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Labor Relations News Update June 2, 2014

Today’s Labor Updates:

United Kingdom: Let the games begin – dealing with increased holiday requests

NLRB Says Cussing Out Your Employer Is OK If You Are Upset About Work

In China, managers are the new labor activists



United Kingdom: Let the games begin – dealing with increased holiday requests

MacRoberts LLP  Katy Wedderburn  United Kingdom  May 29 2014

Two of the biggest events of the sporting calendar are on their way! The World Cup kicks off on 12 June and, once that’s over, the Commonwealth Games will open in Glasgow on 23 July. Given that both events are likely to lead to an increase in unauthorised absence, employers should have procedures in place to ensure minimal disruption to their business.

There is likely to be an increase in sporadic holiday requests during this period. Employers should act fairly, consistently and in a non-discriminatory manner when considering such requests. “First come, first served” may be the preferred option in some cases.

Whilst employers should not automatically assume that sickness absence during the World Cup or Commonwealth Games is not genuine, they may have grounds to be suspicious about some employees. Employers should start making employees aware now that they will closely monitor sickness absence during the summer months and communicate how they will deal sporting-related unauthorised absences. For example, warning employees that matters will be dealt with under a disciplinary procedure should hopefully act as a deterrent. It is also worth checking contracts and handbooks to see if pay can be withheld for unauthorised absences.

However, in order to limit liability for discrimination and/or unfair dismissal claims, employers must carry out proper investigations and avoid jumping to conclusions about absences, especially where employees may already have underlying health conditions.

Another way to minimise unauthorised absence could be to implement schemes to accommodate employees watching the events. This could include things such as flexible working during the period (allowing shift swaps or early finishes) or providing access to a television at work to watch key events. It is important to ensure, however, that the business can reasonably function with such changes.

Also, many events will no doubt be streamed via social media and employees may use this to watch the games whilst at work. This may prove problematic and so employers should remind employees of the terms of any IT or social media policies now, highlighting what is and is not acceptable and how breaches of such policies will be dealt with.

Some employees may engage in post-event celebrations resulting in higher episodes of lateness or performance failings. Employers should make it clear what will and will not be tolerated, referring to its policies as required.

Lastly, employers must recognise that some employees will have no interest in the events at all. By ensuring that any benefits, changes or flexible arrangements are applied consistently to all employees while these sporting events are taking place, employers will mitigate the risk of any claims of unfair treatment.

Let the games begin!


NLRB Says Cussing Out Your Employer Is OK If You Are Upset About Work

Posted by Michael G. McClory

May 30, 2014 3:15:00 PM

According to the National Labor Relations Board website, the Board “protects the rights of most private-sector employees to join together, with or without a union, to improve their wages and working conditions.” In practice, the Board does not always adhere to this idealistic view of its purpose.

Consider the following facts. A local used car dealership does what it can to sell cars. It displays vehicles on its lot and periodically holds “tent sales” in the parking lots of other local businesses. The dealership employs a small non-union sales force, which it pays on a straight commission basis.

In August 2008, newly hired salesperson Nick immediately began questioning the dealership’s policies regarding breaks, restroom facilities and compensation. For example, at a sales meeting in his second week on the job Nick asked about restroom and meal breaks during tent sales. One of his supervisors responded by saying “you’re always on break buddy . . . you just wait for customers all day.” Over the next two months Nick complained about the amount of commissions and the lack of a guarantee of at least minimum wage. Among other things he contacted the state wage and hour enforcement agency, which told him that “salespeople were entitled to the minimum wage as a draw against commissions”. Nick told other employees about this. He also spoke to the office manager, who told him he could always work elsewhere.

Eventually, dealership owner Tony had a meeting with Nick. Although Tony “had no intention of firing” Nick when the meeting started, he changed his mind based on Nick’s behavior in the meeting. Tony told Nick that the negativity needed to stop and that he should not complain about pay. Nick persisted; he complained about the minimum wage issue and told Tony he did not trust the dealership’s calculation of commissions. Tony twice reminded him that he could work elsewhere if he did not trust the dealership.

“At that point, [Nick] lost his temper and in a raised voice started berating [Tony], calling him a [bleep bleep], a [bleep bleep], and [a bleep]. [Nick] also told [Tony] that he was stupid, nobody liked him, and everyone talked about him behind his back. During the outburst, [Nick] stood up in the small office, pushed his chair aside, and told [Tony] that if [Tony] fired him, [Tony] would regret it.”

