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The Pivotal Role of Labor-Management Committees

Find out the key elements of a committee’s success, and get a checklist to use in creating a productive labor-management committee.

January 5, 2004
Related Topics: Labor Relations, HR & Business Administration

Collective bargaining is always characterized by competition between the parties for limited resources. Achieving productive public sector labor-management negotiations can be especially challenging when a troubled economy, such as the present one, limits those resources in an extraordinary way.

    However, it is possible for the bargaining parties to break the historic contentiousness and realize results--results where both sides think that their respective goals and objectives have been met and improved, given the constraints of bargaining--through the efforts of labor-management committees (LMC).

    Management generally seeks to reduce the growth in expenditures and the union tries to enhance the economic well being of its members--while citizens, who expect the same or an improved level of services, are frequently unwilling to support higher taxes.

    In difficult fiscal times, successful bargaining means both sides may need to look beyond typical "bread and butter" economic bargaining issues to non-economic issues that have resonance with a jurisdiction’s employees and other stakeholders. Similarly, this may be the time for labor and management to work in a more collaborative manner to tackle longstanding concerns that both sides acknowledge are problematic. An LMC can be a vehicle for bringing about some notable changes in the workplace.

What are labor-management committees?
    Labor-management committees are created during contract negotiations. LMCs are composed of an equal number of management and labor representatives. Although LMCs are the most common form of worker participation in the public sector, they are not yet widely used.

    LMCs often address subjects that are beyond the scope of traditional bargaining. They can deal with economic and non-economic issues, many of which are complex and require additional study or technical assistance.

New approaches to the traditional core bargaining issues
    In a typical bargaining setting, the collective bargaining process results in a series of tradeoffs. Labor and management exchange proposals that focus on economic issues, such as wages and benefits, and non-economic issues, such as workplace improvements. Not only is this back-and-forth process time-consuming, it tends to reinforce the perception that both parties’ interests are in opposition. Labor-management committees can play a role in new, less contentious approaches to bargaining.

    Given the difficult economic circumstances currently facing most public employers, it is possible to negotiate contract language that indicates to the union that management acknowledges the give and take of bargaining and allows for the possibility that the economy may improve in the future. One example is "if/come" language that ties all or part of a wage increase to an employer’s economic baselines, such as general fund revenues. The deferral of wages during New York City’s fiscal crisis in the mid-1970s was a high-profile example of the application of this principle.

    There is also contract language that can mitigate the negative ramifications of fiscal constraints on union members. Labor and management may choose to negotiate provisions that enable some employees to be retrained and transferred into revenue-generating positions (e.g., tax collection) to avoid layoffs.

Other benefits of collaboration
    Labor-management committees can also become an important mechanism for a jurisdiction and its unions to work collaboratively to bring about meaningful, long-term structural change and improvements. This collaborative approach to negotiations that LMCs use can be very effective in implementing productivity improvements or cost savings. Labor-management committees are often valuable in this regard because front-line workers are able to provide input about service problems.

    Gainsharing projects, accomplished as a collaborative effort, allow a group of employees to realize economic gain if they implement productivity or process improvements. Labor and management jointly set the targets. Gainsharing usually applies to a subset of the workforce, such as the employees of a particular department.

    "Contracting-in" is another example of an area in which a collaborative effort can be beneficial. The term "contracting in" refers to the process of bringing back in-house a particular service that has been contracted out (or outsourced). A jurisdiction can usually realize savings by contracting in services. Often, a jurisdiction implements productivity improvements (e.g., updating equipment or technology) to save the money that is the basis of contracting in. Both sides benefit: The jurisdiction reduces expenditures and/or improves services at the same time that the union gains more members and stable employment.

    LMCs can help labor and management confront longstanding mutual concerns. LMCs can be particularly useful when both parties acknowledge the need to modernize outdated systems or processes.

Key elements that contribute to success
    Certain elements increase the likelihood that an LMC will be successful. The most important LMC "success factors" are discussed in this section.

Model committee behavior
Both sides in an LMC must:

  • Acknowledge each other’s roles and responsibilities,

  • Be candid and share appropriate information with the other party,

  • Maintain the confidence of the other party so that representatives for each side can speak freely, and

  • Be aware that the parties may need to show more flexibility than in traditional bargaining.

