By Dr. Gary L. Deel, Ph.D., J.D.
Faculty Director, School of Business, American Public University
(Note: This article contains content adapted from lesson material written for APUS classes.)
This is the sixth article in a 10-part series on the dynamics of union and employer relations in the United States.
In the previous part, we reviewed distributive and integrative negotiation tactics. Now we’ll look at the wage-and-benefit issue and ancillary issues that are commonly negotiated in union contracts.
Start a management degree at American Public University.
Although employers have several strategies to prevent unions from entering their workplace, these tactics sometimes fail despite best efforts. When that happens, employers are obligated to negotiate with unions for a collective bargaining agreement. In these agreements, there are numerous negotiating points that can neatly be categorized as wage-and-benefit matters and ancillary issues.
Wages, Benefits and Union Contracts
Wages typically involve pay rates for employees. But collective bargaining agreements also cover a variety of related points, including pay scales based on factors such as tenure and job performance.
Then there is the payment of value through benefits. They may include health, dental, and vision insurance; retirement programs; and other packages. On these matters, unions want to hold employers accountable to industry standards and to contracts negotiated with similar and often competing employers.
Generally speaking, unionization results in higher pay rates for employees and more productivity within the organization. But the increased costs for the higher pay rates also typically lead to reduced profitability and shareholder value.
Another wage-related matter that union agreements will attempt to address is incremental pay escalation based on rising costs of living. Inflation is an endlessly upward phenomenon. Year after year, the U.S. dollar is worth less and less in terms of paying for products and services necessary for families to maintain acceptable living standards. So unions will often advocate a fixed plan for wage increases — usually at an annual interval — to ensure that employees maintain their financial stability.
These types of incremental increase plans are often referred to as Cost of Living Adjustments (COLAs). Sometimes these stipulations will entail flat increases for all employees. Other times, increases will be based on factors such as performance evaluations and/or length of service. In any event, COLAs are an important aspect of wage issues addressed in collective bargaining agreements.
Ancillary Issues In Union Negotiation
There is a plethora of other issues that in some ways can be as important as the wage compensation packages offered to employees.
Many of the most important non-wage issues in union agreements concern work hours. These issues include mandatory work days and times, overtime, breaks, late policies and so forth. New and innovative work schedule strategies – including flex-time and the results-only work environment — are disrupting traditional standards for these negotiations. As a result, both unions and employers must adjust to the changes.
Another key ancillary issue in union contracts is management’s rights. These rights include protocols for decision making, disciplinary action, grievance policies, and other matters of relevance primarily to management.
Union security clauses are a third type of ancillary issue. These clauses generally address such matters as whether membership and paying dues will be mandatory for employees (i.e. “union shop” and “agency shop” situations, respectively). As discussed in a separate article, Right to Work laws complicate these negotiating points.
Finally, common matters of seniority are usually addressed in union agreements. They include not only wage and benefits entitlements, but also priority for job assignments, promotions, and other company opportunities. Generally, promotions and transfers occur more in unionized than in non-unionized environments, but they tend to benefit employees with more seniority.
In the next part of this series, we’ll explore workplace interventions that are disrupting the traditional union negotiating environment.
About the Author
Dr. Gary Deel is a Faculty Director with the School of Business at American Public University. He holds a J.D. in Law and a Ph.D. in Hospitality/Business Management. Gary teaches human resources and employment law classes for American Public University, the University of Central Florida, Colorado State University and others.