Task 2 : Source information

on a trade union and an

industry association

Name: Panrutai Jitruesi

Student No. : 3247
Trainer : Uwe Szewczyk
Date : 15/03/2017
Unit Code : SITHIND201
Unit Name : Source and use
information on the hospitality industry
Unions and employer associations

Since 1 July 2009, industrial organisations such as employer associations and

unions have been able to apply to the Fair Work Commission for registration
under the Fair Work (Registered Organisations) Act 2009 (the RO Act). These
organisations provide support and advice to employers and employees to help
them better understand their rights and obligations in the workplace.
The organisations listed below are not associated with the Fair Work
Ombudsman or the Australian Government. Clicking a link to the below
organisations will take you out of this website.
There are industrial associations active in Australia that are not registered under
the RO Act, such as your local chamber of commerce, that can also offer
assistance.

Workers and employers are the groups most directly affected by national policy
on work health and safety and workers’ compensation developed by Safe Work
Australia. Safe Work Australia works closely with unions and employer
associations to ensure the valuable insight and perspective of employers and
workers are taken into consideration in the development of national policy.

One way to differentiate Unions and Associations is through the tax code. Unions
are part of what the IRS labels a “Labor Organization” in section 501c5 of the tax
code and have these features:

• An association of workers
• Who have combined to protect or promote the interests of the members
• By bargaining collectively with their employers
• To secure better working conditions, wages, and similar benefits.

By comparison, there is the Professional or Trade Association, which falls under

section 501c6 of the tax code and has these characteristics:
• It must be an association of persons having some common business
Organization interest and its purpose must be to promote this common
business interest;
• It must be a membership organization and have a meaningful extent of
membership support;
• It must not be organized for profit;
• No part of its net earnings may inure to the benefit of any private
shareholder or individual;
• Its activities must be directed to the improvement of business conditions
of one or more lines of business as distinguished from the performance of
particular services for individual persons;
• Its primary activity does not consist of performing particular services for
individual persons;
 • Its purpose must not be to engage in a regular business of a kind
ordinarily carried on for profit, even if the business is operated on a
cooperative basis or produces only sufficient income to be self-sustaining.
So what are the trademarks of a Union? The most common features of a Trade or
Labor Union are:
• Negotiate agreements with employers on pay and conditions
• Discuss major changes to the workplace such as large scale redundancy
• Discuss with their members any concerns with employers
• Accompany their members in disciplinary and grievance meetings
• Provide their members with legal and financial advice
• Provide education facilities and certain consumer benefits such as
discounted insurance
Then, to compare, the most common features of a Trade or Professional
Association are:
• Promote a particular trade, profession or industry
• Creation and administration of standards and/or regulations for an
industry
• Be an advocate in the business or political arena
• Offer legal support for trial as expert witnesses
• Offer of educational and advancement study opportunities for members of
the association
Now, a trade association can take on roles of a union, and vice-versa. But, the
difference is above. They offer similar, but not identical structures. While the
Union serves to promote the workers, the Association serves to promote the
industry itself. This distinction makes all the difference. While an Association can
offer negotiation for labor costs and wages, it does this from its role, for the
industry and not for the workers themselves. While a Union can offer expert
witnesses for trial and advocate in the political arena, it does so only in support
of the workers.

Many associations exist which serve the role of a Union in various fields, from
sports to medicine to education. As well, there are trade union federations, that
is, a national association made up of Unions. The largest of these is the American
Federation of Labor and Congress of Industrial Organizations (AFL-CIO). By trade
unions joining together as a federation or confederation, they gain many of the
advantages of professional associations, with the most obvious advantage being
able to engage in direct political advocacy.

Several associations are commonly called Unions in the media, such as the
National Education Association (NEA). While the NEA has adopted many roles
traditionally held by Unions, such as contract negotiations, it is first and foremost
a trade association. Chartered by the federal government in 1906, the NEA only
began adopting union roles in the 1960’s in response to multiple states demands
for the services normally handled by Unions. This was further pushed when the
NEA partnered with the American Federation of Teachers, a Union Federation.
Several states NEA affiliates have merged with AFT unions as well, notably in
Florida, Minnessotta, Montana and New York, further muddling the issue due to
these hybrid entities. The NEA affiliates with Union components have joined
Union Federations at times, such as the AFL-CIO.
Unions enable employers to save overhead through the Unions ability to share
insurance and pension costs, training programs, and quality inspections. When
employers work with Unions, this results in a significant reduction in the cost to
run a business, a major factor in being competitive in the increasingly worldwide
marketplace. The increased cost of the workers themselves results in more
business as consumption increases.

Associations do offer services for the workers in the field in which they cover, but
not to the same extent as the Union can. Unlike the more democratic Unions,
Associations tend to elect to committee or council. The NEA, for instance, has its
members elect only to what is called the Representative Assembly (RA). The
senior NEA leadership is selected not from its membership, but by the RA, many
times outside management to serve in the same manner as a corporations board
of directors. By comparison, Unions such as the AFL-CIO and Teamsters use a
more direct election process, with the AFL-CIO doing proportional electors and
the Teamsters having direct elections. As a result of this direct link between
worker and leadership, the Unions tend to more closely represent the workers
they represent.

Many on the right will argue against unions, arguing that union wages take away
from the wages of the ununionized, or that they disrupt commerce, even that the
cost of the union labor makes a business unprofitable. This is of course blatantly
false. For example, despite the oft-pointed to Milton Friedman and his claims in
“Free to Choose” that the percentage of wage to GDP is 85% with the result that
unionized labor takes money away from ununionized, in truth, today it is 44%,
but even in 1979 when he made his claim, the percentage was only 49%. He used
bad math based on numbers given to him not from the Bureau of Labor Statistics,
but from the Heritage Foundation think tank founded in 1973. In the computer
industry we call this “Garbage In, Garbage Out.” The erosion of union labor, if his
claim were to be true, would result in the percentage of wage to GDP to stay
constant.

Instead, the erosion mirrors the reduction in this percent. As union jobs
dissapeared, rather than the money being redistributed to the ununionized, the
money simply fled the labor pool entirely. From 1980 to today, the percentage of
union membership dropped from roughly 20% in 1979 to just over 11%. This
would fit perfectly with the identical drop in wages. At 50% of wages, the union
percentage of that would cover roughly 10%. Drop that portion to 11%, and it
would drop to just under 41%, exactly as we have witnessed. And remember that
even at this point, in 1979, the percent had dropped from its 1969 peak of 53%.

Trade Associations have been on the rise, claiming to be an alternative to unions.

In the field of education alone, over a dozen national associations are now in
active service across the country, with countless more local and state
organizations. The Association is more fractured, and specialized, than the Union,
as it should be. They each serve a role in the labor market.