Management of the Enterprise
Chapter 13: Understanding Employee – Management Issues and Relations
The Need for Trade Unions
- A union an employee organization that has the main goal of representing members in
employee – management bargaining over job-related issues.
- Purpose is to protect themselves from intolerable work conditions and unfair treatment.
- Trade unions were largely responsible for establishment of minimum-wage laws, overtime rules,
workers’ compensation, severance pay, child-labour laws, job safety regulations, and more.
- Some labour analysts forecast that unions will regain strength as companies become more
involved in practices such as outsourcing, others insist that unions have seen their brightest
- The relationship between management (representing owners or stockholders) and employees
has never been very smooth.
- Management has the responsibility of producing a profit through maximum productivity.
- Labour (the collective term for non-management workers) is interested in fair and competent
management, human dignity, decent working conditions, a reasonable share in the wealth that
its work generates, and assurance that the conditions of the contract and government labour
laws will not be ignored.
- Employee-management issues must be worked out through open discussion, goodwill, and
- While coping with a changing economy, management has been laying off employees,
automating operations, and demanding more flexibility in how it uses its remaining workforce.
- As more traditional labour-intensive jobs are lost due to technology and competition from
lower-wage countries, the issue of job security and retraining for the new information-age jobs
have become key concerns for unions and the people they represent.
Trade Unions from different perspectives
- Historians generally agree that today’s unions are an outgrowth of the economic transition
caused by the industrial revolution of the nineteenth and early twentieth centuries.
- Over time, workers learned that strength through unity (unions) could lead to improved job
conditions, better wages, and job security. - Human nature being what it is, greed, incompetence, and self-serving interests of players from
one side or the other, or both, can supersede the common good thereby creating conflict and
negative perceptions about unions.
- Through the union structure and the collective bargaining process, employers can level off
labour costs across entire markets and create optimum standards in training and health and
safety practices can be properly enforced through their collective agreements.
The Early History of Organized Labour
- Dates back to the 1800s in Canada
- Craft Union an organization of skilled specialists in a particular craft or trade.
- Were formed to address fundamental work issues of pay, hours, conditions, and job security –
many of the same issues that dominate labour negotiations today.
- Many of the early labour organizations were local or regional in membership, and were
established to achieve some short-range goal and disbanded after attaining a specific objective.
- The nineteenth century witnessed the emergence of modern industrial capitalism.
- Enormous productivity increases were gained through mass production and job specialization.
- Workers were faced with the reality that production was vital, and work hour expansion.
- Minimum wage-laws and unemployment benefits were non-existent, which meant that periods
of unemployment were hard on families who earned subsistence wages.
- Before 1872 it was illegal to attempt to form a union in Canada.
- Industrial union consists of unskilled and semi-skilled workers in mass-production such as
automobile manufacturing and mining.
- Democratic rights for all was still a weak concept, and the idea of people getting together to
fight for their rights was not accepted as it is today.
- The union movement was greatly influenced by immigrants from Europe, who brought with
them the ideas and experiences of a more advanced and often more radical background.
The Structure and size of trade unions in Canada
- The most basic unit is the union local (also called a local or local union).
Represents one school, government office, or a specific factory or office of a
Can also cover several small companies or other work units.
Usually part of a larger structure, namely one that is, provincial or regional in
focus or national or international body.
- A national union that charters locals in only one country.
- Union Centrals main functions has been to coordinate the activities of member unions when
representing the interests of labour to local, provincial and federal governments as well as to
organized labour on the world scene. - Canadian Labour Congress (CLC) is the largest union central in Canada and it promotes itself as
“bringing together the majority of unions in Canada in a unified, national voice”.
Represents Canada’s national and international unions, the provincial and
territorial federations of labour and 130 district labour councils.
Promotes decent wages and working conditions and improved health and safety
- LIUNA is structured under a governing Constitution, which is reviewed and amended every 5
years at a constitutional convention, bringing together elected delegates from every local union
and district council in North America.
