The Role of Trade Unions

Question 1

Define

trade union

Answer 1

Also known as a labour union, a trade union is an association representing employees in a particular workplace or industry with the aim of improving their pay and working conditions through negotiations with employers.

Question 2

List the functions of trade unions

Answer 2

• negotiating improvements in wages and non-wage benefits with employers
• defending employees’ rights and jobs
• improving working conditions, such as securing better hours of work and better health and safety policies
• improving pay and other benefits, including holiday entitlement, sick pay and pensions
• encouraging firms to increase workers’ participation in business decision making
• supporting members who have been dismissed or who are taking industrial action
• developing the skills of union members, by providing training and education courses
• providing social and recreational amenities for their members
• influencing government policy and employment legislation

Question 3

List and describe the four main types of trade unions

Answer 3

1. General union
   
   • represents workers from many different occupations and industries
2. Industrial union
   
   • represents workers in the same industry
3. Craft union
   
   • represents workers with the same skills across several industries
4. Non-manual union and professional association
   
   • sometimes called white-collar unions
   • respresents workers in non-industrial and professional occupations

Question 4

How are trade unions organised?

Answer 4

1. General secretary
2. National executive
3. District committee
4. Brach
5. Shop stewards
6. Members

Each year a union will usually hold an AGM where delegated members and shop stewards from different workplaces can attend to discuss common issues with the union’s national executive and vote on union policies.

Question 5

Why is union membership generally falling in developed economies?

Answer 5

• decline in manufacturing sector
• growth of service sector (union membership in services tends to be lower)
• decline in the size of the public sector in many former planned economies in Eastern Europe (unions tend to be much stronger in the public sector)

Question 6

Define

collective bargaining

Answer 6

The process of negotiating pay and working conditions between trade union representatives and employers.

Question 7

Trade unions will often argue for improved wages and other working conditions if…?

Answer 7

• price inflation is high and rising
• other groups of workers have received pay rises
• new machinery or working practices have been introduced in the workplace
• the labour productivity of their members has increased
• the profits of the employing organisation have increased

Question 8

What are the three types of union representation in the workplace?

Answer 8

1. Closed shop
   
   • trade union memberhip is made a compulsory condition of taking a job in an organisation
   • outlawed in many countries because it gives a union too much power
2. Open shop
   
   • a firm can employ both unionised and non-unionised labour
3. Single union agreement
   
   • an employer agrees to a single union representing all its employees

Question 9

What are the advantages to an employer of having a single union agreement?

Answer 9

• time is saved by negotiating with only one union
• avoids disgreements arising between different unions
• easier to implement changes in working practices through one union
• a closer working relationship with the union should develop and help to reduce industrial disputes

However, a single union agreement gives the trade union significant bargaining power. Therefore, most firms will only agree to single union representation if the trade union agrees to certain commitments.

Question 10

When will a trade union be in a strong bargaining position to negotiate higher wages and better conditions?

Answer 10

• the union represents most or all of the workers in that firm or industry
• union members provide essential products for which there are few close substitutes
• the union is able to support its members financially during strike action to compensate them for their loss of earnings

Weak bargaining position: opposite from above conditions, and laws outlaw or severely restrict union activity

Question 11

Define

industrial action

Answer 11

Disruptive activities, such as a strike or work to rule, that workers carry out to strengthen their bargaining position regarding demands for improved wage and working conditions, or to address other grievances.

Official action has the backing of the trade union, unofficial action does not.

Question 12

Describe four types of industrial action

Answer 12

1. Overtime ban
   
   • workers refuse to work more than normal hours
2. Work to rule
   
   • workers deliberately slow down production by complying rigidly with every rule and regulation
3. Go-slow
   
   • workers carry out tasks deliberately slowly to reduce production
4. Strike
   
   • workers refuse to work
   • may also protest or picket outside their workplace to stop deliveries or non-unionised workers from entering

Question 13

What are the negative effects of workers taking industrial action?

Answer 13

• Businesses suffer higher costs and lose output, and may lose big and regular customers to rival firms.
• Union members may lose wages during a strike and even lose their jobs if employers cut back demand for labor.
• Consumers may be unable to obtain the goods/services they need and may have to pay higher prices if firms pass on their increased costs.
• Reputation of an economy as a good place for business may be damaged. Firms may decide to set up businesses elsewhere, increasing unemployment and lower incomes.

Question 14

What is arbitration?

Answer 14

Arbitration may be necessary to settle industrial disputes. This involves employers and unions agreeing to let an independent referee, often a senior government official or lawyer, to help them reach an agreement or compromise.

Question 15

What are the possible advantages of having trade unions?

Answer 15

• Could help to bring about minimum working standards
• Could help keep pay higher
• Could help maintain employment/enhanced job security
• Could lead to improvement in health and safety.

(Taken from Zubair’s notes)

Question 16

What are the possible disadvantages of having trade unions?

Answer 16

• Might cause lack of flexibility in working practices
• Could be major problem as fashions change very quickly
• Could lead to some firms going out of business
• Workers made redundant
• Workers will need to pay union membership fees.

(Taken from Zubair’s notes)