William Ellison Chalmers.

The conciliation process (Volume BEBR Faculty Working Paper v.2 no.2) online

. (page 1 of 2)
Online LibraryWilliam Ellison ChalmersThe conciliation process (Volume BEBR Faculty Working Paper v.2 no.2) → online text (page 1 of 2)
Font size
QR-code for this ebook


XI B RARY

OF THE

U N IVLRSITY

Of ILLINOIS

331.1
v»o. \-2,5



INSTITUTE OF LABOR AND
INDUSTRIAL RELATIONS




BULLETIN



The
Conciliation



rocess



UNIVERSITY OF ILLINOIS BULLETIN



I.L.I.R. PUBLICATIONS SERIES A, VOL. 2, NO. 2, APRIL 1948



EDITORIAL NOTE

In accord with the purposes of the University as a State-supported
educational institution, the Institute of Labor and Industrial Relations
aims at general education as well as at the special training indicated in
its title. It seeks to serve all the people of the State by promoting gen-
eral understanding of our social and economic problems, as well as by
providing specific services to groups directly concerned with labor and
industrial relations.

This Bulletin series is designed to present periodically information
and ideas on topics of current interest in labor and industrial relations.
The presentation is non-technical and is designed for general, popular
use. No effort is made to treat the topics exhaustively. At present 10
issues a year are scheduled with additional special issues from time to
time.



Additional copies of this Bulletin are available. A charge of five cents
a copy will be made, except that the first 10 copies will be furnished
free of charge to individuals and groups in Illinois. Also available are
copies of these other Institute Bulletins.

Employment of 1946 Collective Bargaining by Foremen

Seniority and Job Security Municipal Mediation Plans

Plant-Protection Employees Under Current Federal Labor Legislation
Agricultural Workers Under National Labor Relations Laws

Phillips Bradley Milton Berber

Director Coordinator of Research

Ralph Norton
Editor



UNIVERSITY OF ILLINOIS BULLETIN

Volume 45; Number 57; May 22, 1948. Published every live days by the University of
Illinois. Entered as second-class matter at the post office at Urbana, Illinois, under the Act
of August 24, 1912. Office of Publication, 358 Administration Building, Urbana, Illinois.
Acceptance for mailing at the special rate of postage provided for in Section 1103, Act of
October 3, 1917, authorized July 31, 1918.



31.1



THE CONCILIATION PROCESS

By W. ELLISON CHALMERS
Associate Professor of Economics

"Mr. Employer, it looks as though we can't work out our dis-
agreement by this process," the local union president reluctantly
stated. "Of course we always knew we could go out on strike.
We've said all along we would if we had to and we believe we can
force you to come to terms. We don't want to, but it looks as
though there is no other way for us to get what we are entitled to.
We asked for a 20-cent increase because we are sure w^e are entitled
to it. W'^e believe we have demonstrated to you, beyond any logical
argument, that the increased cost of living and the profits of the
company entitle us to it. In the interest of being reasonable and
because we would rather live with the company in peace, we have
even gone so far as to say that we would accept 13 cents. Certainly
that is much less than we are entitled to. But we are not going to
compromise any further, and your ofifer of eight cents is impos-
sible."

"Such a statement just doesn't make sense," the general man-
ager responded. "On the one hand you say that you want to be
reasonable and don't want to strike; and on the other, you refuse
to give proper consideration to what we have said. We showed you
that your cost of living figures were wrong, that you have a com-
pletely inaccurate picture of the company profits and prospects, and
above all, that to grant your demands would endanger the competi-
tive position of the company, and therefore the welfare and jobs
of our employees. We can't stop you from striking, but let me
warn you that we are determined to stick to our position, because
it is a fair position, and sooner or later you will agree to what we
are now proposing."

Situations like this develop on many occasions in union-manage-
ment negotiations in the thousands of plants in Illinois. What
should the parties do next? The cjuestion is of urgent importance
to the employer, to the workers involved, and to their union. It well
may be of great importance to the public.



