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Trade Unions
An organisation which employees join in order to gain greater power and security at work. Union membership can provide greater influence collectively with employers than workers have as separate individuals.
Fall in union membership
Over the past 20 years the influence of unions has declined. Reasons for this include:
- increased employment protection legislation
- introduction of ‘anti union’ legislation
- decline in heavily unionised industry
- management now allowing workers to participate in decisions
- increased number of small businesses
- rise in self employment
Objectives – what trade unions are trying to get:
- good rate of pay
- good working arrangements
- job security for staff
- influence over government policy
Functions to balance relations between employers and employees:
- Negotiation – negotiate with management on employees behalf (collective bargaining)
- Representation – represent employees who feel their rights have been infringed
- Provision of information and advice – provide info and advice to both employers and employees
- Other member services – e.g. legal advice, financial support and assistance
The more employees in a business, the greater the power of the union.
To be a member, there is a subscription/ fee that is payable.
Industrial disputes and methods of reconciliation
Disputes arise where workers and employers cannot reach agreement over an issue. Common disputes:
- rate of pay
- working conditions
- flexible working
- introduction of new machinery / technology
Industrial action by employees
- Go slow – working at a minimum pace
- Picketing – standing at an entrance preventing other workers going to work
- Strike – workforce doesn’t arrive to work
- Work to rule – only doing what is in their job description to the letter
- Overtime ban – only work contracted hours, refusing overtime
- Sit ins – refuse to leave workplace and not allow anything to go in/ out of the business
- Work ins – workers will not leave workplace and continue to work
Industrial action by employer
- Withdrawal of overtime – refuses to give extra pay rates for overtime or reduces overtime altogether
- Lockouts – employer temporarily closes workplace, may not pay wages
- Changing standards and piecework rate
- Closure – long term closure of workplace
Industrial disputes are damaging to employee and employer:
- Lost production
- Unfilled orders
- Lost revenue and profit
- Cash flow problems
- Loss of reputation
- Loss of future custom
- Lower morale
- Loss of earnings
If parties fail to reach an agreement, reconciliation is needed:
Conciliation – bringing parties together and assisting them in reaching a mutually agreeable solution.
Arbitration – independent person or panel listens to both sides of the story and decides the outcome.
Pendulum arbitration – independent person or panel listens to both sides of the dispute and chooses between the sides, rather than compromise.
Mediation – person or panel act as an intermediary to talk and make suggestions to both sides, but the final outcome is left to the parties to decide.
Industrial tribunal – body of people set up to settle the disputes, usually with a legal chairperson and two laypersons who decide the dispute outcome.
SINGLE UNION AND NO STRIKE AGREEMENTS
Single union agreement
Recognition by a firm of only one trade union for collective bargaining purposes.
No strike agreement
A contract signed as part of a firms negotiation and dispute procedure that prevents trade union calling a strike
INDIVIDUAL BARGAINING
Where the employer negotiates directly with individuals or groups of workers over pay increases/ terms or conditions.
- Helps an employee to feel more valued and loyal to the business
- Allows business to see what motivates individual employees and packages can be tailored accordingly (e.g. some will be motivated by money, while some will be motivated by job satisfaction)
COLLECTIVE BARGAINING
Where the employer negotiates with employees representatives, usually one or more trade unions on behalf of their members.
- Less time consuming to negotiate with one group than lots of individual workers
- A union will ensure conditions are adhered to by all members
- Unions have experience and knowledge
- Unions encourage organisations to review and reflect on working practices
Collective bargaining is used less as anti union legislation was introduced in the 1970s, however in some industries it is still used widely.
SECURE, FULL TIME, SALARIED WORK
- Likely to be more dedicated and committed as it is their only job and source of income
- More likely to provide a good level of service to customers
- Labour turnover is generally lower
TEMPORARY, SUBCONTRACTED WORK
- The nature of the business may make is necessary to have limited full time, permanent staff (e.g. seasonal)
- Cheaper as business does not have to pay as much national insurance
- Temporary work will reduce under utilisation, which can have negative effects on the business.
- Poor workforce morale and motivation
- Poor public image
EMPLOYEE PARTICIPATION
The extent to which employees are involved in the decision making process.
Works councils
A works council is where representatives from within a company meet up and discuss key issues excluding pay.
They must be set up where there are at least 1000 workers in Europe.
In the UK, a part time worker is classed as half a worker.
Each council is made up of between 3 – 30 people, and must have a representative from each company, plus a management representative.
Issues they may discuss could be business performance, daily running etc.
Works councils should create positive working relationships, it removes us and them feelings, barriers to communication, increases employee awareness and appreciation of difficulties.
EMPLOYEE SHAREHOLDERS
There are two types of share ownership schemes:
- SAYE (Save as you earn)
- Share option schemes
SAYE – Staff save money over a five year period (£5 - £250 a month). The money can be converted to shares at the price the share was at the start. This increases staff retention (reducing recruitment costs). They are more likely to work harder which increases productivity/ effort. This offers the chance for some ownership and control of the business, but probably has little impact. The shares are offered at a discounted rate as it will benefit the company. The reality is most will sell the shares as soon as they get them to make a profit.
Share option schemes - This is in relation to senior managers. They are given the opportunity to buy a substantial amount at an agreed date.
Autonomous working groups
Where groups of employees are made responsible for a particular department, product or process and decide between themselves now the work is to be divided and controlled.
The benefits:
- increases motivation in staff that are involved
- greater job satisfaction
The drawbacks:
- increased workload
- jealousy
- lack of managerial skills in workers
- resentment
EMPLOYMENT LAW
INDIVIDUAL LABOUR LAW
Aims to ensure that employees and employers act fairly in dealing with each other, and relates to the rights and obligations of individual employees.
- equal pay act
- sex discrimination act
- race relations act
- disability discrimination act
- working time directive
- national minimum wage act
- age discrimination
- employment equality regulations
COLLECTIVE LABOUR LAW
Aims to influence industrial relations and control the activities of trade unions.
- Employment act 1980 – employers no longer obliged to negotiate with trade unions, pickets restricted to place of work and only 6 picketers
- Employment act 1982 – removed the trade unions immunity from damages if unlawful industrial action took place. 85 % had to support restrictions placed on closed shops.
- Trade union act 1984 – became liable to be sued if they authorised a strike without a secret ballot. Trade executives have to be elected every 5 years to improve democratic decision making.
- Employment act 1988 – specific wording to be used on ballot papers and laws to protect union members from being disciplined for ignoring strike action.
- Employment act 1989 – remove outdates – unnecessary barriers on women and young people.
- Employment act 1990 – unlawful for employer to refuse to employ a non-union worker. Trade unions liable for industrial action that takes place.
- Trade union reform and employment right act 1993 – increase rights of individual employees and trade union members to increase competitiveness.
- Employment relations act 1999 and 2004 – employers rights increased in relation to trade union membership and claims for unfair dismissal.
Comments
These notes are aimed at people studying for A Level Business Studies (Unit 4), but will be suitable for other people too.
Originally submitted by rachd_22 on TSR Forums.