The process of identifying and clarifying problems
    One of the keys to a successful labor-management committee is the identification and clarification of problems. Some problems may be obvious and longstanding (i.e., an outdated classification system, the union’s opposition to contracting out services, increasing health care costs). However, in some cases, it may be necessary to conduct a joint labor-management bargaining unit survey to identify employee opinions.

    One example is to survey the employees’ preferences regarding work and family issues. The advantages in this area are twofold. Though often considered a "non-economic issue," implementing alternative work schedules can provide more flexibility for the employee while lowering expenditures for the employer. Job-sharing is such an example. So is telecommuting. In the latter case, an employer may be able to save money by not renting or leasing office space if a significant number of employees work at home.

Reliance on outside expertise when needed
    Some issues, though obvious to both parties, may be complex and require technical assistance from experts. Health care utilization and cost containment are prime examples. A health care cost containment LMC could conduct a joint survey to uncover useful utilization issues.

    For example, are many employees eligible for coverage under their spouses’ health insurance? If so, it may be helpful to negotiate opt-out language in the next round of bargaining. Are employees aware of wellness issues, such as the dangers associated with smoking or being overweight or not receiving appropriate prenatal care? If not, it may be useful to implement a wellness program.

    However, for more complicated issues such as interviewing vendors or determining the cost of benefit design options, it may be necessary for the LMC to seek technical assistance and other expertise.

Communications with stakeholders
    Communication is a crucial contributor to the success of a labor-management committee. All stakeholders must be kept apprised of the process. This not only includes employees, but also mid-level managers who are often crucial to any change in processes, and the appropriate legislative authority that may have to fund or enact any new innovations.

Realistic expectations
    The mission of LMCs--solving longstanding or significant problems and introducing change--can be time-consuming. All participants, and their constituencies, should bear this in mind rather than always anticipating a swift resolution. Both sides must remain committed to the collaborative process. This is sometimes difficult when both sides are engaged in related negotiations. It is also difficult when the process of change is long term.

Awareness of cost considerations
    Last, in the course of implementing change, a jurisdiction may be pressured to fund "start-up costs," such as purchasing new equipment or software, providing training to employees (union and management) on new systems or even teaching LMC members how to function in a more collaborative environment. This is obviously difficult in times of fiscal duress. As a result, the LMC must consider all related costs when weighing alternatives.

    A jurisdiction can realize significant benefits from participating in a labor-management committee. By confronting significant issues directly, a jurisdiction can achieve cost savings, service improvements and/or increased employee morale. In the end, if management believes that they are providing high-quality public services to their citizens and if public employees feel that they are valued and part of the problem-solving process, then both sides will conclude that they have "won." It is only then that labor and management can achieve bargaining where each side is content.

Checklist for creating a productive labor-management committee  
Whether they participate in collective bargaining or undertake informal "meet and confer" discussions, negotiating parties that are interested in creating a labor-management committee (LMC) may want to consult the checklist below to help increase the likelihood that the LMC will be successful. Although not every LMC needs to formalize every one of these aspects of its structure and operations, this list provides a good framework for getting started.
Defining the Scope of the Labor-Management Committee
– Specify that membership will consist of an equal number of labor and management representatives.

– Define the committee’s chairmanship. Options include having two fixed co-chairs (one from labor and one from management) or having a different chair for each meeting (alternating between labor and management).

– Schedule meetings at regular intervals (e.g., the first and third Tuesday of every month). Because LMCs often address long-term problems and issues, having a regular meeting schedule increases the chance that participants will be able to attend regularly.

– Decide whether minutes will be recorded and distributed and, if so, what the mechanism will be.
Establishing the Ground Rules for the Labor-Management Committee's Proceedings
– Agree on decision-making mechanisms (e.g., by "majority rules" or consensus, where everyone must agree with solutions).

– Decide the level to which the provisions of collective bargaining agreement will guide decision-making.

– Establish ground rules, which may be more flexible and less formal than ground rules for regular negotiations, including an agreement that discussions will be kept confidential by all parties.

– Select technical consultants, if appropriate, with labor and management input.

– Create subcommittees for specific sub-issues (e.g., employee communications).

Reprinted with permission of The Segal Company. Copyright © 2003 by The Segal Group, Inc., the parent of The Segal Company.

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