PLAI

Labor Law

Management Prerogative to Implement Job Evaluation Programs practice question

ABC Bank unilaterally implemented a new job evaluation program (JEP) that lowered the starting salaries for future employees, while granting salary increases to current rank-and-file staff. The Bank did not consult the ABC Bank Employees Union before implementing the JEP, but claimed it was acting in accordance with the collective bargaining agreement (CBA), which required a job evaluation during the CBA's lifetime. The Union objected, arguing that the JEP violated the CBA's non-diminution clause and that setting salaries for future employees should be subject to collective bargaining. The Bank insisted that fixing salaries for future hires is a management prerogative, provided no existing benefits are reduced. The Union filed a complaint for unfair labor practice, claiming the Bank's unilateral implementation of the JEP was unlawful. Is the Bank's unilateral implementation of the JEP, which lowers starting salaries for future employees but does not diminish current employees' benefits, a valid exercise of management prerogative? Explain.