4 I. L. I. R. BULLETIN

WHY THE NEXT STEP IS IMPORTANT

Let us consider first the importance to the participants.
(1) The terms of the eventual agreement are important to each
side. As in the illustration, they often iuAolve wage rates. If the
workers are seriously affected by rising living costs, the size of the
negotiated pay increase directly alTects their welfare. Equally, if
the employer is really hard pressed to balance rising production
costs against competitively-set selling prices, the welfare of the
company is as directly involved. Although disputes vary greatly in
detail, they usually are of serious enough proportions on the sub-
stance of the disagreements that the economic interests of each side
are substantially or even vitally affected.

(2) The parties are also concerned with zi'Jioi the disagree-
ment is settled. Almost all disputes eventually end in settlements.
Whether settled without a showdown economic fight, during such
a fight, or after one, the final agreement represents a general ap-
proximation of the strength of the two sides. But zvJien they are
settled makes a great deal of difference. Directly involved in the
timing of the settlement is not only the direct economic cost of
conflict to each side but also the less apparent economic effect on
the employer's market, productivity in the plant, the future bar-
gaining position of the union and many other factors.

(3) In many disputes the resulting relationships are more
important than either the terms or the timing of the settlement.
For each of them a particular dispute is simply an incident in a
long process of living together. In most disputes the most important
prol^lems are of relationships. Management has its own problems of
establishing or continuing an effective management structure, dis-
cipline, and a spirit of plant cooperation. This problem affects not
only the bargainers but the whole range of management from the
foreman to the chief executive officer. The union has its own prob-
lems of morale and support.

Both management and labor, in addition, are concerned with
building their relations with each other. Although engaged in an
industrial dispute, management frequently wants to achieve a set-
tlement that will recognize the reasonable claims of its employees
and strengthen the cooperative attitudes of both employees and



THE CONCILIATION PROCESS O

union leaders. The union rei)resentatives as fre(|uentl}- are anxious
to improve the quality of their dealino;-s with manas^enient. For
both, therefore, the fundamental concern is the effect of the solu-
tion of the specific dispute upon their future relations.

The public has a general, but nonetheless basic, interest in the
satisfactory conclusion of the disagreement. An essential element
of the free economy to which the country is committed is the free
collective bargaining process, carried on so that substantial justice
is reached between the economic interests and so that increasingly
large and efficient production results. It is fundamental to the
efficient working of the economic system that this bargaining be
carried out with the least possible interference with production.
Thus, it is of great public concern not only that stoppages be
a\oided whenever possible, but also that plant disorganization be
held to a minimum during the bargaining period.

WHAT WILL THE NEXT STEP BE?

When management and the union come to the deadlock sum-
marized in the opening paragraphs, they have a choice between four
different next steps. (1) They can agree to try harder to reach an
agreement by further bargaining. In a great majority of cases, it is
this first alternative which is chosen. If they can finally succeed in
reaching an agreement, they will have gained a closer working
relationship by voluntarily settling their differences. (2) They can
call on the services of a government conciliator to help them in
coming to an agreement. It is this process which this bulletin deals
with. (3) They can refer the cjuestion to some outsider as an arbi-
trator. This alternative has the advantage of maintaining a peace-
ful relationship between them and of assuring an impartial stud}'
of the various claims of the parties. It has the serious disadvantage
of abandoning their own responsibility to reach agreement. It
leaves both parties open to the danger that an unwise decision will
be made for them by an outsider and it i)rovides no assurance that
a deadlock is less likely to occur when they resume negotiations in
the future. (4) They can, as the union leader suggested, jiro-
ceed to a strike. There may be circumstances in which that
process will ])e considered by either the employer or the union



O I. L. I. R. BULLETIN

nienibers as a necessary and therefore, in the long run, a healthy
development. But in most circumstances this will result not only in
a loss of income for both parties but may also endanger their
efforts to work cooperatively together.

