Chapter 15

• Trade Union is a pressure group of workers who have joined together to ensure their interests are protected
• It is a type of pressure group

Types of Trade Unions

Advantages of Being in a Trade Union

• Strength in numbers
• Improved conditions of employment
• Improved working environment
• Improved benefits for members who are no longer working
• Improved job satisfaction
• Advice and financial support
• Closed shop employment
• Puts forward their views to media and influence government decisions
• Improve communications between workers and management

Closed Shop

• Union members feel that it is unfair if non-union members gain from their negotiations and bargaining
• Therefore they suggest closed shop employment where everyone must belong to the same trade union
• Non-union members argue that it is unfair that they are being forced to join a particular trade union

Single-Union Agreements

• Firms decide to deal with only one trade union
• Clearer discussions
• Employees have greater power as everyone is in one trade union
• No disagreements between different unions
• Better working relationships between management and union
• Disputes solved faster
• Easier to agree to changes in working conditions
• Less waste of time
• Fewer industrial disputes

Structure of a Trade Union

• President/General Secretary will be elected and will work fulltime and be paid for by the trade union
• Each branch will have its own representatives who are elected by the members
• The Shop Steward is an unpaid representative of a trade union

Determinants of Union Strength

• The percentage of employees who are members (union density)
• Degree of public support
• Management attitude
• Legal environment
• Ability of management to find alternative labor
• Union and management resources

Employer Associations

• Groups of employers who join together to give benefits to their members
• Represent employers and negotiate with the trade unions
• Give advice to their members
• Act as a pressure group
• Greater strength
• Put forward arguments to government
• Share ideas and help each other
• Organize bulk buying, discounts on goods purchased

Employer Associations Demands to Government

• Keep control of the economy in terms of inflation
• Provide law and order, health, education etc.
• Taxation to not be a burden
• Rules and regulations should be lenient
• Fair competition
• Good transport infrastructure

Collective Bargaining

• Negotiation is another name for collective bargaining. It is when there is joint-decision making involving bargaining between representatives of the management and of the workforce within a firm with the aim to arrive at a mutually acceptable agreement.
• Collective Bargaining is negotiations between one or more trade unions and one or more employers on pay and conditions of employment.
• They usually argue for better working conditions and wage increase
• They may argue about:
  Inflation levels
  Difficulty faced in recruiting qualified workers
  Pay differentials need to be maintained
  Changes in workplace
  Workers should get a fair share of productivity increase

• A Productivity Agreement is where workers and management agree on increase in benefits, in return for an increase in productivity

Industrial Action

• Action taken by the trade unions to decrease or halt production
• Strike action (refusal to work)

• Picketing: when employees who are taking industrial action stand outside their workplace to prevent or protest at the delivery of goods, arrival and departure of other workers etc.
• Work to rule: when rules are strictly obeyed so that work goes slower
• Go slow: employees do their normal tasks but more slowly than usual
• Non-cooperation: when employees refuse to comply with the new working practices
• Overtime ban: when employees refuse to work longer than normal working hours

Costs of Industrial Action

For employers:

• Loss of output
• Poor reputation
• Cash-flow problems
• Loss of income
• Loss of labor
• Loss of profits
• Loss of customers

For employees:

• Loss of wages
• Threat to jobs

For firm’s customers:

• Loss of income
• Not able to produce goods
• Shortage of products
• Finding alternative suppliers takes time and money

For economy:

• Workers have less money to spend
• Less tax revenue for government
• Bad reputation for country
• Incomes fall
• Exports lost
• Unemployment benefit burden increases

Control Industrial Action

• No-strikes agreement is reached when trade unions and management agree to have pay disputes settled by an independent arbitrator instead of strike action
• An arbitrator listens to both sides of the industrial dispute and then gives a ruling on what they think is fair to both sides, this may be taken to the industrial court as well
• Employers may:
  Dismiss workers
  Lockout employees
  Freeze their pay

• All forms of industrial action are designed to put pressure on one party in the negotiation to give in to the demand of the other party
• Successful negotiations usually involve a compromise on both sides

Conflicts in Business Organizations

• Poor wage rates, poor conditions of employment, poor working conditions
• Rigid and authoritarian management
• Rapid and poorly planned change in business leaving employees feeling downgraded
• Lack of involvement in the decision making process
• Decline in business’s market share

Consultation

• Employees’ views are asked for before taking a decision
• Managers do not usually seek the formal agreement of the employees
• They just simply ask for their views and may or may not take these into account in making the decision

Worker Participation

• Employees contribute to decision making in the business
• Worker directors can be appointed
• Worker councils can be established when committees of workers are consulted or informed on matters that affect employees
• Quality circles encourage continuous improvement in the product by working in teams, meeting regularly to discuss improvements
• Democratic styles of leadership can be adapted

Advantages:

• Increases flow of information
• Improves relations between employee and employer
• Increases motivation
• Makes use of the knowledge and expertise of the employees

Disadvantages:

• Time-consuming
• Workers may lack technical knowledge
• Non-union members will lose out
• Conflict of interests

Major UK Organizations Involved in Industrial Relations

• Trade Union Congress (TUC):
  In some countries, trade unions get together to form a single group to represent trade union aims in general
  In the UK, it is called the Trade Union Congress which has full-time employees, administrators, economists, solicitors.
  They meet at regular intervals and are more powerful than a single trade union

• Confederation of British Industry (CBI):
  Represents many UK industries

• Advisory, Conciliation and Arbitration Services:
  Special organization whose job it is to help an agreement to be reached when negotiations in industrial disputes break down
  Independent body which is financed by the government
  Provides free services
  Impartial