IGCSE®/O Level Economics 3.3 The role of trade unions

What is a trade union or labour union? Trade unions are organizations that promote and protect the interests of their members (employees) to improve their wages and working conditions The trade union movement worldwide has helped to fight and bring to an end child labour in many countries improve workers’ safety increase wages for both union and non-unionized workers improve education and other benefits for many poor and working class families

Types of trade union Trade unions may represent: employees with the same skills or in the same occupation employees in the same industry employees with different skills in different occupations and industries Craft unions e.g. Union of Operators and Technicians in Cinema and Video Projection (Spain) Non-manual unions e.g. German Police Union Industrial unions e.g. National Union of Mineworkers in South Africa (NUM) General unions e.g. Australian Workers Union

The aims of unions Unions’ aims are: negotiating improvements in wages and other non-wage benefits 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 improving employment legislation

Collective bargaining Negotiations take place between trade unions and employers over improvements in wages and other non-wage benefits for employees Trade unions may seek to improve the wages and other working conditions of their members if: 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 productivity of their members has increased the profits of the employing organization have increased

Union bargaining strength Strong bargaining position if: the union represents most or all of the workers in the firm or industry union members provide essential services such as health care and electricity the union is able to support its members financially during strike action Weak bargaining position if: many workers in the firm or industry do not belong to a union union members provide non-essential goods or services for which there are many close substitutes the union lacks financial resources laws outlaw or severely restrict union activity

What if negotiations fail? Trade union members make take industrial action in an attempt to increase their bargaining strength. Industrial action disrupts production, increases costs and reduces revenues for employers. 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, help them to settle their industrial dispute.

Forms of industrial action