Advance notice and severance pay provisions in contracts

Monthly Labor Review

Volumn 119, Issue 7, 1996, Pages 43-50

  Pita, Cristina ^a  

^a UNIVERSITY OF SALAMANCA   (Spain)

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[No Author keywords available]

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EID: 1542572635     PISSN: 00981818     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (14)

1. See Characteristics of Major Collective Bargaining agreements Covering 1,000 Workers or More (Washington, Bureau of Labor Statistics), various issues.
2. Collective Bargaining Negotiations and Contracts (Washington, Bureau of National Affairs, Inc.), various issues.
3. Characteristics of Major Private Sector Collective Bargaining Agreements (Cleveland, OH, Cleveland State University, Industrial Relations Center, May 1989).
4. The sample was derived from a list of plants whose collective bargaining agreements were in the BLS files and a list of firms from the Compustat dataset. The two lists were merged by selecting the plants belonging to firms which appeared of the Compustat data base. These amounted to 279 plants, or, in more precise terms, plant-union bargaining pairs. From the 279 plants, all of the contracts signed were surveyed. During the 1970-90 period (inclusive), the number of contracts signed by the 279 plants was 1,552.
5. The plants included in this sample belong to publicly-owned firms. The main reason to consider only publicly-owned firms was the availability of data on these firm's financial accounts from Standard and Poor's Compustat data base.
6. See Standard Industrial Classification Manual (Washington, Office of Management and Budget, 1987).
7. 2), the number of day's notice is greater or equal to the number of day's pay. This suggests either that the workers value receiving severance pay more than notification days or that it is more costly for firms to offer severance pay than advance notice.
8. For this analysis, a contract provides "any type of notice" if it contains at least one of the following provisions: advance notice for plant closings, advance notice for individual layoffs, required notice of closings or layoffs to the union, or that advance notice should be provided as soon as possible.
9. "Any type of severance pay" means that the contract sets a specific lump-sum severance payment or the plant offers a supplemental unemployment benefit plan.
10. Wages and any other monetary compensation are subject to change from one contract to the next. For a complete description of the evolution in monetary compensation from 1975 to 1988, see Linda Bell, "Union Concessions in the 1980s," Federal Reserve Board of New York Quarterly Review, Summer 1989; and Linda Bell and David Neumark, "Lump-sums, Profit Sharing, and Labor Costs in the Union Sector," Working Paper No. 3630 (Cambridge, MA, National Bureau of Economic Research, Inc. February 1991).
11. Wages and any other monetary compensation are subject to change from one contract to the next. For a complete description of the evolution in monetary compensation from 1975 to 1988, see Linda Bell, "Union Concessions in the 1980s," Federal Reserve Board of New York Quarterly Review, Summer 1989; and Linda Bell and David Neumark, "Lump-sums, Profit Sharing, and Labor Costs in the Union Sector," Working Paper No. 3630 (Cambridge, MA, National Bureau of Economic Research, Inc. February 1991).
12. Barry Bluestone, Harrison Bennett, and Alan Clayton-Matthews, "Structure vs. Cycle in U.S. Manufacturing Job Growth," Industrial Relations, Spring 1986, 101-17.
13. See Standard Industrial Classification Manual.
14. To establish a connection between sales and employment, one can assume that when sales have a high variance (and hence, a high standard deviation), employment also shows a large variation. Therefore, the higher the standard deviation in sales, the larger the level of hiring and layoffs. In fact, on average, the standard deviation of the sales value for all of the firms in the sample is almost three times higher than the average standard deviation of the sales value of the firms in the printing groups. Within the printing group, sales seem to be relatively more stable than in other industry group; this means that firms seldomly lay off workers, and thus are more willing to provide advance notice and severance pay in these rare situations.