GEORGE W. TAYLOR - NAARB · GEORGE W. TAYLOR Wbarton School ... It formerly was the practice in the garment industry to share work throughout the day. ... tries, such as the needle

CHAPTER VI

SENIORITY CONCEPTS

GEORGE W. TAYLOR

Wbarton School

University of Pennsylvania

In developing the subject of seniority it is my intention to placethe subject in its industrial relations setting instead of concentratingon particular arbitration problems. At meetings of this sort, it seemsto me, we should strive to drive below the surface and get at some ofthe fundamentals of the problems considered.

The seniority question stems initially out of one particular fact ofthe wage payment system. Up until now, at any event, labor is pur-chased on a retail basis. Management employs the services of labor,only for so long as those services are required, and on a hand tomouth basis. There are a few exceptions. Call-in pay provisions havebecome standard in labor agreements and the time for which menmust be compensated each day has become longer in recent years.By and large, however, labor is purchased on a retail basis. With afew exceptions, management possesses the right to lay off employeeson short notice, whenever their services are not required. One func-tion of seniority is to determine who gets laid off and who continuesto be employed. There are industries, however, where seniority isno part of the labor relationship, even though the services of em-ployees may not be on a full-time basis or for regular hours weekafter week. The problems of employees arising out of the uncertaintyof their term of employment are dealt with in various ways. Seniorityis but one way which has emerged under circumstances to be notedpresently.

In a few industries, particularly the garment trades, division ofwork is the device used to allocate work opportunity. But, this devicecannot adequately serve the purpose unless it is related to the size

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128 ARBITRATION TODAY

of the workforce and to policies respecting the use of overtime.Otherwise division of work could entail the employment of too manypeople for too long a time on a greatly curtailed work schedule.

In the garment industries, "seniority" is virtually an unmention-able word. As already indicated, however, in the garment industriesthere is considerable bargaining over the number of employees whoconstitute the regular work force. A rather critical problem may arisewhen management says, "We want to increase the number of em-ployees on our regular work force." An undue increase, however,could result in undue underemployment during slack seasons underthe division of work policy. In negotiations, then, consideration isgiven to the question of whether or not the need for more employeesis occasioned by a higher general level of business or merely becauseof a seasonal demand peak. Provision for increased overtime workmight be the outcome instead of increasing the size of the workforce.

Bargaining on the size of the work force and on the use of over-time as a means of keeping a balanced work force is a concomitantof the work-sharing program. This is one approach to meeting theemployee's job insecurity arising out of the fact that the services ofemployees are not engaged on a bulk basis. There are numerousvariations of this general program. For example, in the cutting branchof the men's clothing industry in Philadelphia, each cutter has a homebase in a designated company where he always has the right to sharework. He may take a job elsewhere if business falls off in the homecompany at the same time another company's needs have increased.He can return to his home company, however, and share work therewhenever he desires to do so.

It formerly was the practice in the garment industry to share workthroughout the day. Some changes in the work sharing practices haveoccurred because of the unemployment insurance eligibility require-ments.

The point I am making is that the basic problem under discussionconcerns the practice of buying labor services on a retail basis. How

SENIORITY CONCEPTS 129

are the costs of layoff apportioned? The use of seniority to designateemployees for layoff is not the only approach. A system of bargain-ing over the total number of people in the work force, over the useof overtime, and for a work sharing program can be utilized to meetthis problem.

Such an approach is perhaps neither acceptable nor feasible in otherindustries. When work opportunity declines, management may desirework sharing all right, but it may not concede to bargaining over thework force components. Neither of the parties to a labor agreementmay conceive of overtime as a matter for bargaining in relation to thework stabilization objective.

