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

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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.

8. Forms of industrial action