Renegotiating Union Contracts During COVID-19

During times of crisis or uncertainty, it is important that company management and union officials remain flexible and consider new workforce strategies and ways to improve labor relations in order to keep their business viable, for both shareholders and employees. This message has never been more pertinent as most every business must adapt in response to the challenges presented by the coronavirus.

The following outlines a few key steps, including union contract negotiation strategies, for companies to follow as they consider the need to renegotiate or amend their current union collective bargaining agreements.

Determine What Changes Are Needed

As a first step, we recommend that senior company leadership canvas their entire management team, especially first line supervisors, to identify any current union contract requirements or provisions that need to be removed or modified. For example, during the current Covid19 crisis, many companies have had to seek work rule changes for increased flexibility, new work schedules, furlough arrangements, and wage / benefit concessions. In regard to the latter, some companies have suspended scheduled wage increases, bonus payments and employer contributions to 401(k) and pension programs.

Meet with Union Leadership

Once the company has determined what actions need to be taken in order to remain competitive, management should meet with union leadership to share specific proposals and provide their supporting rationale for change. Like any union contract negotiation, it is important that management treat the union with respect and give their ideas and concerns serious consideration. Of course, union leaders will need to understand how the company’s proposals will benefit their membership, and the consequences of failing to take any revisionary actions during this critical union contract negotiation time. Again, it is best that proposed changes be very limited and specific in order to avoid the appearance that the company is attempting to renegotiate the entire union contract agreement.

Provide Rationale for Change

While the union typically resists making mid-contract changes, if the company can make an effective case as to why changes are needed, in most cases the union will engage in constructive conversations, union contract negotiations, and provide helpful suggestions. Remember, union leaders know their members and can be very helpful in anticipating employee concerns and how best to achieve company objectives. Again, to have any chance of modifying a current union contract the company must have a compelling rationale for change.

Employee Communications

After meeting with union officials and reaching a tentative agreement on proposed company changes, the union will need to obtain approval or ratification from the membership. We recommend that the company work closely with union leadership during these union contract negotiations to develop an effective communication plan, to help employees understand why changes are needed, and the consequences of failing to amend the current union contract. While this process appears to be rather simple, inadequate communications to employees is the number one reason that tentative union contract agreements fail to get ratified. Simply put, employees typically vote against things that they do not thoroughly understand.

Hutchison Group Can Help

For over 35 years, Hutchison Group has had the privilege of working with many of the world’s best companies, helping them to plan and negotiate exceptional collective bargaining agreements, often under challenging circumstances. Our labor union consultants wield a “win-win” approach that has proven effective in positioning both the company and its employees for future success. Equally important, our labor relations consultants work closely with management and union leaders to end union contract negotiations in a spirit of partnership and cooperation to the benefit of both. Contact our labor relations consulting firm today.

This article was written by Cameron J. Hutchison, president and founder of Hutchison Group. Working with management, employees, and union leaders, we help develop practical solutions to manage costs, improve productivity and promote teamwork. For more information please visit our web page at www.hutchgrp.com