- The international union issues and holds the charters of all local unions and district councils that
operate under the rule of the LIUNA Constitution.
- District councils are composed of elected delegates from local unions within a state, states,
province, or provinces.
- District councils are responsible for collective bargaining and are the holders of “bargaining
rights” on behalf of LIUNA members.
Size of Trade Unions in Canada
- Union density a measure of the percentage of workers who belong to unions.
The Canadian Union of Public Employees (CUPE)
- Formed in 1963.
- Is Canada’s largest union, with approximately 590,000 members.
- Union represents workers in sectors that include health care, education, municipalities,
transportation, emergency services, and airlines.
- CUPE members are service providers, white-collar workers, technicians, labourers, skilled
tradespeople, and professionals.
The Canadian Auto Workers (CAW)
- Founded in 1985 after the Canadian members of the U.S. based United auto workers(UAW)
decided to form their own Canadian-controlled union.
- The largest private-sector union in Canada Labour Legislation
- The growth and influence of organized labour in Canada have depended primarily on two major
the public opinion.
- As with other movements for greater fairness and equity in our society – such as women’s right
to vote, equal rights for minorities and women, and protection for children – when support for
employees’ rights became widespread in Canada, laws were passed to enforce them.
- Companies that want to keep unions out often provide compensation, benefits, and working
conditions that match or exceed those found in union plants or offices.
- Federal legislation applies to unions and labour-management relations in these businesses as
well as to federal Crown corporations and federal civil servants.
- The major legislation that governs labour-management relations for these employees is the
Canada Labour Code, which is administered by Human Resources and Social Development
- One workplace law is the right to know about workplace hazards.
- By knowing about workplace hazards, workers can ensure that employers make work safer,
provide protection to workers, and given training so that workers can work with the smallest
possibility of injury or illness.
- Another example is the right to refuse unsafe work, which entitles workers to step away from
work that he or she believes is unsafe.
Labour Relations Boards
- A labour relations board (LRB) is a quasi-judicial body consisting of representatives from
government, labour, and business.
- The federal government has created the Canada Industrial Relations Board (CIRB).
o Its mandate is to contribute to and promote effective industrial relations in any work,
undertaking, or business that falls within the authority of the Parliament of Canada.
o Plays an active role in helping parties resolve their disputes through mediate and
alternative dispute resolution approaches.
o Undertakes a wide range of industrial relations activities:
Certifying trade unions
Investigating complaints of unfair labour practices
Issuing cease and desist orders in case of unlawful strikes and lockouts.
Rending decisions on jurisdictional issues. Objectives of Organized Labour
- The objectives of unions frequently change because of shifts in social and economic trends.
- Unions were a major opponent of NAFTA, passed by parliament in 1994. They feared that their
members would lose their jobs to low-wage workers in other countries.
- Unions have a dual responsibility – to ensure that their members are getting the best wage and
benefit packages and working conditions available in the marketplace, and equally as important,
to ensure that their contractual employers not only remain competitive, but have a labour
partner that can assist them in expanding their business and market sure.
- Through the union structure, and the collective bargaining process, employers can level off
labour costs across entire markets and create optimum standards in training and health and
safety practices that can be properly enforced through their collective agreements.
- Negotiated labour-management agreement (labour contract) agreement that clarifies the
terms and conditions and sets the tone under which management nad labour agree to function
over a period of time.
- Such a contract spells out the responsibilities and obligations of both parties, itemizes the
compensation package agreed to for services rendered or products purchased, and identifies a
mechanism to be employed to settle differences in the event either party violates the terms of
the mutually agreed to contract.
- Union security clause provisions in a negotiated labour-management agreement that
stipulates that employees who benefit from a union must either officially join or at least pay
dues to the union.
- Four basic types of clauses:
o A workplace in which all new hires must already be union
o A workplace in which the employer is free to hire anybody, but
the recruit must then join the union within a short period,
perhaps a month.
Agency Shop (Rand Formula)
o A workplace in which a new employee is not required to join the
union but must pay union dues.
o A workplace in