Case Analysis: GMFC Impasse
Nowadays, workers have the right to create labor unions to demand better salaries and worker conditions. Simultaneously, managers of companies often refuse to satisfy the demands of labor unions. The current paper considers a case of an impasse in negotiations between a labor union and the management of GMFC (General Materials and Fabrication Corporation), which is described by Fossum (2012, p. 434). Several methods to resolve the conflict from the position of an industrial relations director are proposed.
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When considering the actions that could be taken to resolve the conflict with the labor union, it should be noted that the previous contract expired a week ago (Fossum, 2012, p. 434), which means that the company gains a certain advantage because it is not legally obliged to comply with the terms of any currently existing contract, and can take a greater variety of actions towards its employees.
On the whole, it may be recommended to create a proposal of contract based on the maximum terms to which the management of the company agrees (a pay rise of 5 cents per hour, with some partial health care co-payment, but also with some possible additional benefits, such as a bonus to workers who do overtime, if the management agrees) and stress that all the other factories in the area propose considerably lower wages than those which exist in GMFC already (Fossum, 2012, pp. 193-194).
Although these benefits are lesser than what the union demands, they are still a concession to the union, which probably does not wish to act radically if they have not organized a strike yet. The arguments should be delivered to the whole collection of the workers, not only to the union leaders who negotiate with the management, to influence the opinion of the whole union.
If the union does not agree to these terms, it is possible to offer to sign a contract on the same terms, but for a shorter period, which would allow the company to gain a contract on acceptable conditions, whereas the workers would get an improvement of their current situation, and the possibility to negotiate further benefits sooner in the future. Although there is a chance that this will only postpone the conflict, there is a possibility that the union or the factory’s management will not be as persistent during the future negotiations, and/or that the company will be able to afford a better increase of the workers’ wages. Also, the company could take steps to improve the general way in which the workers are treated, so that they would feel more loyal to the firm.
As for the timetable of these actions, it will be needed to first propose the contract on the best conditions for workers to which the management agrees, and to deliver the information to all the employees. It will be required to give the workers and the union several days to decide this, after which a meeting with the union leaders should take place.
If at the meeting, the union leaders do not agree to sign the contract, and will also refuse to accept the contract for a shorter term, and all diplomatic efforts fail, it is possible to threaten them with a lockout (Luce, Luff, McCartin, & Milkman, 2013). The union probably does not want it, judging from the fact that they have not initiated a strike, even though they have been able to do so for over a month; besides, they are not protected by the previous contract. On the other hand, the management of the firm has been lobbying for a lockout, which means that such a measure is acceptable to them.
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Because the management of the company is in favor of the lockout, the union’s threats to initiate a strike should not be considered dangerous. It is possible to initiate the lockout before the union has the chance to start a strike (Luce et al., 2013). Also, because the previous contract has expired, the factory may propose the workers to return to their workplaces, and also make attempts to hire some new workers on the previously existing conditions (without the pay rise), for these conditions are already better than those in the other factories in the area; and simultaneously to propose the old workers to return to their duties to preserve their jobs. However, such measures should be considered the very last resort, if any other methods and negotiations fail.
Also, if hiring other workers is not an option for the company, it is possible to initiate a lockout (or accept that the strike has been initiated), and negotiate further in these conditions – sooner or later, either the management or the labor union will make concessions.
On the whole, it should be stressed that attempts ought to be made to resolve the current situation “peacefully,” without strikes or lockdowns. It is possible to offer the maximum concessions that the management agrees to and to propose to shorten the term of the contract so that it could be re-negotiated sooner. If the union disagrees, it a lockout can be initiated, because the union does not wish the production process to stop.
Fossum, J.A. (2012). Labor relations: Development, structure, process (11th ed.). New York, NY: McGraw-Hill.
Luce, S., Luff, J., McCartin, J., & Milkman, R. (Eds.). (2013). What works for workers? Public policies and innovative strategies for low-wage workers. New York, NY: Russell Sage Foundation.