In This Section of Work You Will Learn About the Following Concepts

BISHOPS GRADE 9 EMS

TRADE UNIONS

AND

INDUSTRIAL RELATIONS

In this section of work you will learn about the following concepts…

What is a Trade Union?
The functions of trade unions
Types of Trade Unions
Union Membership
Industrial Disputes
Why do industrial disputes occur?
Industrial action

What is a Trade Union?

Many workers belong to labour unions or trade unions. Trade unions exist primarily to promote and protect the interests of their members with the purpose of improving their wages and working conditions. In return, members will often pay a small fee to belong to a union.

Trade unions first developed in countries such as the UK during the industrial revolution in the eighteenth and nineteenth centuries with the development of factories and mass production using machinery. During this time the structure of the UK and other western economies changed rapidly from ones based on farming and craft industries, to industrialized economies in which manufacturing industries produced most of the total output and provided most of the jobs. Work in factories was often poorly paid and undertaken in appalling conditions. Workers began to organize themselves into unions to challenge the owners of factories to improve their conditions.

Exercise 1: Why I'm part of the Union!

From the articles on the previous page, what do you think are the aims of trade unions?
What possible benefits or problems could arise in a firm where trade union membership among their workforce is high?
Would you join a trade union? What are the possible costs and benefits of membership?

The functions of trade unions

Trade unions have a number of aims regarding the welfare of their members. These include:

defending their employee rights and jobs
securing improvements in their working conditions, including hours of work and health and safety at work
improving their pay and other benefits, including holiday entitlements
improving sick pay, pensions and industrial injury benefits
encouraging firms to increase worker participation in business decision-making
developing and protecting the skills of union members

Before trade unions existed, a worker had to negotiate on his or her own for increased pay and better working conditions with an employer. With few rights, a worker could face being fired. Trade unions, however, can negotiate with, and put pressure on, employers on behalf of all their members to secure these aims. Trade unions helped redress the balance of power employers had over their workforces.

However, in some countries, unions may not have the legal right to represent workers, or this right may not be recognized by some employers and governments. In some countries, unions are even outlawed and union officials can be jailed.

In other countries unions are closely aligned with political parties and use their power to secure social policies and laws that are favourable to their members or to workers in general.

In addition, many trade unions offer their members education and training to improve their skills, and provide their members with recreational amenities including social clubs. Unions may also support the incomes of members who are on strike.

Types of Trade Unions

Trade unions are often grouped into four main types.

General unions represent workers from many different occupations and industries.For example, Amicus in the UK represents all sorts of clerical, manufacturing, transport and commercial workers in both the public and private sector.

Industrial unions represent workers in the same industry, e.g., the Turkish Union of DefenceWorkers , National Union of Mineworkers in South Africa (NUM) and the Overseas Telecommunications Services Employees Association of Mauritius (OTSEA).

Craft unions are often small and relatively few in number today. They usually represent workers with the same skills across several industries, such as the Union of Operators and Technicians in Cinema and Video Projection in Spain and the United Brotherhood of Carpenters and Joiners of America.
Non-manual unions and professional associations, sometimes called white-collar unions, represent workers in non-industrial and professional occupations, such as the Association of Iranian Journalists (AOIJ), All India Bank Officer Association (AIBOC), German Police Union (GDL) and the National Union of Teachers (NUT) in the UK.

Union Membership

Union membership in some countries has been rising while others have experienced falling membership. For example, between 1993 and 2003 union membership increased in Belgium, Ireland, Italy, Luxembourg, Malta, Spain, Norway and Cyprus. In contrast, union membership fell significantly in the US, Germany and the UK, and in a number of Eastern European countries including Bulgaria, Estonia and Latvia. In the US union membership fell from a peak of 22.5 million workers in 1975 to just under 16 million workers in 2005, around 12 per cent of the total US workforce.

The decline in the number and membership of unions in many western countries is often attributed to the decline in manufacturingindustry and the growth of the service sector in these countries. For example, in the UK around 80 per cent of the total workforce is employed in service industries. Union membership in services tends to be lower than in manufacturing industries. Men are also more likely than women to be union members, but in some western countries the number of women union members is growing. Unions also tend to be much stronger in the public sector than the private sector. The decline in the size of the public sector in many former planned economies in Eastern Europe may help to explain falling union membership in some of these countries.

Industrial Disputes

An industrial dispute is a dispute between employers and employees. One of the ways in which these disputes are resolved is through collective bargaining.

Collective bargaining: the process of negotiating over pay and working conditions between trade unions and employers.

Depending on how collective bargaining is organized these negotiations can determine the pay and conditions for all workers in all firms in a particular industry in the economy, or they reach local area agreements between individual firms and their workforces.

Unions and employers will also negotiate about redundancies, pension rights, holiday entitlements, training and the introduction of new technology and working practices.

How collective bargaining is organized will largely depend on the relationship between a union and firms that employ unionized labour:

In an open shopa firm can employ unionized and non-unionized labour.
In a closed shopall workers in a place of work have to be union members. The closed shop is outlawed in some countries because it gave unions too much power to dictate who a firm could employ. A union could also call the entire workforce in a firm, or even an industry, out on strike. In these ways a union may act like a monopoly and restrict the supply of labour so as to force up the market wage for a job or occupation (see Chapter 8).
Alternatively a firm may agree a single union agreement. This means one union can represent all the workers, whatever their occupation, in the same workplace. This is usually in return for certain commitments from the union on pay and productivity levels, and for agreeing not to take strike action. Negotiating with a single union rather than several at a time is much easier for a firm

Why do industrial disputes occur?

Collective bargaining between trade unions and employers can sometimes fail to reach an agreement. For example, if a union demands a wage increase for its members notmatched by higher productivity, then production costs will rise. Firms will either face trying to pass on higher wage costs to consumers in higher prices or the profits of the owners of the firm will be reduced. Demand for more holidays, better pensions and sick pay, and resistance to new working practices, will also tend to raise costs and could mean that a firm becomes uncompetitive. As a result a firm may try to reduce its costs by reducing its demand for labour and making some workers unemployed.

Disputes over demarcation can also arise. These occur when a union insists that its members can only carry out certain jobs and will not take on new tasks, or when a firm employs non-union members to carry out the same or similar tasks instead.

Industrial action

When negotiations fail, trade unions may take industrial action to put pressure on their employers. Official actionmeans it has the backing of the union, and other unions may also take action in support. Unofficial actionmeans that workers taking industrial action do not have the support of their union.

Methods of industrial action include…

Overtime ban - when workers refuse to work more than their normal hours.
Work-to-rule - when workers comply with every rule and regulation at work in order to slow down production.
Go-slow - working deliberately slowly.
Sit-in - when workers refuse to leave their place of work, often in an attempt to stop a firm installing new machinery or closing down.
Strike - when workers refuse to work and will often protest, or picket, outside their place of work to stop deliveries and non-unionized workers entering the firm.

In many countries, recent government legislation has severely weakened trade union power to take industrial action. For example, an employer can now sue a union for lost profits if industrial action is taken without a ballot of workers. Mass picketing is also unlawful. Only a handful of strikers are allowed to picket outside their workplace.

Arbitration may be necessary to settle some disputes if collective bargaining fails and industrial action is threatened or takes place. This involves employers and unions agreeing to let an independent ‘referee’ help them reach an agreement.

EXERCISE 2- A tough negotiation

In groups of four, act out the following roles in an industrial dispute between an employer and a trade union. Your job is to try to find a settlement which both sides in the dispute are willing to accept. The roles in the dispute are…

Union representativesEmployee representatives

The shop steward Managing Director

A machine operatorThe work study engineer