A trade union refers to an organization with members consisting of workers and union leadership who are united for the promotion and protection of their common interests. Workers come together in a union so as to pursue such goals as the protection of the integrity of their trade, clamour for higher pay and employment, and better working conditions (Reynolds, 2008). A trade union could refer to: a general union representing workers in a given industry; a craft union representing skilled workers in a specialized field; or a company or house union representing the interests of a single company often without connection with other unions (E.C, 2010).
A thriving and well-run business is a fundamental motive for any company, benefitting both the employer (in this regard, the manager) and the employees. It is often argued that the unionization of workers is disadvantageous to employers while enhancing benefits for employees. Tensions and misunderstandings in adversarial relationships often hinder productivity and lead to lost sales, lower output, and mounting costs. If unchecked, they can lead to the detriment of business and eventual loss of employment for the workers as well (Hall-Jones, 2010).
This paper explores the advantages and disadvantages that trade unions bear to employers and their employees seeking to show that there is significant benefit in unionization. Benefits to employees are first outlined below and thereafter contrasted with employer benefit and/or disadvantage so as to establish the extent of benefit to both parties.
Advantages to employees
The primary mandate of unions is to enhance the benefits and recognition of employees in the workplace, protecting them from exploitation. It gives them a platform and a collective voice with which to negotiate with employers on myriad issues including wages, rules of work, complaint procedures, hiring rules, promotion and firing, work-related benefits, as well as safety and other policies governing the workplace. Trade unions also guarantee workers protection from work-related challenges such as lack of promotion, demotion, termination, among others, enhancing their capacity to contest such measures (Phil, 2007). Additionally, unions often organize training and development inclusive of access to government funds and support through union learning reps (Fulton, 2013). This enables workers to realize higher than average wages and gains from work, as well as safeguards to their overall health and safety in the workplace.
Advantages to employers
·This section gauges the benefit of trade unions to employers juxtaposed with employee benefits and/or disadvantage. Employer/manager benefits include: Simpler negotiations
With union representatives speaking on behalf of the entire workforce, dealing with unions simplifies negotiation processes eliminating the need to negotiate with multiple employees. This enhances the speed and efficiency of the negotiations. Trade unions can also help in the negotiation of productivity deals enabling increased output and consequently enables the business to afford higher wages mutually benefitting both the employer and the employed (Eironline, 2007). The demonstration of good employment practices can be a significant source of competitive advantage influencing the attitudes of stakeholders and the wider community, and consequently the company’s brand and reputation (Hall-Jones, 2010).
However, it is often the case that contests over worker wages/earnings and the employer’s perspective of mounting labour costs are difficult to resolve with each party focused on their particular view. Legally, union members in disagreement with employers are allowed to strike without suffering disciplinary action. This factor often complicates negotiations (E.C., 2010). Strikes and industrial actions cost the company or business money directly from lost production, as well as creating other problems such as withering employee morale and willingness to work and bad publicity. These attendant problems could affect output and/or sales with possible customer boycotts, as well as hindered business relations with vendors or commercial customers in their anticipation of a drop in productivity and inability to deliver on commitments (Hall-Jones, 2010).
In this regard, trade unions in their quest for enhanced welfare often engender complications in relations surrounding the entire business, even to the extent of hindering business. However, it is noteworthy that unions are endowed with a wealth of experience regarding employment law which can help in early identification and resolution of problems. Their involvement in such scenarios often stops cases from proceeding to expensive and time-consuming processes such as the employment tribunals (Eironline, 2007).
· Employee satisfaction
Unions give employees a voice with which to speak to the employer and bargaining power afforded by the strength and capacity in their numbers. Through this, unions enhance the satisfaction of employees enabling them to increase their average wages as well as benefit packages. This satisfaction which obtains from needs that are met enhances job satisfaction and consequently employee willingness to work harder leading to higher productivity and quality of output (Fulton, 2013).