In most manufacturing industries, work sharing is practiced eithernot at all or to only a limited extent. Some labor agreements providefor the reduction of hours to thirty-two per week in slack periods and,after that, for the layoff of the least senior man so that scheduledhours never decrease below 32 per week. Even that degree of work-sharing seems to have been extensively discarded in recent years. Thedemand of workers in many industries has not been to share work,but to insure that the older men be retained on the job and be pro-vided with full-time employment, even though the people of lesserseniority receive no employment at all. This is quite different fromthe work sharing approach, as previously outlined, as a method formeeting the employee problems arising out of the purchase of serviceson a retail basis.

In many industries, then, seniority is looked upon as "a fair andequitable" way of determining who stays on the job and who doesnot, in times of a scarcity of work opportunity. Seniority is thus ameans of providing work guarantees for a variable and fluctuatingnumber of employees.

If the problem is analyzed from that point of view, one can makethis observation: The current idea of some unions—that short-timeemployment should be eliminated, i.e., that there should be guar-anteed annual employment or a guaranteed annual wage—is relatedto the seniority question. If annual work or wage guarantees are


installed, one of the uses of seniority is changed. This is particularlythe case if it is assumed that the objective is not to pay employees fornot working, but to regularize employment.

The claim of unions that labor should be purchased in bulk, or ona wholesale basis, raises many questions about the utilization oflabor. Again, this is on the assumption that the objective is for regu-larization of employment rather than pay for not working. In theseterms, the guaranteed annual wage need not be looked upon as some-thing brand new. It constitutes an approach to the problem of theuncertainty of job opportunities which has been dealt with through adivision of work programs or by seniority systems. The significanceof this observation is that each of these approaches involves operatingcosts and requires an adjustment of production practices.

One company recently investigated very carefully the costs of theseniority practices which had been built up over the years. Layoffsentailed much bumping and extensive re-allocations of jobs and ofjob assignments. I know of one situation where, in contracting thetotal work force by ten per cent, over forty per cent of the peoplehad to be reassigned. This is perhaps unusual. But the shifting ofemployees inside the plant and the interferences with production thatoccur in the process of effectuating work guarantees to the men withhigh seniority can be very costly.

In terms of a query rather than as an assertion, one might ask:Could a type of guaranteed annual employment be developed which,along with necessary changes in the manner in which labor is utilized,would be less costly than the seniority system of allocating jobs?

It is significant that the so-called annual wage is presently beingurged in the seniority-oriented industries rather than in other indus-tries, such as the needle trades or in the building trades, where em-ployees have not used seniority as a part of the industrial relationsarrangements.

A pertinent question about guaranteed work or wages concernsthe adjustments in seniority which might be entailed. There is nottime now to discuss this whole question of the relations between


seniority and the problem posed by GAW. Much depends, of course,upon whether the guarantees are developed as the payment of in-come supplementing unemployment insurance benefits, i.e., extrapay for not working, or, essentially as an aspect of the utilization oflabor. If the issue is conceived as a labor utilization problem, theseniority question then becomes an integral part of the problem.

Assignments to Better Jobs

Since this paper deals with seniority concepts, it should be madequite clear that the discussion so far has been limited to but one im-portant function of seniority. There is another aspect of seniority,besides the determination of who gets laid off and who keeps a joband therefore has a form of guaranteed employment. To understandthe other major functions of seniority, it is important to point outthat seniority is no part of the labor management relationship in mostcraft unions. The building trades are an example. Yet, seniority maybecome almost a fetish in some manufacturing establishments. Thereasons, it seems to me, are found in the significant differences inwage payment methods and in the economics of the two situations.

There are actually two contrasting systems of wage payment forcraftsmen and factory workers. The concepts of wages are quite dif-ferent. A craftsman stands ready to perform any and all tasks en-compassed by his craft jurisdiction. He receives an hourly rate, usuallystandard for the labor market, for performing any task within thecraft jurisdiction, whether it is a simple or a complex task. The wageis not directly related to the specific work which the employer seeks tohave performed. If a plumber is engaged to do a simple job withinhis craft jurisdiction, such as changing the washer on a tap, or puttingin a drain pipe, I suppose the rate is the same. Each task is encom-passed within the craft jurisdiction.

