is accurate and if each side can agree
on the conditions. It is recommended that all contract costs be rechecked to ensure that no
mistakes have been made, which might have a significant impact on labor or management. It is
very surprising how many companies will have the accounting office cost out the contract after it
has been signed.
References:
Herman, E. E. (1998). Collective bargaining and labor relations (4th ed.). Upper Saddle River, NJ:
Pearson.
Labor Costs
When management or labor is looking to negotiate benefits for the workers, it is critical to know
the true cost of such benefits before entering into negotiations. This way the team can determine
the bargaining range of the benefits. Labor and management will each have an established
bargaining range for the benefits. If the two bargaining ranges overlap, then it is likely that there
will be a mutual agreement. If the two bargaining ranges are very different, it is unlikely that the
two sides will reach an agreement.
Benefits
One way to determine the cost of benefits is to look at the benefits package as a percentage of
total payroll. The total annual cost of the benefits package being contracted is divided by the
annual payroll. It seems simple, but the problem lies in determining what
actually constitutes the "payroll" portion and what constitutes the "benefits" portion. While some
companies see bonuses as payroll, others see them as a benefit.
There is no universal standard on what is considered a benefit. In Topic 1, benefits are broken
down into two general categories: time-not-worked and security and health benefits. It is
important that policies be established so that consistency remains in the costing strategy for the
company. Even if the union understands how the company would categorize each piece, this
method is often used in comparing to other companies in an industry. This can be very hard
when all companies consider benefits differently. There is also no consistent method utilized
when discussing benefits.
In years past, the cost for employee benefits was paid by the employer. Benefits cost had very
little impact on the employee. Today, almost all employers share the cost of employee benefits
with the individual employee. This shift has resulted in unions taking a more active role in
negotiating employee benefits at the bargaining table.
Benefits costs discussed at the bargaining table may also impact non-union employees who may
receive the same benefit privileges as the union. This may include management and exempt
employees. Hence, the discussion may impact the union, but it is important to understand the
ripple effect the article increase may have on the entire organization.
Overtime
The benefit of overtime is one upon which many American workers thrive or, in some cases,
survive. On the labor side, it is important that employees are paid fairly for the time outside of
the 40 hours they spend at the company. This takes away from family and free time.
However, it is a necessary benefit for employees and employers to rely on workers who can
devote extra time. Labor may want to bargain a higher overtime rate—time-and-a-half to double
pay, or somewhere in between. This may have a significant impact on the annual cost of
employees per year. A further consideration involves when it is cost-effective to hire additional
personnel compared to paying overtime wages. This compares the previous rate to the new rate.
The anticipated rate may be based on what the employer can afford to bear, rather than just what
the union wants.
Funding Issues
When management is considering an economic increase in a contract pending at the bargaining
table, they must determine, from a business standpoint, the funding location for such an increase.
Can the increase be absorbed into the operating budget, or will the company need to pass along
the increase into the product cost? If the company can pass the cost increase onto the product,
this is called the elasticity demand. The elasticity
demand is defined as the measure of the sensitivity or responsiveness of quantity demanded to
change in price. Hence, management must take into consideration price changes on volume
produced and sold, product mix, and capital-to-labor costs (Herman, 1998).
The issue of public sector bargaining is not an issue of profit and loss. Any economic increase in
the collective bargaining agreement is passed onto the taxpayer. If taxpayers are unwilling to
increase funding by voting down a tax increase, the agency must make reductions in other areas
of the budget, such as goods and services. In the case that other cuts cannot take place, the
agency will be forced to reduce personnel costs within the budget. Hence, the union may seek
and receive a wage increase, but to fund the increase, the agency may be forced to reduce the
workforce if the money cannot be raised by a tax increase and/or other budget areas.
Computer Software
When discussing benefits costs and other contract cost items, labor and management should
focus on open communication involving methods and assumptions applied in the costing of a
new contract. Today, many organizations have the benefit of computer programming that can
provide current instant updates on contract costs. The software program can only formulate the
information entered and in what area the data is entered. It is important that a company-wide
policy be established to ensure all costs are entered the same way across all departments.
It is very common to see a bargaining table today with labor and management each having laptop
computers filled with data for bargaining. In the old days, it may have taken days or weeks to
research and calculate economic increases.
This module has provided an overview of the many items that must be considered in costing out
a labor contract. The labor contract contains direct and indirect cost items that will have a
significant impact on the bargaining process and the operation of the firm. Benefits packages still
remain one of the most significant issues at the bargaining table today. Labor contract costs may
also have an impact on other areas of the company that must be taken into consideration.
References:
Herman, E. E. (1998). Collective bargaining and labor relations (4th ed.). Upper Saddle River,
NJ: Pearson.
Shipman & Goodwin LLP
Public Employer Alert
February 2009
CONCESSIONS, CUTS AND PUBLIC SECTOR BARGAINING
COMMUNICATION
Most employees are already aware of the serious economic problems facing our nation and our state.
