TRADE UNIONS

MEANING:
Trade union is an organization which aims to protect the interests of its worker members
that is their terms and conditions of employment, including pay.
A trade union also known as a Labour union is an organization which exists to protect the
rights of workers. Trade unions originated in the 19th century in the UK and the USA.
Workers often worked in a very poor conditions so trade unions were created to bargain for
better terms and working environment for their members.
A worker become a member of a trade union by paying a subscription fee usually on your
basis. The membership fees help to pay for the administrative and legal expenses of
operating the trade union.
Employees (workers) and employers often have different aims and objectives. for example
In addition to make a happy and well- motivated workforce employers may want to :
 maximize profits
 minimize costs
 maximize sales
On the other hand, employees may want to:
 maximize wages for salaries
 work in a safe and healthy environment
 have good terms and conditions at work
 maximize their non-wage benefits
 have job security at work

there is often a conflict between the aims of employees and employers.

for example and increase in wages along with the decrease in working hours will increase
costs to employers improve the terms of employment for workers.

TYPES OF TRADE UNION

There are several types of trade unions :

 Craft unions : These are the oldest type of trade union and were formed originally to
organise workers according to their particular skill or crafts. for example engineers
and printers formed their own separate union as did carpenters plasterers and
electricians.
 industrial unions : these trade unions represent all workers in there industry
irrespective of their skill or the type of work done. For example an oil Workers Union
will include workers involved in the exploration, extraction, storage and refining of
oil, and any other jobs associated with the oil industry. United Automobile Workers
union of the United States is an example or industrial.
 White colour unions : these Labour recruit professionals, administrative and clerical
staff (salaried workers) and other non-manual workers equities they're Commerce
teaching banking the civil service and local government.
 General union : these trade unions are usually prepared to accept anyone regardless
of the place they work the nature of their work or their industrial qualifications. the
tend to have a very large membership of unskilled workers. Unite is a very large
general union in the UK. its members include drivers warehouse workers hotel
 employees and shop workers. The Australian Workers Union is the largest general
union in Australia.

THE ROLE OF TRADE UNIONS IN THE ECONOMY

The primary role of a trade union is to protect the interests of its members.
Examples of trade union roles and responsibilities are:
 Bargaining with employers for pay rises and better terms and conditions
 Ensuring equipment at work is safe to use (supported by health and safety legislation) and
that workers are given sufficient training to enable them to perform their own at work
safely.
 Ensuring members are given legal advice when necessary.
 Giving support to members when they are made redundant.
 Providing financial support to workers who may have been Unfairly dismissed or
disciplined.
 Persuading the government to pass legislation in favour of workers, such as legislation
covering minimum wages, maximum working hours, pension rights and the retirement
age.

COLLECTIVE BARGAINING : Trade unions act as a means of communication and negotiation

between employer and employees through a process called collective bargaining. This occurs
when a trade union representative, who is voted into the position by union members, negotiates
on behalf of the workers for better pay and condition of work. A collective voice is more powerful
than each worker negotiating individually with the employer.

Trade unions with high membership tend to be more powerful than unions with the small number
of members. If strong trade unions make full use of their bargaining power, they may succeed in
getting larger and /or more frequent wage increase than weaker trade unions. This highlights the
importance of ‘unionization’ with the trade unions that is the larger and more united the union the
better its bargaining position tends to be.

Unions may be affiliated to a large organization which negotiates with the government, such as the
trade union Congress (TUC) in the UK, and the American Federation of Labour and Congress of
industrial organization in the USA. these organizations push for the legal protection of rights for
workers, including the Imposition of a national minimum wage, or an increase in its level.

COLLECTIVE BARGAINING AND WAGE CLAIM :

The claim for higher wages in the collective bargaining process is normally based on one or more
of the following :
 A rise in the cost of living due to inflation which reduces the real wage of trade union
members.
 workers in comparable occupations who have received a wage increase.
 increased profits of the firm and industry as a whole, justifying a higher return for Labour
services.
 an increase in the productivity of Labour, futher justifying an increase in wages.
 INDUSTRIAL ACTION :

as part of the collective bargaining process especially if there are disputes with employer
representatives, Trade unions can call upon their members to take industrial action.

industrial action refers to measures taken by trade union members as a result of major
disagreements or disputes with their employers. Example: strike action.