The concept underlying the system for paying a craftsman wagesseems to be something like this: the craftsman is the embodimentof a reservoir of skill. It is often said by the unions in this field that"a man is worthy of his hire." So if the employee performs any task


within his craft jurisdiction, he receives the rate for the trade. Not therate for a particular job. That point of view is an extremely interest-ing one which we have simply accepted. Payment is to the man, notfor the job. The reasons for that, I judge, are that the craftsmen'sskills are readily transferable to other employers and because, inmany of the crafts, employment is casual in nature there is, inci-dentally, little chance for promotion for craftsmen.

Craft employees, like factory workers, seek to maximize job secur-ity because, with few exceptions, the craftsman is employed as hisservices are required. He is also subject to layoff upon short notice.But, the craftsman looks to the market for his job security ratherthan to a particular employer. His emphasis on craft jurisdiction, andon the preservation of jurisdictional lines, is roughly comparable tothe emphasis placed by factory workers upon seniority. It is the waycraftsmen seek to augment job security, and to increase the possibilityof job regularity, under the unique circumstances of their employ-ment. Emphasis upon the right of the craftsmen to perform theirtrade which is available in a market is another avenue for maximiz-ing job opportunities even though lay-off without advance notice isthe general rule.

There are many industries, then, in which the employees look to themarket rather than to the employer for their job security. One of theconsequences to be noted is the differences between the pension pro-grams that are set up, or the health and welfare programs, in the twotypes of industries. The market-oriented employees set up marketfunds. They do not ask their employers to assume a responsibilityfor paying a pension to employees who attain a certain age. Theycan't, because their employers change. So, they ask their employersto pay a certain percentage of each payroll into a pension fund whichis used to provide benefits to employees after a designated servicein an industry.

It might here be noted, too, that in industries like the needletrades, where there is little or no interest in seniority, the employeesare also market-oriented. They are essentially craftsmen. Operators


are not promoted to become pressers, or cutters. Operators can trans-fer their skills between plants, and they do so. Companies are un-stable and go out of business, so that it is a characterization of theneedle trades that pensions and health programs are established ona market basis.

Most employees in factory operations, in large scale manufacturingoperations particularly, are not market-oriented. Their skills are notreadily transferable, especially if they have accumulated seniorityin one company and would have to start over at the bottom of theseniority ladder of another concern.

I remember in younger days, and some of you undoubtedly alsoremember, that a young man planning how to make a living wastraditionally advised to "Learn a trade. No one can take that awayfrom you. You will have something that you can sell anywhere."Some career counsellors doubtless say the same thing today to someyoung men. But I would judge more often than not, they say, "Getwith a large corporation and get seniority." This is the moderncounterpart of learning to be a craftsman.

Employment in the manufacturing enterprise frequently does notdepend upon the capacity immediately to take over a certain job andperform efficiently. Most large manufacturing enterprises have atraining department. Employees are trained to do the jobs in themanner in which management wants them performed.

Hiring for the great mass of so-called semi-skilled jobs in manu-facturing industries does not require great prior experience or spe-cialized ability. Most employees readily adapt themselves, undertraining programs of the company, to perform the job satisfactorilyafter a relatively short period of time.

Here then is a great pool of jobs in manufacturing enterpriseswhich require no extensive prior training, and for which most peoplecan qualify with a limited amount of training. The wage rates paidfor those jobs vary considerably. The system of wage payment forfactory operation is a marked contrast to that used to pay craftsmen.The man is not paid for any reservoir of skills. He is paid for the


job actually performed. Indeed, the value of lifting a piece of steelfrom point A to point B is measured and given a separate wagevalue. In other words, jobs are broken down into elements and eachelement is given a wage value.

These jobs, in the vast semi-skilled category, are evaluated in termsof some objective measurement of job relationship. Unlike the crafts-men, the particular job which is assigned to an employee determinesthe wage. Assuming that most employees can do any of the jobs witha minimum of training, by what rule are the better paying jobs allo-cated?