One cannot avoid the daily barrage of bad news in the media – foreclosures, layoffs, business closings,
stock market decline – and the concomitant loss of consumer confidence. But your employees may
not know how the larger economic crisis is likely to affect your city, town or school system. It is wise
to communicate early and often with union leaders and employees. Meet with union leaders, either
unit by unit or in a group. Provide them with the facts as you know them and keep them up to date.
While it may not be possible to predict the end-game, there will be markers and trends along the way
– are tax collections likely to decline due to high unemployment in the town or business closings, what
is happening at the State level with aid to schools and municipalities, how badly will the decline in
investment income hurt the general budget and/or pension funds?
It is also acceptable to communicate directly with employees. An employer may communicate in noncoercive terms with employees, even if negotiations are in progress. Such communications should be
factual and not in any way disparage unions. Moreover, if the employer is defending a position it wants
to take in concession or other negotiations, the proposal must be made first to the employees’ collective
bargaining representatives. Otherwise, the employer’s communication may be viewed as illegal direct
dealing.
Some government officials are using flyers and e-mails to keep employees informed. One town has set
up a place on its web site for employees and citizens to make suggestions on ways the town can deal
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February 2009
with its impending budget shortfall. Communication can be helpful not only in solving fiscal problems, but also
in maintaining employee morale. Straight talk, without hyperbole and with honesty about the uncertainties
ahead, is a critical component of successful communication with employees and their representatives.
CONCESSION BARGAINING
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Consider Asking Unions for Concessions
Depending on the circumstances facing the public entity, concessions may be justified. When
we speak of concessions here, we mean reductions in wages or benefits already negotiated and
fixed by contract. Remember that an employer cannot force a union with an existing contract to
reopen negotiations to change its terms. A union might worry about a breach of its duty of fair
representation if it agreed to just open up a contract that was previously ratified by the membership.
Both the employer and the union may be reluctant to have formal mid-term bargaining because of
the prospect of binding arbitration in the event of impasse. Therefore, most parties prefer to engage
in discussions with an assurance that neither will claim negotiations have occurred unless and until
there is an agreement.
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Be Realistic and Consider the Long Term
There is a limit to what an employer can expect from concession bargaining. It is difficult for a union
to agree to and obtain membership ratification for concessions unless certain conditions exist. This
may be a time when economic conditions convince unions and employees to sacrifice. Management
can make that easier by taking the lead and having non-union employees subject to the same types
of changes being requested of unions and their members. For example, if you ask unions to freeze
wages, be prepared to do so for all non-union employees.
As to what can be proposed in concession bargaining, there is no limit on the topics which can be
considered, especially if the parties are engaged in “discussion” rather than “negotiation.” It is
most helpful for the employer to have concrete goals, such as the dollar savings needed or benefit
modifications required to stave off future increases in the next couple of years. Remember that
savings also may be achieved by changes in work rules, such as those involving staffing, which
reduce overtime but not base wages. Be open-minded and do not be greedy. Your employees did
not cause the economic crisis and cannot alone solve it. And you do not want to lose your ability
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February 2009
to attract and retain highly qualified employees by having a compensation package that is not
competitive in your labor market. Other measures, such as program or service modifications, may be
essential to an overall solution to budget woes, particularly those expected to persist for a number of
years.
On the employer side, there are some proposals with short-term appeal but potential long-term
problems. For example, a union may want a “no layoff” provision in exchange for wage concessions.
Given the uncertainty all are facing over the next several years, a “no layoff” commitment, particularly
without an end date, may be difficult to manage. Similarly, simply deferring obligations to a future
date, in the hope that prosperity will return in the next two years, appears unwise at this juncture.
•
Follow the Applicable Statutory Process When the Time Is Right
All of Connecticut’s public sector labor laws contain provisions for mid-term bargaining – bargaining
over particular issues which takes place while a full contract is in effect. If a public employer
is fortunate enough to reach an agreement with a union on concessions, the required statutory
steps should be followed from that point forward. In State negotiations, that means sending the
agreement to the General Assembly; in municipal and non-certified employee negotiations, that
usually means submitting the agreement to the legislative body; and in local education agency
negotiations with teachers and administrators, that means filing the agreement with the town clerk.
Protection from a rejection by the legislative body which leads to binding interest arbitration may be
possible if the agreement is worded properly. There are also some who argue that an agreement
which requires no appropriation or, in the case of a municipal contract, does not conflict with
existing charter or ordinance provisions, need not be sent to the legislative body at all. We suggest
that there is no simple rule here, so that each situation should be reviewed by counsel to determine
the appropriate path to finalizing the agreement.
CUTS IN POSITIONS, PROGRAMS OR SALARIES
It may not be possible to obtain concessions, or to obtain sufficient concessions to avoid layoffs. Therefore,
it is best to be prepared, so that you will achieve needed results without risking contract or other claims that
could eviscerate any savings from layoffs. Here are a few suggestions for getting it right.
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February 2009
Know Your Contracts and Train Managers
Many employers have not had occasion to apply the seniority, layoff, bumping and reemployment
provisions of their collective bargaining agreements for years, if ever. It is critical that the personnel
or human resources department study existing agreements, be familiar with the language of
these contract provisions and work through some “real life” examples, particularly with respect
to bumping. This information needs to be conveyed to department heads and other managers
who may be involved in layoffs. In addition, it is important that seniority lists be up to date, and in
compliance with contractual definitions of seniority, including any “superseniority” provisions for
union stewards. If contract language is ambiguous on any of these issues, do not hesitate to discuss
it with union representatives in advance, preferably before cuts are announced, so the discussion is
not clouded by considerations as to the individual employees affected.