STATE AND FEDERAL SERVICES

Because the last two alternatives are freciuently unfortimate,
for the parties as well as the public, both the state and federal
governments have provided agencies for conciliation and media-
tion. The agencies are designed to participate on a voluntary basis
in negotiations when the parties seek a settlement, but are unable
to compose their differences by their own means.

The State of Illinois has assigned to its Department of Labor
the responsibility to enter disputes either on its own motion or at
the request of either party directly involved. It maintains concilia-
tors who are assigned by the Director to specific disputes. The re-
(juest for their services may be made to the Director, Robert L.
Gordon, Department of Labor. Capitol Building, Springfield,
Illinois.

The national government maintains conciliators who are mem-
bers of the Federal Mediation and Conciliation Service. The request
for their services may be made to James J. Spillane, Regional Di-
rector, Chicago. Illinois.

These two services work together in order to send their limited
staffs to the places most in need of their services. Under provisions
of the Labor-Management Relations Act, 1947, and the policy de-
cisions made under it, the federal service limits its participation to
those disputes which are interstate in their immediate implications
and which have, or threaten to have, a serious effect on interstate
commerce.

To imderstand the work of the conciliator we need to examine
the basic objectives of conciliation, the basic guides for action
which conciliators have developed from their wide experience, and
the particular procedures they use. Let us begin with the basic
objectives of the conciliation process.



THE CONCILIATION PROCESS 7

OBJECTIVES OF THE CONCILIATION PROCESS

\Miv does the government proxide conciliators? There is a two-
fold answer, explaining whv the government has such a service
and why labor and management use it. The objectives of concilia-
tion are: (1) to increase successful collective bargaining, and
(2) to maintain the maximum industrial peace.

To Increase Collective Bargaining

It is of fundamental importance, both for the parties directly
involved and for the government, that the collective bargaining
process work with the highest efficiency. At its best, the process
balances the economic interests of labor and management. This
recjuires a reasonably clear understanding by each side of its own
goals — economic, organizational and personal — and the goals
of the other party. The process goes beyond understanding to a
workable drawing together of these goals, recognizing that there
are conflicting as w-ell as common interests, that the short-run and
the long-time objectives may vary, and that the result needs to be
a realistic balance between these goals. In practice, there is not only
a drawing together of goals and attitudes, but also a balancing of
the economic strength of the two sides. At its best, the process rep-
resents the free choice of both management and the union as they
each select from the practical alternatives open to them. It is to be
expected, therefore, that when they have made their own selection
from the available alternatives, they will accept the agreement that
results and make it work. Finally, the process is expected to con-
tribute to the welfare of all parties, including a constant improve-
ment in their relations to each other.

In a great majority of cases the parties reach a reasonably suc-
cessful conclusion of their negotiations without needing any assist-
ance from a third party. It is when they become deadlocked, or
when there appears to be a real possibility that they will be stalled,
that the conciliator enters. Usually the negotiators are deadlocked
because (1) they have failed to adequately understand the goals and
problems of each other, or (2) there is present a degree of distrust
so that they have never really defined the problems that have to be
solved or there is a belief that the other negotiators are not making



I. L. I. R. BULLETIN



a serious and honest effort to reach agreement, or (3) on one or
both sides there is not sufficient determination to work out a soki-
tion of their separate and joint problems, frequently showing up
as an inflexible position by one or both sides regardless of the
problems of the other, or (4) there is an unwillingness on the part
of some or all of the participants to assume responsibility for the
conclusions which appear to be necessary.

When the Conciliator Enters

When the conciliator enters an industrial dispute it is his re-
sponsibility to size up the reasons why a deadlock has developed
and to help the parties get beyond it. He needs to help each party
to clarify its own objectives, to weigh them again in the light of
the facts, to understand the objectives and problems of the other
party, and to aid them in reaching a situation in which they can
realistically make their own choice of alternatives.

The conciliation process is a part of the collective bargaining
process and is not a substitute for it. The conciliator cannot sub-
stitute his judgments for those of the parties. He cannot decide
for them what their goals are and at what point their divergent
goals should be balanced. He cannot substitute his judgment for
their measuring of the comparative economic strength of the
parties. He must be certain that the parties accept the necessity to
make their own choices and the responsibility to live up to their
agreement.

