The Impact of Mergers and Acquisitions on Labor Relations or Collective Bargaining (Essay Sample)

The Impact of Mergers and Acquisitions on Labor Relations or Collective Bargaining
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The Impact of Mergers and Acquisitions on Labor Relations or Collective Bargaining
As companies and organizations merge and swallow each other in the international markets, the business philosophy of the new enterprise may vary from the status quo. Sometimes during mergers or acquisitions, executive decisions have to be made because of employee welfare (Abodeely, Hammer & Sandler, 1981).  In certain instances, the new managerial team may decide to reduce the number of staff or restructure the new entity. This is frequent in cases of acquisitions, where tough decisions have to be made concerning the future of the company. Employees may sometimes be caught in this process and could be materially affected by these decisions. It is thus critical to examine the issues that relate to employee welfare during the process of mergers and acquisitions. As if sometimes the case, some employee could end up being retrenched on the basis of redundancy or incompetence. Others may end up being promoted while others demoted or reassigned. This essay will examine some of the issues that affect labor and collective bargaining during the process of mergers and/or acquisitions.
In the international market, it is essential that issues relating to employee relations and their welfare be ironed out well during the process of mergers and acquisitions. For instance, the parties involved should be careful to ensure that the employment law provisions relating to acquisitions and mergers have been respected. Additionally, both parties should establish modalities in which any existing collective bargaining rules will be given expression in the new structure.
Ideally, most laws governing mergers and acquisitions require that at least some of the employees likely to be affected be informed of their existing and future positions and any decisions relating to their welfare be made with their participation or that of their union leaders (Edwards & Edwards, 2014). Sometimes, elections on the issues contained in the CBA may be held. The fundamental law in America is that an employer may, through the doctrine of accretion, add a small number of employees to an existing CBA without requiring their electoral consent if they are proven to be small. If the employees outnumber the current members under the CBA, then their union representatives must be involved. Further, contractual provisions and statute law will be resorted to by the National Labor Relations Board if called upon to determine the situation of employees under a new CBA.
In the case of Martin Marieta Chemicals, it was established by the court that in the situation where the two unions were involved in negotiations over a CBA and seemed to have equal representation, but are represented by different unions, elections will be ordered on the issue of the new terms of the CBA. The doctrine of accretion ceases to apply. On the status of the employment contract in the case of a merger or acquisition, it is stated that the National Labor Relations Board (NLRB) has the authority under the law to determine the present situation of the employment contracts in case of a disagreement. However, the Board has been reluctant in making decisions relating to the status of an employment contract. The liability for certain wrongful acts (labor malpractices) of the previous employer may be borne by the successor of an enterprise in particular circumstances. The fact that the contractual obligations of the predecessor have been extinguished before the consummation of the merger is no bar to the successor to sue for the predecessor to assume liability for certain acts.
Mergers sometimes render some employees redundant or surplus to the needs of the successive management in an organization after a merger or acquisition (Arrowsmith & Marginson, 2006). For instance, during Microsoft’s acquisition of the handset department of Nokia, it was announced that Microsoft was planning to cut jobs in Nokia (Alimov, 2015). All these affect employees and must be ironed out before a merger is completed. It is important that the status of each and every employee be established in the new regime. It is critical that negotiations be concluded between all affected parties such that each and v...