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Exercise Your Management Prerogatives Wisely
The decision to eliminate a position for legitimate economic or other business reasons does not
require collective bargaining, unless there is a “no layoff” clause or other promise to maintain
positions in the contract. Even if a position is listed in the wage schedule, it can be eliminated
for a proper reason. However, employers occasionally succumb to the temptation of using a
fiscal problem to try and get rid of poor performers or employees who are seen as troublemakers.
Arbitrators and juries are likely to see through any attempt to use layoffs for the wrong reason. In
the same vein, be wary of recommending elimination of positions which are funded by grants or are
revenue producing. When the State had fiscal problems in 2003, it laid off some workers whose
positions were funded by insurance taxes rather than the general fund. An arbitrator ruled that the
layoffs were not done for economic reasons and reinstated the employees with back pay.
•
Bargaining May Be Required
As discussed below, management generally has the right to eliminate positions. However, most
personnel cost cutting measures short of that require bargaining – if not over the decision, at least
over the impact. In addition to the “usual suspects” of wages and benefits, here are some examples
of the rules on mandatory bargaining, based on Connecticut labor relations statutes and decisions of
the State Board of Labor Relations:
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February 2009
Change in the Work Year. For teachers and other school employees, a change in the length
of their work year is a negotiable issue. Even if the legislature adopts a proposal to change
the number of school days required for students, negotiation over at least the impact of that
decision on compensation will be required.
Furloughs. In 1994, the Board ruled that a town could not furlough employees without
bargaining. In that case, the employer had a strong management rights clause which allowed
the employer to “relieve” employees from duty for legitimate reasons. The Board applied
its general rule requiring that a management rights clause contain a clear waiver of rights
on a specific topic in order to relieve the employer of its duty to bargain. It is unlikely that
Connecticut courts would give the power to furlough unilaterally to public employers the way
the courts in California did , due to differences in our laws and the fact that we do not face the
“emergency” faced by California with its deficit of $42 billion and the potential it will run out of
cash this month.
Reassignment of Work to Others. As most public employers know, the decision to contract
out work, or to transfer work from one bargaining unit to another, is a mandatory subject of
bargaining unless there is express contract language permitting it. This rule can even make it
difficult to shift duties from one position to another, if the positions are in different units or if one
is unionized and one is not. A union may also have a claim for impact bargaining over pay if, by
combining the functions of two positions into one, there is a substantial change in job duties or
workload.
Reduction in Work Hours. A reduction of hours which removes a position from the bargaining
unit is negotiable. So is any other reduction in hours which has a substantial impact on other
conditions of employment such as eligibility for health insurance or pension. In addition, of
course, reducing hours may be a breach of contract if the contract specifies weekly and/or daily
work hours for employees.
Reorganization. As a general rule, management has the right to organize its operations as it
sees fit. For example, a consolidation of departments or change in the lines of supervision may
be made with negotiations over the decision. Nevertheless, if reorganization significantly affects
working conditions, there may be a duty to bargain over the impact.
5
Shipman & Goodwin LLP
February 2009
In short, if an action by management will cause a change in working conditions, it is likely that bargaining
will be required, unless there is an explicit contract provision (e.g., a management rights clause that permits
subcontracting) giving management the authority to make the change. And there may be a duty to bargain
over impact or secondary effects even if there is no duty to bargain over the decision itself.
CONCLUSION
There is no “one size fits all” for employers dealing with financial exigencies. We offer the above as initial
guidance. Our labor and employment lawyers stand ready to assist you in applying these principles to your
unique circumstances.
questions or assistance?
This Alert was prepared by Saranne P. Murray. If you have any questions or concerns regarding this matter,
you may contact Saranne at (860) 251-5702. However, you should also feel free to contact the labor relations
attorney with whom you work on a regular basis.
This communication is being circulated to Shipman & Goodwin LLP clients and friends and does not constitute an attorney
client relationship. The contents are intended for informational purposes only and are not intended and should not be construed
as legal advice. This may be deemed advertising under certain state laws. © 2009 Shipman & Goodwin LLP.
SAVE THE DATE
Shipman & Goodwin will be hosting our annual Public Sector Update on April 3, 2009
at the Farmington Marriott in Farmington, Connecticut from 8:00 a.m. to 12:00 noon.
Concession bargaining will be a key topic and we will address the issue in greater
depth at that time. You will receive a formal invitation shortly, but we encourage you
to mark your calendars and save the date.
One Constitution Plaza
Hartford, CT 06103-1919
(860) 251-5000
300 Atlantic Street
Stamford, CT 06901-3522
(203) 324-8100
289 Greenwich Avenue
Greenwich, CT 06830-6595
(203) 869-5600
www.shipmangoodwin.com
12 Porter Street
Lakeville, CT 06039-1809
(860) 435-2539
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