PROGRAM STRUCTURE

A brief description of the major elements of the program structure designed to accomplish the Service objectives is as follows:

1.

2.

Private Sector. Dispute mediation in the private sector is concerned with providing assistance, when needed, in connection with the negotiation or renegotiation of a collective bargaining contract. It is frequently referred to as "crisis" mediation. Usually the mediator does not enter the negotiations unless an impasse appears likely or has been reached and the possibility of a work stoppage is imminent.

Public Sector. Dispute mediation in the public sector divides into two parts; federal sector bargaining and non-federal sector bargaining.

In the federal sector, Executive Order 11491, as amended by Executive Order 11616, places responsibility on the Service for providing mediation and conciliation facilities to Federal agencies and labor organizations in the resolution of negotiation disputes. The Service has promulgated rules and regulations setting forth the manner and the circumstances under which mediation assistance and services will be available to the parties.

In the non-federal sector there is no clear charter for the Service to provide mediation assistance. Policy-wise the Service will provide mediation assistance in the non-federal sector only if the following criteria are met:

(a)

There is a joint request of the parties for the service.

(b) There is no functioning State or local
mediation agency available.

(c)

(d)

An impasse has been reached following intensive collective bargaining efforts.

Approval for mediation assistance is
given at the National FMCS level.

The Service continues to encourage local and state governments to develop their own dispute

B.

C.

D.

settlement mechanisms and legislation for the
Public Sector bargaining.

Preventive Activity

In both the private and public sectors the major
purpose of the Service's preventive activity is
dispute avoidance through the long-term improve-
ment of the labor-management relationship. The
technique is to encourage the parties to dis-
cuss their problems away from and without the
tensions of a strike deadline or a contract
expiration. Training forums are important ad-
juncts to the process. This continuous dialogue
and forum approach is a highly significant
development in labor-management relations as
a means for the parties to improve their working
relationships. The Service believes strongly
that preventive mediation is the best tool
available to minimize work stoppages.

Public Information and Education Activities

This is an important supporting function to the
total mediation effort. Typical activities
include mediator participation in labor rela-
tions conferences or forums, seminars co-sponsored
with universities, speeches before professional
groups, press relations, and other activities re-
lated to the collective bargaining and mediation
function.

Arbitration Services

The

This is a commonly accepted procedure used by
labor and management to solve problems that arise
out of the interpretation and implementation of
an existing agreement. It is usually the termi-
nal point of the grievance procedure contained
in the agreement; the acceptance by the parties
results in settlement of grievances and other
disputes without resort to work stoppages.
Service contributes to better labor-management
relations by making available to the parties,
panels of skilled arbitrators from which selec-
tions of individuals can be made by the parties
to hear and decide the issues in dispute. The
parties pay the arbitrator's fee and other re-
lated expenses. The Service has implemented an
automated arbitrator selection and reporting
system in Fiscal Year 1972.

IMPACT OF THE ECONOMIC STABILIZATION PROGRAM ON THE WORKLOAD
OF THE SERVICE

Past Highlights

It will be helpful to review briefly the effect of Phases I Initially, the parties did not and II on collective bargaining. Under Phase II there was

pay close heed to the wage-price freeze. a tendency for the parties in some situations, if the bargaining became too tough, to agree on an above-guideline settlement and The Nation continued to experience let the Pay Board cut it back. instances where strikes occurred despite the limitations placed upon bargaining results. Moreover, some strikes continued in effect even after formal requests were received that strike efforts be abandoned and negotiations be resumed under normal circumstances This disregard for the existence of the freeze order carried over in some measure during the initial period of the Pay Board. Phase II progressed, however, the trend was strongly developed to become acquainted with Pay Board regulations and to negotiate within the allowable tolerances.

Recent Highlights

As

The pattern of Phase III of the Economic Stabilization Program Present indications are that there will be has not fully emerged. a much greater degree of flexibility in the guidelines as well as a greater degree of voluntarism than in Phase II. Therefore, it The President can be anticipated that negotiations between companies and unions will become more difficult than in the past year. expects restraint from negotiators involved in bargaining this year The Cost of Living Council has publicly affirmed a "flexible" position with regard to the 5.5 percent guideline for wage increase Cost of Living spokesmen have stated and .7 percent for fringes. that they will evaluate closely each major settlement separately, on its merits.