Not only do the wage rates of this great mass of semi-skilled jobsvary, but so does their attractiveness in respect to hours (day shiftand night shift), location, and other working conditions. By whatrules do those jobs get allocated? The second major function ofseniority is in allocating semi-skilled and unskilled jobs of varyingattractiveness among employees of relatively similar capacity to per-form the jobs. The way in which these jobs are allocated with respectto promotions, layoffs, recall, transfer, temporary assignments, andso forth, are all encompassed by this second function of seniority.

Timing of Seniority

Seniority has been extensively utilized in the mass production in-dustries in which job specialization can be practiced and where wagesare paid in relation to the job actually performed. The method ofallocating jobs has a bearing upon the total number of employees onthe payroll and also upon labor costs. Job assignment rules determinethe manner in which labor is utilized.

An extreme use of seniority can lead to bizarre situations. I amthinking now of a case I encountered not too very long ago, arisingout of an extreme use of seniority. In this case, what was called in-stantaneous seniority had become a standard practice. The senior em-ployees had a right of assignment to any job vacancy, irrespective ofits nature or duration. When work started in the morning some em-ployees were not present. Nobody knew whether those not on the


job were absentees for the day or were simply late in reporting. Thedemand of the union, acceded in by management, was that the em-ployees who were present would immediately receive job assignmentsof the basis of their departmental seniority. Job assignments wouldthen be made with high seniority employees receiving the most de-sirable jobs.

Then employees would straggle in with excuses for their tardi-ness. The need for production happened to be so urgent that theexcuses were accepted. But, jobs would then be reallocated, to workin the tardy employees, on the basis of departmental seniority. A newre-shuffling took place in order to get the jobs finally allocated forthe day's work. Well, not really finally allocated, because, if some-body had to go to the hospital for a cut on his finger, the jobs wouldbe reallocated again on the basis of seniority. That constituted anallocation of jobs on the basis of giving a preference to high senioritymen right down to the last inch. Such practices, and others like them,evidently come into being because of the great emphasis upon pro-duction during the past ten or fifteen years.

Most of the problems about seniority arise out of its use as anallocator of the semi-skilled jobs among employees who are reason-ably competent to perform the various jobs after a minimum oftraining.

I know that a paper presented earlier on this program dealt withthe factor of "ability" as an allocator of these jobs among the em-ployees. I am sorry that I was not present when that paper was de-livered. In my experience, management has not generally been ableto make these job assignments on the basis of ability rather than ofseniority. The foremen find it difficult to be persuasive in convincingthe employees of the superior ability or potentiality of Employee Aas compared to Employee B. And, perhaps it is expecting too muchof foremen to ask them to make such evaluation in view of all theirother responsibilities. In nine cases out of ten, it seems the foremanfinds advantages in using seniority as an objective measurement forallocating the job opportunities. The problem is not a question of


using seniority or ability but of using seniority in a reasonable man-ner.

There is no doubt that costs are affected if transfers, job reassign-ments, and re-shuffling of job assignments becomes excessive. Evenif training for no more than a few days or a week is required to do ajob satisfactorily, the cost can become consequential if a large pro-portion of the work force is constantly under training for jobs whichwill be held but briefly. The use of seniority exclusively to allocatethese job opportunities, as each brief job vacancy occurs, can be car-ried so far that, in order to provide preference for a relatively few longservice employees, the majority of the workers can be placed at a greatdisadvantage.

The seniority clauses of labor agreements are among the leastthought-out clauses in the agreement. In consequence, seniority prac-tices in the plant are highly variable. Under the same clause, widelydissimilar methods for allocating jobs have grown up. I know of nofield where the gap between the words of the agreement and theperformance under the agreement is wider than in seniority.

