In large organizations with both union and nonunion employees, the labor relations component is separate from human resources management. However, many seasoned human resources managers with expertise in both labor relations and employee relations often function in dual roles as experts in both areas — this is also common in small companies. HR managers who work for small businesses and experienced HR managers with knowledge of labor law and a firm grasp of labor-management issues have a significant role as management representatives in the collective bargaining process.
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A collective bargaining agreement, or CBA, is a contract between a labor union and the employer. The CBA sets out the terms and conditions of employment for a specified period, usually two to five years. HR managers participate in the negotiations to the extent possible based on their level of expertise and knowledge of labor law.
The management rights clause in a CBA contains relatively standard language that guarantees the company’s right to run its business operations the way it sees fit. An HR manager’s role in this section of a CBA is pretty small, because where management rights clauses are concerned a boilerplate clause is usually sufficient. Additionally, during contract negotiations to renew a CBA, the management rights clause from the previous agreement usually is acceptable to both parties.
Before the bargaining sessions commence, an HR manager confers with the company finance officer and compensation specialist on budgeted amounts for wages. They look at the company’s financial condition, previous wage rates and labor market trends. As long as the company maintains production levels and is in stable condition, there shouldn’t be any reason for the HR manager to prepare an argument for reducing wages or eliminating wage increases. The HR manager’s responsibility concerning wage negotiations typically consists of calculating labor costs based on several scenarios to present during bargaining sessions. For example, an HR manager might prepare wage proposals based on 50-cent increments starting from the current wage rate to nearly the maximum wage rate the employer can afford.
Wages and benefits generally are the most contested sections within a collective bargaining agreement. Therefore, the HR manager should arrive at each bargaining session armed with a wealth of information related to how wages and wage increases impact benefits. A substantial amount of time is devoted to negotiating benefits, and it’s not uncommon for labor unions and employers to reach impasse regarding employee benefits. For example, in 2011, after more than a four-month stall in contract negotiations, players in the National Football League agreed to concessions regarding revenue share and employee benefits to reach a collective bargaining agreement. An HR manager’s role in contract negotiations requires the ability to prepare employee benefits proposals, trade-offs and concessions that aid fruitful negotiations.
Most HR managers have a dual role: Protect the company’s interests and strengthen the employer-employee relationship. The role many HR managers assume during labor contract negotiations involves balancing duties that support that dual role. They are obligated to represent management while engaging in good faith bargaining with labor union representatives to reach the ultimate goal of a collective bargaining agreement that’s satisfactory to both management and labor.