The conciliation process can be very effective in assisting the
process of collective bargaining, but the better the parties are able
to meet the recjuirements of the total bargaining situation, the less
need they have for conciliation. Indeed, a basic problem for the
conciliator is to make certain that his services are used as little
as possible. In general, the more completely the parties are able to
work out their own relationships without third party assistance the
more likely they are to be building effective relationships wnthin
their own organizations and with each other. Thus, the first prob-
lem for the conciliator as he makes contact with the case is to de-
termine whether he should enter the dispute at all. He will not
decide that he is needed simply because there is lack of agreement
between the parties. Disagreement and dispute are the usual pre-



THE CONCILIATION PROCESS V

liniinaries to final agreement. Frequently he can best serve the col-
lective bargaining process by declining to take part and by insisting
that the parties make further unaided and sincere efforts to reach
their own agreement.

Xor is this problem involved only in the preliminary decision on
participation. If participation is necessary at one point, it may well
develop later that the hurdle causing a deadlock has been overcome,
and that the parties should resume their own unaided efforts to
reach an agreement. And even the process of conciliation itself
requires that the conciliator's efforts to bring them to agreement
be limited to aiding them to understand and work their own way
through their problems to a drawing together of goals.

To Maintain the Maximum Industrial Peace

In general, both sides in the bargaining process prefer a peace-
ful conclusion of their negotiations. For both employer and worker
the costs of a stoppage are usually high. In addition, the relation-
ship which each is striving to build up with the other may be
seriously damaged by an economic fight. Of course, these generali-
zations are not always true. There may be special circumstances
for one or even both parties that lead them to believe that an eco-
nomic showdown will be desirable. In any case, it seldom happens
that either side is prepared to accept peace at any price. The basic
problem for each participant is to determine what are the costs to
each side of an economic conflict and to weigh the advantages of
the peaceful means that may be available.

It is the role of the conciliator to help the parties choose peace.
As a representative of the public interest, he represents the general-
ized interest of labor and of management for peaceful and there-
fore constructive labor relations. More than this, he represents the
public interest in avoiding the secondary effects of a stoppage of
production: the loss of worker income, the loss of profits, and the
emotional conflicts that result. In part his job is to help the parties
see more seriously and vividly their own self-interest in a peaceful
settlement. ]\Iore than that, he has a responsibility to insist that the
parties look realistically at their public responsibility to seek a
peaceful way out.

Applying this second objective — aiding in the preservation of



10 I. L. I. R. BULLETIN

industrial peace — requires as keen judgments of the conciliator as
does the first, of increasing collective bargaining. Frequently, the
serious stage of collective bargaining is not reached until each side
has gone a long way in testing out how determined the other side
is to stick to a proposition. Thus the free collective bargaining
process can, and frequently does, involve threats of strikes by
unions and the taking of unyielding positions by employers. In such
circumstances, the conciliator has to find a balance between his two
objectives. Too great an emphasis on the needs for industrial peace
may interfere with the necessity for the parties to make their own
maximum efforts in collective bargaining. On the other hand, too
great passiveness by the conciliator as a deadline nears or during
the course of a strike will prevent the conciliator from making his
highest contribution to the industrial peace which the long-run
interests of the parties and particularly of the public reciuire.

ABILITIES CONCILIATORS NEED

Obviously, these twin objectives need to be applied by indi-
vidual conciliators. Since the success of conciliation depends so
largely on an intimate understanding of the real issues involved
and of timing, the individual conciliator's abilities are crucial. To
be successful the conciliator must be gifted in his ability to meei
and deal with people in such a way as to inspire their confidence in
him. He must have integrity and they must believe in his integrity.
They must be convinced that he understands his job and can de-
velop maneuvers and ideas which will contribute to the successful
working out of their dispute. He must have a calm temperament
that can handle conflicting personalities and possibly violent emo-
tions. He needs a keen insight into the reasons why people act as
they do, and a sympathetic understanding. The whole process very
largely depends on his temperament.