INDUSTRIAL DEFINITION IMPACT ON EMPLOYERS IMPACT ON WORKERS

ACTION
Strike Trade union members refuse Output of goods and services workers do not get paid
to work, that is they stop ceases, creating an instant and when /if they do not work,
working. negative impact on the firm so lose wages/salaries.

Work- to -rule Trade union members work
to fulfil the minimum
requirements of their
job, literally and do not
go beyond what is
written in their
employment contracts.
Go-slow Trade union members
complete their work very
slowly
Sit- in trade union members turn
up to work and occupy the
premises but do not
undertake their normal
work
Bus drivers drive extremely Bus drivers and teachers
slowly and stop at every bus stop are meeting their
regardless of whether there are contractual responsibilities
any passengers who missed to and therefore cannot be
get on or off. a school teacher disciplined or sacked.
does not take part in any extra-
curricular activities or refuses to
meet with the students outside
of lesson time.
productivity and efficiency fallMorale me draw as a result
of low targets and
productivity.
production of goods and A loss in wages and, its
services ceases temporarily and sustained, falling standards
this has an immediate impact on of living.
the firm.

FACTORS INFLUENCING THE STRENGTH OF TRADE UNIONS :

The 2 main factors affecting the strength of trade union are the number of members and the
degree of their unity.
Trade union membership is growing in some countries such as China. in others such as the UK
union membership is declining. possible reasons for a higher level of trade union membership in
some countries are :

 growth in manufacturing jobs in these countries - manufacturing industry is often

unionised as workers typically receive low pay and have poor working conditions.
 A widening wealth gap and higher cost of living which have cost workers too petition for
higher wages and better working conditions.
 Possible reasons for declining trade union membership in other countries include :
 government legislation which seeks to reduce trade union influence.
 a decline in manufacturing jobs in these countries, as manufacturing is traditionally
unionised
 growth in part time employment, as part time workers are less likely to join a trade union
 a growing number of forms in dependently a green to fairer terms and conditions of
employment, As part of their corporate social responsibility, Without negotiating with
trade unions
 an increase in unemployment
 an increase in employment in small firms as it is more difficult to organise trade unions
within such organization
 an increase in the number of self- employed people ( people who work for themselves and
not for a firm ) and who are there for not trade union members.

ADVANTAGES AND DISADVANTAGES OF TRADE UNION MEMBERSHIP

Trade union often plays a positive role in an economy for several reasons :

 They act as a channel of communication between employers (firms) and employees

(workers). through negotiation and collective bargaining It helps to solve disputes and
settle pay claims harmoniously and effectively.
 They negotiate with employers on behalf of their members for better pay and working
conditions. this benefits the government as productivity also increases. Overall, there is a
positive impact on standard of living.
 Then negotiate with the government for the introduction or for an increase in the
minimum wage, which can also help to increase standard of living. increased pay and
improvements in working condition will lead to a better motivated workforce and result
in an increase in the profit of the firms.
 Unions can help to reduce conflict and develop improved industrial relationship which
ultimately benefits firms through improved Labour productivity and higher employee
motivation and loyalty.
 They offer legal support send advice to workers home we have lost their jobs.

The potential negative impacts of trade unions on an economy include the following :
 Trade unions are often portrayed in the media as having a negative role in an economy
when they take industrial action which may result in lost productivity. Strikes are the most
extreme form of industrial action and can cause serious disruption to firms and the wider
economy.
 From an employer’s point of view, a trade union demand for better pay and condition for
its members increase the forms production cost and therefore reducers profits. if so,
government tax revenue will also fall.

CHAPTER REVIEW QUESTIONS :

1. What does meant by a trade union ?
2. Why might a worker join a trade union?
3. How do the aims and objectives of employees differ from those of employers ?
4. What are the main types of trade union ?
5. What are the main rules of trade unions ?
6. What is meant by the collective bargaining process ?
7. What is meant by industrial action and why might it occur ?
8. What are the different types of industrial action ?
9. What factors influence the strength of trade unions ?
10. What are the advantages and disadvantages of trade unions ?