Understanding Trade Unions: Types, Benefits, Structure

Trade Unions: Impact on Businesses and Employees

In smaller businesses, employees can often talk directly to their employer if they have any problems. However, in larger businesses that employ many people, this becomes extremely difficult. It is also challenging for the Human Resources department to make decisions (e.g., who will get a pay raise) when they have hundreds of employees. It becomes much easier if decisions are negotiated with a trade union, an employee association that represents them. This saves management a significant amount of time because they do not have to meet with individual employees to discuss concerns.

Employees might not always be treated fairly at work. They may be overworked and underpaid. Trade unions have the role of bargaining with the HR department for better working conditions, terms of employment, and improved pay.

Types of Trade Unions

Employees with similar interests (such as higher pay) form trade unions. Trade unions are a form of pressure group with the ability to influence business activity. There are four main types of trade unions:

• Craft Union: For workers skilled in a particular job.
• General Union: For unskilled and semi-skilled workers from different industries.
• Industrial Union: For all types of workers in a specific industry.
• White-Collar Union: For non-manual or office workers.

Why Do Workers Join a Trade Union?

Unions have a shop steward, who is an unpaid representative of the union. When someone is new to a job, they may be asked if they want to join. If the person joins, they will have to pay an annual subscription. This money is used to employ union officials who will represent the views of the employees.

Advantages of Joining a Union

• Strength in numbers.
• Improved conditions of employment.
• Improved working conditions.
• Improved sickness benefits, pensions, and retrenchment benefits.
• Improved job satisfaction and encouragement of training.
• Advice and financial support if a worker is unfairly dismissed, made redundant, or is asked to do something not part of their job.
• Improved fringe benefits.
• Employment where there is a closed shop (when all employees in a business must belong to the same union).

Trade Union Objectives

• To put forward their views in the media to influence government decisions on pay, employment, etc.
• To improve communication between workers and managers.

Closed Shop

A closed shop is when all employees must join one union in order to be employed. This is because union members may feel that the union is ineffective when non-members receive the same pay raises. They perceive it as unfair. Trade unions also gain greater strength if all employees are members. However, many people believe this is unfair since individuals are forced to join – they should be able to make their own decisions.

Single Union Agreement

Some companies have a single union agreement, meaning a business only agrees to deal with a single union. Any employees who want to join a union can join this one. This is becoming more popular because many employees are becoming multi-skilled and may not know which union to join.

Advantages to the Employee:

• Discussions are clearer if there is only one union to deal with.
• The union has greater power.
• No disagreements between different unions.
• A better working relationship should develop between the union and management.
• Disputes are solved more quickly.

Advantages to the Employer:

• Discussions are clearer.
• A better working relationship should develop, meaning there would be fewer industrial disputes, benefiting both employees and employers.
• Disputes are solved more quickly.
• It is easier to agree to changes.

The Structure of a Trade Union

The structure of different unions varies, but most elect a President or General Secretary to work full-time for and be paid by the union. They work at the union’s headquarters. If the union is large, there will be union officials to take care of members in different branches. Each branch represents its members in one work site, one factory, or for one employer. Each branch has a representative. Unions are usually democratic, and their union officers are voted in by the members.