BISHOPS GRADE 9 EMS
In this section of work you will learn about the following concepts…
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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
© Bishops EMS Department
Page 1
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!
Pirelli Tyres workers vote to strike over pay
Workers at Pirelli Tyres have today voted
overwhelmingly in favour of industrial
action in a dispute over pay, the Transport
and General Workers’ Union said. More
than 900 workers were balloted after
rejecting the company’s final pay offer of
2.2%, and union shop stewards will be
meeting this week to decide what action
to take.
Unions condemn lack of company
consultation
Trade unions who met with TNT in The
Hague yesterday condemned the
company for refusing to begin proper
negotiations on the future of the 36,000
workers of its soon to be sold logistics
division.
Training Courses
Through the T&G stewards, health and safety (H&S)
representatives, branch officials and active members can
benefit from an extensive range of training courses. These
include
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Bargaining issues and negotiating skills
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Company information and accounts
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Human resource management
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New technology and change at work
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The law at work
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Communication and tutoring skills
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Trade unionists and the environment
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Organization and recruitment
Pensions are under threat
All sectors are campaigning to protect final salary schemes which are being attacked by employers in many
industries. Indeed, the TUC has described the current threat to pensions as the first serious attempt to cut wages
and conditions since World War II. In addition the T&G is calling on the government to:
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Raise the basic state pension from £84.25 to at least £114 a week
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Restore the link between pensions and earnings
Pay the full state pension equally to all men and women
© Bishops EMS Department
Page 2
1. From the articles on the previous page, what do you think are the aims of trade unions?
2. What possible benefits or problems could arise in a firm where trade union membership
among their workforce is high?
3. 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.
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Industrial unions represent workers in the same industry, e.g., the Turkish Union of
Defence Workers , National Union of Mineworkers in South Africa (NUM) and the Overseas
Telecommunications Services Employees Association of Mauritius (OTSEA).
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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.
© Bishops EMS Department
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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 manufacturing industry 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.
© Bishops EMS Department
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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 shop a firm can employ unionized and non-unionized labour.
 In a closed shop all 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 not matched 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.
© Bishops EMS Department
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Industrial action
When negotiations fail, trade unions may take industrial action to put pressure on their
employers. Official action means it has the backing of the union, and other unions may also take
action in support. Unofficial action means that workers taking industrial action do not have the
support of their union.
Methods of industrial action include…
1. Overtime ban - when workers refuse to work more than their normal hours.
2. Work-to-rule - when workers comply with every rule and regulation at work in order to
slow down production.
3. Go-slow - working deliberately slowly.
4. 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.
5. 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.
© Bishops EMS Department
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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 representatives
The shop steward
A machine operator
Employee representatives
Managing Director
The work study engineer
The Union Brief
Your tasks before negotiations
The machine operators want a pay rise
for operating more complex and
demanding machinery. You also want to
set an example for the future. You do
not want your employer to think that
every time it introduces new ways of
working it can overlook its workforce.
What you want is a share in the
increased profits that can come from the
increased output of the new machines.
Before you enter negotiations write a brief report for all
your union members to read, pointing out your demands
and the management's position. This should include
answers to questions like:
 What is your pay claim?
You also fear that redundancies may
follow as machines replace workers,
and you want to limit the number of
jobs lost.
You both know that the firm has recently
received a large order from overseas, so
you need to be careful that you do not
cause the firm to lose the order. This
could mean losing jobs.
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 Why have you made this pay claim?
 What has been the management response?
 What forms of action could the union take if necessary?
 Why are both you and the management keen to
avoid a strike?
Your task after negotiations
Write a report highlighting the results of negotiations,
that is, what agreements, if any, were reached.
If no firm agreement was reached, do you advise your
members to accept or reject the management's offer? If
no agreement was reached, what will the union do next?
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The Employer's Brief
Your tasks before negotiation
The work study engineer has concluded
that the machines require no more effort
to operate than the old ones. In fact, you
feel that they ease pressure on the
skilled operator. No pay rise is necessary
to compensate.
As the managing director you fear that
any cost reductions from the increased
output from specialist machinery may be
lost if workers push for higher wages. It
may even allow lower-cost competitors
to undercut your prices. If you are also
unable to cut the number of jobs your
plant will be over manned and wage
costs will be much higher than they need
to be.
However, you do not want to lose the
goodwill of the workforce at a critical
time for the company with an overseas
order to fulfil.
Write an information sheet for the management team
including answers to such questions as:
 What wage claim has the union asked for?
 What are the implications of accepting or rejecting
this claim?
 Why you are keen to avoid a strike?
 What will be discussed with the union?
© Bishops EMS Department
Your task after negotiations
Prepare another management document to report on
agreements reached and their effects on the company
and the action that will be taken if negotiations break
down and no firm agreement is reached.
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