It is important to arbitrators that the bargaining of the parties withrespect to seniority has been not definitive. Loose phraseology of thelabor agreement, and a wide divergence in practices, indicate that acomplete meeting of the minds about how seniority would operatehas often not been achieved with the consummation of a labor agree-ment. After all, arbitration is usually about as good or as bad as thecollective bargaining which brings arbitration into being. If collectivebargaining with respect to seniority is exceedingly poor, not only withrespect to the seniority clause but the practice under it, an arbitratorcan scarcely straighten out the difficulty. In that connection, I willfinally and briefly refer to a few of the types of arbitration cases thatarise in the area of seniority.

Some seniority cases are relatively simple. They relate to an al-leged error in the administration of a program. John Doe was calledinto work after a lay-off while William Roe believed his senioritygave him a better right to a prior call. Or, it is claimed that the wrong


man was promoted and the rights of a senior man were violated.Sometimes an outright clerical error has been made. Sometimes thereis a difference of interpretation about the seniority rules. They areamong the less difficult kinds of seniority cases because in decidingthem, the arbitrator's decision usually has no particular impact uponthe broad program for job allocation through seniority. If an arbi-trator decides that A's seniority entitled him to promotion instead ofB, no great fundamental principle is involved.

But consider some other cases which can arise under a seniorityclause. There may be claims of improper job assignment at a timeof a change in methods of operation or as a result of the merger oftwo departments or of the contraction of a department. People canlose seniority rights in a department made smaller and then go to an-other department to dilute the seniority rights of employees there.The manner in which such a case is handled might very well deter-mine whether an employee is kept on the job or gets laid off whenshort time operations ensue. Such cases go to the heart of the systemof job guarantees based upon seniority rights. When a methods changeor a technological change is made the resulting effect upon senioritysimilarly affects the structure of the job allocation program.

There is another kind of seniority case which ends up in arbitra-tion. The rules are clear, and everyone knows what they call for, butthe result is said to be "impossible to live with." Many arbitratorshave had those cases in which it is said, "Sure, sure, we know whatthe practice is, but we can't live with it." This is an example of inade-quate collective bargaining and this deficiency cannot usually be over-come in arbitration.

Then, recall the kind of seniority case which is of critical im-portance but the labor agreement is silent or obscure about how thecase should be handled. This kind of case arises when there is a majorunanticipated problem of job assignment which must be settled. Thelayoffs of 1954 provide a significant example of a situation out ofwhich these cases arise. Many agreements were entirely silent, or


inadequate in providing how seniority should operate in the event oflayoff.

When this seniority question is considered broadly, then, it ap-pears as a part of the problems faced by employees as a result of theirbeing subject to lay-off on short notice and because of the need fora system for allocating semi-skilled jobs of varying degrees of attrac-tiveness among those who are reasonably competent to perform them.The seniority approach is particularly useable as respects the greatmass of unskilled jobs in the mass production industries, which rep-resent a significant portion of the total jobs that are available infactories.

It is significant that the response of employees to the risk of lay-off without notice varies as between industries. The work-sharingprogram in the needle trades and the preservation of craft jurisdic-tional lines by craftsmen have a motivation which is comparable, inmany ways, to the seniority programs in the mass production in-dustries. The seniority question is also closely related to the problemof the guaranteed annual wage, because it too is a response to thedifficulties faced by employees through having their labor pur-chased retail.

Discussion—

JOHN A. HOGAN

University of New Hampshire

I should warn you at the outset that I am something of a ringerhere this afternoon, in more ways than one.

Harry Shulman could not make the discussion, so the job fell tome, and I assure you at this point I am sorry for you as well asmyself that he could not make it.

However, I have jotted down a few points and written a few para-graphs, necessarily out of my own particular experience and mythinking on seniority problems, and I will try not to take up too muchtime. I do not have a paper prepared to tackle the specific points of

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GEORGE W. TAYLOR - NAARB · GEORGE W. TAYLOR Wbarton School ... It formerly was the practice in the garment industry to share work throughout the day. ... tries, such as the needle