Future Implications

It appears that in Phase III the decision-making process will The largely move back to the parties themselves. Companies and unions will be free to negotiate as long as they do not go too far. parties will find it more difficult to reach agreement with this Clearly, the expanded freedom than under more rigid controls. Administration's policies contemplate restraint from negotiators If labor and management representatives involved in bargaining. responsible for major and secondary negotiations do not act with restraint, there is a possibility that a more restrictive program of controls can be expected as a possible Phase IV.

Effect of Phase III on the Service's Workload

During the remainder of Fiscal Year 1973 and early Fiscal Year 1974, major negotiations will take place in rubber, electrical manufacturing, construction, trucking, auto, farm equipment, postal service, longshore, meat packing, and shipbuilding. Over five million workers will be affected by this bargaining.

Some union leaders have been indicating moderate restraint and discussing productivity. However, the big question unanswered at this time is "how the rank and file" will respond. Even if a moderating trend is established in the major negotiations, there is a strong likelihood that many secondary negotiations will require a great deal of attention from mediators. Without restraints on these smaller negotiations, patterns set in major contract bargaining will tend to provide targets for these secondary bargainers.

In any event, the self-enforcement structure of Phase III will likely produce tougher bargaining and more strikes. During this period following controls, unions will be focusing on "catch up" in areas they perceive having lost ground under Phases I and II.

Economic issues drawing primary attention from unions will be wages, improved pensions, removal of cost-of-living ceilings, better health benefits, and vacation improvements. Noneconomic areas include voluntary overtime, more protection against plant closings and sales, humanizing the work-place (making work more meaningful to the worker), and improved grievance machinery. Unions will be looking for more opportunity for participation in a large variety of decisions affecting the work-place.

Companies also will be pressing certain demands in the areas of increased productivity, flexibility in manpower management, and subcontracting. Generally, companies will also try to use Phase III as a reason for cheaper settlements. It can be anticipated that there will be an increasing need for and use of mediation. It can also be expected that the incidence of work stoppages will increase, and strike cases require more mediation than nonstrike situations according to labor history. Furthermore, FMCS experiences indicate that increasing incidence of stoppages stimulates the use of mediation by other negotiators seeking to find contract agreements without a strike. It can be anticipated that Phase III will be a busier period for the Federal Mediation and Conciliation Service than the months of Phase II.

In like manner, if economic controls are ended in some later phase, the Federal Mediation and Conciliation Service workload then can be expected to have an even greater increase.

SUMMARY OF FISCAL YEAR 1974 BUDGET ESTIMATE

The Service's work program for the budget year 1974 is a continuation and intensification of the mediation, preventive activities and arbitration services of recent years. Our efforts in Fiscal Year 1974 will continue to provide (1) prompt and efficient servicing of dispute situations in which labor and management are unable to reach agreement through their own efforts; (2) expansion of the Service's preventive activity as an important adjunct to its dispute mediation program; and (3) through its automated arbitration panel service, improved arbitration assistance in the resolution of grievances and other problems that arise out of the terms of existing collective bargaining agreements.

To meet our work program requirements a total appropriation of $10,960,000 is requested for the budget year. This is an increase of $314,000 over Fiscal Year 1973. Of this increase, $121,000 is for personnel compensation primarily for annualization costs of 1973 periodic step increases and for additional step increases and promotions anticipated during Fiscal Year 1974. The remaining increase of $193,000 is for other objects. This includes (1) an increase of $65,000 for personnel benefits, primarily for payment to the Bureau of Employees Compensation; (2) a net increase of $33,000 for communications costs to GSA, and for penalty mail costs; (3) $10,000 for renovation and alteration of office space and utility services; and (4) an increase of $85,000 for two educational and information films on the collective bargaining process in private and public sectors, for development and purchase of audio-visual sequences, and for purchase of new and replacement of old office furniture, fixtures, equipment and office machines.

The estimate for Fiscal Year 1974 will provide funds for a total of 431 permanent and ten part-time and temporary positions, the same number as for Fiscal Year 1973. The employment ceiling of 431 permanent positions in Fiscal Year 1974 will provide 68 positions for the National Office, and 363 for the field, of which 254 are for full-time non-supervisory mediators.