Not surprisingly, Tony fired Nick. The date was October 28, 2008.

Five and a half years later, the Board this week issued its opinion in Plaza Auto Center, Inc. and Nick Aguirre. The matter, which had been reviewed once by the Ninth Circuit Court of Appeals, was back before the NLRB for the express purpose of determining whether Nick’s outburst against Tony during protected activity caused him to lose the protection of the National Labor Relations Act.

To address this question, the Board applied the test articulated in its Atlantic Steel (1979) decision. The test calls for four factors to be balanced in determining whether conduct that otherwise would be protected by the NLRA loses that protection because of the “opprobrious nature” of the conduct. The factors include: (1) the place of the discussion; (2) the subject matter of the discussion; (3) the nature of the employee’s outburst; and (4) employer provocation of the outburst by unfair labor practices.

The Ninth Circuit had instructed the Board to do two things: determine the nature of Nick’s outburst and to then rebalance the four Atlantic Steel factors. Focusing on the nature of the outburst, the Board said the outburst “involved obscene and denigrating remarks that constituted insubordination” but did not constitute “menacing, physically aggressive, or belligerent conduct.”

Although the nature of the outburst factor weighed against statutory protection, in rebalancing all of the factors the Board concluded that Nick’s conduct did not result in the loss of NLRA protection. On the one hand, the Board said that Nick’s “obscene and denigrating remarks must be given considerable weight because [Nick] targeted [Tony] personally, uttered his obscene and insulting remarks during a face-to-face meeting with [Tony], and used profanity repeatedly.” However, the Board had concluded that the outburst was provoked and weighted that conclusion more heavily.

As a result, the Board held that the dealership had discharged Nick because of “protected concerted activity” in violation of Section 8(a)(1) of the Act. Further, the Board ordered the dealership to offer immediate reinstatement, with seniority, and to pay Nick “for any loss of earnings and other benefits suffered as a result of the discrimination against him.”

The Bullard Edge finds the decision disturbing on a number of levels. I consulted my colleague Dan Rowan for some perspective.

First, this is yet another example of the Board being agenda driven rather than merits driven. The Board acknowledged that going into the meeting Tony did not intend to terminate Nick for his protected activity, but changed his mind based on Nick’s obscene conduct in the meeting. Nevertheless, the Board excused all of that because Nick was upset about work.

Second, the dealership made a mistake in telling Nick at every turn that he should not complain about pay. This is the kind of comment that the Board almost always finds unlawful. In this case, the Board cited it as one of the reasons for concluding that Nick was “provoked” into his outburst. Discouraging employees from discussing their pay or making negative comments about their pay to management might feel good, but is risky.

Third, even though this was one employee complaining about his own pay it was still protected, concerted activity. The Board’s position is that because compensation issues affect all employees, even a single employee on his or her own is engaged in protected activity when complaining about pay.

Fourth, the employer here was non-union. This case is yet another example of the NLRB’s expansive view of its jurisdiction, beyond unionized workplaces and union organizing activities.  Non-union employers should be aware of this.

The Bullard Edge



In China, managers are the new labor activists

By Alexandra Harney and John Ruwitch

May 31, 2014


SHANGHAI (Reuters) – Behind China’s biggest strike in decades last month was a new player in Chinese labor activism: management.

A previously unpublished account from inside the strike at Taiwanese shoe manufacturer Yue Yuen obtained by Reuters shows that supervisors were the first to challenge senior plant leaders about the social insurance contributions that became the focus of the dispute. Yue Yuen Industrial Holdings declined to comment.

The involvement of managers underscores the growing complexity and unpredictability of labor relations in China. A generation of long-serving migrant factory employees is starting to retire just as the economy slows and the spread of social media makes strikes easier to organize.

Yue Yuen’s strike wasn’t the first time in recent years managers, rather than front-line workers, helped orchestrate industrial action in China. Managers were also involved in leading a strike at IBM’s facility in Shenzhen in March, according to a worker and another person briefed on the strike. IBM declined to comment.

Supervisors and other low- and mid-level managers also helped corral workers during a March strike at Shanmukang Technology, which supplies mobile phone cases to Samsung Electronics, a former employee said.