However, the satisfaction of employees deriving from better pay and work conditions often comes at a cost to the employer with consequent upsurges in labour costs being the main disadvantage of unionization of employees. Deductions of dues paid to unions from workers’ pay in addition to increasing costs, also increases the workload of the accounting department (Hall-Jones, 2010).
· Reduction in turnover
A workforce comprising of union members is often characterized by reduced turnover with less frequency of employees leaving their jobs. Dues paid for union membership and position in the organization are considered to contribute to this trend often acting as hindrances to employee exit (Eironline, 2007). For the employer (manager) or organization, lower levels of turnover saves the business money in the long term with less expenditure spent in frequent training and induction of new employees (Hall-Jones, 2010).
It is however noteworthy that with regard to employers’ actions such as termination, demotion or lack of promotion, and alleged harassment or discrimination, individual employees often lack financial resources and will to pursue complicated contests. With the support of unions, workers are often encouraged and represented in their appeal of such actions or in the filing of suits challenging them (Reynolds, 2008; Fulton, 2013). The effect of this is two-pronged, benefitting and protecting affected employees while adversely affecting employers, complicating business.
· Ease in change processes
To stay at the forefront and to enhance competitiveness in the industry, businesses often have to undergo change. Achieving this with multiple employees, each with varied perceptions and opinions is often a significant challenge (Eironline, 2007). However, since employees are more likely to be receptive to unions, partnering with trade unions may improve the chances of success in the change process as well as its effectiveness. Trade unions can be a significant partner in reinforcing the credibility of the messages from the employer as well as reassuring employees and mitigating their anxieties (Eironline, 2007; E.C., 2010).
Unionization and its influence can have adverse effects on the control of human resource challenging the instilling of discipline and checking of poor performance. The promotion and termination of workers based on objective parameters such as merit, productivity, among others is hindered with the influence of unions with most of the unions basing their negotiations on workplace rules on seniority rather than merit. The reaction of union and their rules, in this regard, limit the options available to employers and managers (Hall-Jones, 2010).
On the one hand, union membership enhances the capacity of employees to challenge employer actions, challenges the control of the human resource component in business, and often engenders increases in costs, workload and adverse economic effects attendant to labour unrest. On the other hand, however, trade unions bear significant benefits to both employers and employees. To employers, trade unions enable simpler and effective negotiation processes, early identification and resolution of labour-related problems, reduction in turnover, and as well enhance employee satisfaction. It is also a resourceful partner in the change process. To employees, trade unions provide essential protection from exploitation, a voice in the enhancement of their work life, as well as facilitating training and personal development.
From the foregoing argument, it is gathered that trade unions, in spite of its disadvantages, is far more beneficial and could enhance employer-employee relations as well as the outcome of business
Eironline, 2007. TUC promotes business benefits of unions to employers. European Industrial Relations Observatory on-line. Viewed on 9/12/2013 from: http://www.eurofound.europa.eu/eiro/index.htm
European Commission, 2010. Industrial Relations in Europe. Directorate General for Employment, Social Affairs & Inclusion. EC.
Fulton, L., 2013. Worker representation in Europe. Labour Research Department and ETUI. Brussels: ETUI
Hall-Jones, P., 2010. Unionism and Economic Performance. Internet article & statistics. Viewed on 8/12/2013 from: http://www.newunionism.net/library/
Phil. D., 2007. State of the Unions: How Labour Can Strengthen the Middle Class, Improve Our Economy, and Regain Political Influence. McGraw-Hill Professional. ISBN 978-0-07-148844-0
Reynolds, O., 2008. “Labour Unions.” In: David R. Henderson (Ed.). Concise Encyclopaedia of Economics (2nd Ed.). Indianapolis: Library of Economics and Liberty. ISBN 978-0865976658.
Menezes-filho, Naercio and John van Reenen (2003), “Unions and Innovation: A
Survey of the Theory and Empirical Evidence”, CEPR Discussion Paper 3792.
Metcalf, David. (2003), “Unions and Productivity, Financial Performance and
Investment: International Evidence”, in John Addison and Claus Schnabel, eds.
International Handbook of Trade Unions, Northampton, Mass.: Edward Elgar,