The conciliator needs to know the entire range of industrial
relations. He needs to understand fully the subtleties of the collec-
tive bargaining process and its many variations. Some part of this
understanding he may get by specialized training, but a great deal
of it he must gain by personal experience, both as a conciliator and,
earlier, as a labor or management participant.



THE CONCILIATION PROCESS 11

BASIC GUIDES FOR THE CONCILIATOR

A governmental service organized for the twin objectives noted
above and composed of well-qualified conciliators might let the man
assigned handle each case according to his own best judgment. But
more than "good judgment" is necessary. Experience has developed
a set of objective guides to action. They indicate the approach fol-
lowed by the successful conciliator. What are these basic guides for
the conciliator?

Be Impartial. The conciliator must avoid both personal bias
and other social objectives. Such an edict does not mean that the
conciliator is without opinions on successful relationships between
management and the union. We have already indicated that he
must be an industrial relations expert. He must have clear opinions,
therefore, on a wnde number of the problems that arise at the bar-
gaining table or that lie unspoken behind the dispute he is dealing
with. The requirement of impartiality does not mean that he should
be without opinions on the procedures or even the terms that would
be most likely to bring the dispute to a successful conclusion.
Finally, it cannot be assumed that the conciliator, any more than
any other human being, is completely without bias.

Impartiality Is a Subtle Problem. It requires that the con-
ciliator eliminate from his judgment on the case whatever biases
he may have, whether they be economic or personal. It requires that
he avoid personal prejudice. He needs to concentrate exclusively on
helping the parties to an agreement on any terms which they are
both prepared to accept. He seeks to promote effective collective
bargaining and industrial peace without being influenced by any
other personal convictions or social purposes.

Know the Case. The conciliator must know the goals of
the parties and the background of the case. Like every other prob-
lem in human relations, the issues are almost always more subtle
and more complicated than appears on the surface. Indeed the
fundamental issue may be an efi^ort to deal with a problem that
is not even mentioned in the formal statement asking that the pro-
posal be accepted. To suggest a few possibilities: The real drive
behind the management position in our illustration may be the chief
barsrainer's desire to establish a record for himself with his own



b



" 0^ ILL Lia



12 I. L. I. R. BULLETIN

superiors. It may be a need to moderate the strength of the union
by besting them in the bargaining. It may be an expected shift in
management organization which will affect the positions of the
chief bargainer and the others on the management team. Or it may
be that the workers haven't been putting out their best personal
effort.

On the other hand, the union committee may be concerned
principally with the loyalty of workers to the union. The main
problem may be a matter of prestige between leaders in the local
or in the international. Behind it may lie a desire to find a peaceful
solution or the belief that the union's interests are best served by
an open conflict. There may be frictions within the union bargain-
ing committee that have meaning in themselves or are symptoms of
other problems in the shop.

Relationships Between Personalities

Each negotiation involves personalities as well as issues. Some
of the most important elements of the problem may lie in the rela-
tionships between personalities, either on the same side or across
the bargaining table. The conciliator must understand such personal
relationships and the ways he may approach the individuals in
order to work with them most effectively.

Gain the Confidence of the Parties. The conciliator cannot
get a full understanding of the dispute ^until the parties have ac-
cepted him. This recjuires not only that he maintain his personal
integrity and impartiality but also that they be convinced of both.
His actions have to be based on the impressions he makes on the
parties as well as on his own convictions. As they accept his im-
partiality and ability and as they recognize that he needs fully to
understand the dispute, both parties will gradually reveal their own
problems and objectives. When this sound relationship has been
established, the conciliator is in a position to make realistic and
acceptable suggestions.

Help the Parties Understand Their Own Problems. Nego-


1

Online LibraryWilliam Ellison ChalmersThe conciliation process (Volume BEBR Faculty Working Paper v.2 no.2) → online text (page 1 of 2)