Managers have been orchestrating strikes during international deals for years, lawyers said. “It happens all the time” that managers encourage workers to strike during an international transaction that affects a company’s Chinese operations, said Jonathan Isaacs, special counsel with responsibility for Chinese employment and labor issues at law firm Baker & McKenzie in Hong Kong.

In many cases “the reason an M&A transaction, layoffs or restructuring goes sideways or causes labor unrest is that the local management were disgruntled and riled up the rank-and-file workers”, he added.

In November 2011, mid-level managers led thousands of PepsiCo Inc workers to strike in protest against the terms of the company’s acquisition by Tingyi Holdings, according to Hong Kong-based worker advocacy group China Labour Bulletin (CLB).

However, some of the largest recent strikes, including the Yue Yuen action, don’t involve a factory sale or restructuring.

Labor unrest has surged in China in recent months as slowing economic growth and rising costs have squeezed companies in industrialized areas like the Pearl River Delta in southern Guangdong province. CLB has recorded 319 strikes and labor protests since the beginning of the year.


Chinese factory disputes typically start with younger employees pushing management for higher pay. But in the last few years, as restructurings have become more common, managers have begun to take a more active role in negotiations and work stoppages because they have more at stake, lawyers said.

China’s 2008 labor contract law requires companies terminating employees to pay compensation worth one month’s salary for every year of employment. The longer an employee has been working at a factory, the greater the potential payoff from a closure, merger or restructuring.

Turnover at Chinese factories is high – reaching 100 percent a year in some companies. Younger workers spin through jobs quickly, sometimes staying only months in one plant. Managers can be among a plant’s longest serving employees.

“Strikes started by older workers often come about because of a change in the company, when a company is being merged or restructured,” says Dong Baohua, professor at the East China University of Politics and Law. “Older workers want to cash in on their years of service.”

Line managers may have information about organizational changes before rank-and-file workers. And they may use the threat of a work stoppage to motivate corporate leaders to improve managers’ pay or compensation, lawyers said.

Managers “are better at motivating and organizing others,” says Guangdong Labor Institute Deputy Secretary-General Yang Zhengxi, who noted that his observations were based on field research in a Sanyo electronics plant in Shenzhen in 2011. “But managers will always stay off the front lines in strikes, always be in a mobilizing role.”


According to the account compiled by a labor group, a supervisor first raised a complaint about the social contributions issue in late March, a few weeks before the strike began. The supervisor and colleagues spread word among workers, who then went to look up their social insurance contributions. The labor group requested anonymity to protect its relationship with Yue Yuen staff.

A Yue Yuen worker who would only give his name as Wang said low-level managers were involved in pressuring workers to return to work once the company agreed to their demands. The company told them they would go bankrupt if the workers did not compel the workers to go back to work, he said.

During the IBM strike, after a chaotic first day, line managers began to organize the workers, according to a worker who asked not to be identified.

Wu Xingcan, 28, worked on and off at South Korean-owned Shanmukang Technology between 2012 and last month. The March strike was triggered when the factory requested that workers contribute more to the social insurance fund in line with Chinese law, Wu said. After the strike began, group leaders and supervisors privately encouraged workers to stay off the production line. Shanmukang could not be reached for comment.

“The longer these people have worked in factories, the greater their interest in social insurance, and the more likely they are to incite other workers and participate in strikes themselves,” said Pun Ngai, sociology professor in the applied social science department at Hong Kong Polytechnic University.

China has some 40 million migrant workers aged over 50 – about 15 percent of the country’s 262 million migrant workers, according to the National Bureau of Statistics.

At Yue Yuen, the common belief among roughly two dozen employees with whom Reuters spoke during the strike was that the social insurance problem came to light when a newly-retired employee went to collect her retirement benefit earlier this year. One worker told Reuters this retiree was Chen Yuchi, a senior employee who left the factory last year and is now living in central Hubei province.

In 1989, aged 26, Chen moved to Gaobu where the newly-founded Yue Yuen had just built its sneaker factory. She took a job, and in April 2013, after 24 years at the factory, retired as a manager. In August, after turning 50, she went to the social insurance office to collect her retirement benefit.

“It was only a little more than 600 yuan ($96). I thought, it’s so low. Nobody explained why,” she told Reuters by telephone last month.

Shocked, she returned to the managers’ dormitory and told former colleagues there. When Reuters reached Chen this week, she declined to discuss the issue further. ($1 = 6.2486 Chinese Yuan)




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