1. Types of Labor Disputes
2. Causes of Labor Disputes
3. How to Prevent Labor Disputes
4. Settlement of Labor Disputes

Updated July 13, 2020:

To define labor dispute requires a basic understanding of labor laws. A labor dispute is when a disagreement arises between two parties in an organization, usually the employer and the employee. The dispute usually involves disagreements around benefits, pay, conditions of employment, organizational procedures, and hours worked.

Labor disputes can lead to work strikes or lockouts. These are consequential for the employer, leading to a lack of production, profits, and even sometimes forcing the company to close its doors. Labor disputes are actually fairly common. They are not always between the employee and the employer. In some cases, labor disputes can arise between multiple managers or between multiple employees. Because of the frequency and dynamics of labor disputes, they have been routinely studied throughout history.

Labor disputes throughout history have resulted in changes to social, political, and legal policies. Many labor disputes arise from employers and employees having different perceptions or understandings of the role. It is important to identify and correct any labor disputes early on as they can eventually harm the company.

Types of Labor Disputes

Most labor disputes can be categorized into two different types:

  • Interest disputes: These are disputes that arise from disagreements in interests including pay, bonuses, vacation time, and so forth.
  • Rights disputes: These are disputes that arise from work standards expectations including fair wages, working conditions, and available opportunities.

Causes of Labor Disputes

It is important to evaluate the cause of a labor dispute in order to correct it. These are some of the most common causes of labor disputes:

Economic Causes

  • Compensation.
  • Bonus expectations.
  • Current working conditions.

Managerial Causes

  • Job security concerns.
  • Nonrecognition of unions.
  • Differences in leadership styles.
  • Communication problems.

Political/Legal Causes

  • Interference from legal influences.
  • Unapproved political changes.
  • Union problems.

Psychological Causes

  • Differences in motivation.
  • Lack of appreciation.
  • Problem with authority.
  • Feelings of being treated unfairly.

One of the biggest causes of labor dispute involves disagreements in pay expectations. Compensation is the perceived value of an employee's labor. The organization and the employee may have different expectations or evaluations of compensation, often leading to labor disputes.

Poor working conditions are another common cause of labor disputes. If employees are not satisfied with the work environment, it can lead to labor disputes. Additionally, there are other concerns that can come up like access to things like parking, break rooms, or incentives. There may also be power struggles between employees in different roles.

In summary, there are many causes of labor disputes. When employees or managers have a problem, it needs to be solved as soon as possible. Otherwise, the organization runs the risk of a labor dispute.

How to Prevent Labor Disputes

It is also a good idea to prevent labor disputes, when possible. The following tips can help you avoid costly and inconvenient labor disputes:

  • Carefully evaluate wages and salaries. Make sure they are in line with current market trends and follow inflation patterns.
  • Provide a clean, furnished, and well-equipped working station.
  • Ensure all employees and managers perform their expected job duties.
  • Motivate employees with direction and opportunities.
  • Turn unions away from politics.
  • Encourage managers to have a positive attitude toward employees.

Settlement of Labor Disputes

Sometimes despite all efforts to prevent labor disputes, they still happen. Address labor disputes as soon as possible. Use the following methods to address labor disputes:

  • Collective bargaining: Employees and management discuss the current problems and possible solutions.
  • Grievance handling: Taking steps toward fixing problems within the organizational structure.
  • Conciliation: Allowing a third-party to facilitate the necessary discussion to evaluate current grievances and possible solutions.
  • Mediation: Similar to conciliation except that the third-party gives actual solutions to the labor dispute.
  • Adjudication: A final legal remedy to solve a labor dispute. The organization allows the government to make the final solution.

Labor disputes are problematic for an organization. They reduce employee motivation and productivity. If they go on for too long, the organization can lose a significant amount of money. It is also possible that the organization could be forced to close their doors and shut down business for good. It is important to identify and then address any labor disputes immediately.

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