Joe, the union chief steward, was approached one morning by Hank, a third shift employee, who was very low on the seniority list. Hank had concerns about potential layoffs and questioned the fairness of the union rules that seemed to prioritize seniority over performance.
Hank expressed his frustration, “That doesn’t seem right; I’m a good worker and I need the job.”
Joe reassured him, “Hey, we’re not the ones doing the layoffs, the company is; we’re just trying to make them treat everyone fair.”
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Why do we have seniority systems?
Seniority systems were established to address the problem of management favoritism and discrimination in the workplace. Unions believe in treating all workers equally and fairly, and seniority systems serve as a remedy for this issue.
Imagine a workplace where the employer has full control over the following:
- Determining who works each day
- Allocating job assignments
- Deciding how much each worker gets paid
- Granting overtime
- Choosing who gets laid off or recalled
- Assigning vacation time and scheduling
If the employer has sole authority over these matters, it often leads to favoritism and discrimination. Workers end up competing against each other to gain the employer’s favor for better treatment, such as pay raises or time off. To limit management’s control and ensure fairness, seniority systems were introduced, where the number of years a worker has served with the employer becomes the determining factor.
The benefits of using “seniority” become clearer when considering how employees receive pay raises to reach the top rate of their jobs. Under a “merit pay” plan, raises are at the employer’s discretion. In contrast, a seniority-based pay plan automatically moves employees up the pay scale based on their length of service.
Seniority systems are a result of bargaining
Most seniority systems are a result of negotiations between the union and the employer. They also reflect the existing practices that were in place before the union was formed. Although there are variations among seniority systems, their purpose remains the same: to eliminate unfairness and prevent favoritism and discrimination in the workplace.
In the past, not all seniority systems prevented discrimination
While the main goal of seniority systems is to prevent favoritism and discrimination, there have been instances where some systems failed to achieve this. For example, in the early days of unions in the steel industry, discriminatory hiring practices were rampant. African-American workers were only hired for the lowest-paying and most dangerous jobs. In some cases, the seniority system in place reinforced this discrimination by only considering departmental seniority rather than total seniority with the company. This meant that African-American workers with more overall seniority were excluded from better-paying and safer jobs. Federal courts had to intervene in the 1970s to rectify this unjust practice.
A pure seniority system, solely based on an employee’s years of service, would lay out the order of layoffs, rehiring, transfers, promotions, shift preferences, and vacation allocation based on seniority alone. However, many employers object to such systems because they require moving workers around, resulting in additional training costs. For employers focused mainly on profitability, fairness often takes a back seat. To address this concern, seniority systems may include provisions that consider an employee’s ability to learn new tasks within a reasonable time.
Does seniority only protect senior employees?
Hank believed that seniority only benefited older workers, but union stewards like Joe explain to new employees that seniority offers protection and benefits to everyone. Once an employee completes their probationary period, they enjoy protection against unjust termination, which is not guaranteed in non-union workplaces where workers can be fired at any time.
Furthermore, seniority makes employees eligible for various benefits, including vacations, holidays, sick time, and insurance coverage. In non-union workplaces, employers have the freedom to grant certain benefits to select individuals, creating disparities among employees. However, in a unionized workplace, seniority ensures that benefits negotiated by the union cannot be arbitrarily taken away by the employer.
Seniority also plays a significant role in job recall rights. In non-union workplaces, employers have no obligation to rehire laid-off employees. In contrast, seniority grants employees the right to be recalled to their previous positions in unionized workplaces. The longer the employee’s seniority, the longer their recall rights.
The conversation continues
Joe continued his conversation with Hank, reminding him of the protection the seniority system offers. When Hank’s foreman was upset with him for taking time off to care for his sick child, the union stepped in to prevent an unfair reassignment. Joe emphasized that it was the seniority system negotiated by the union that ensured fairness and protected Hank’s rights.
As Joe prepared to return to work, he concluded, “And one last thing, Hank. Next month, when you receive a pay raise that puts you at the top rate, it’s all thanks to the seniority system we negotiated.”
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