IGCSE Economics

3.3 – The Role of Trade Unions

 Learning Outcomes
• Describe trade Unions and analyse their role in an
economy

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 What is a Trade Union?
• A trade union is an organisation which represents
the interests of its workers in negotiations about
improving working conditions with employers and
government.

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 What has the Trade Union
movement done?
• 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
 Types of Unions

Trade unions may represent: Craft unions

e.g. Union of Operators
and Technicians in Cinema
and Video Projection
• employees with the same (Spain)

skills or in the same occupation Non-manual unions

e.g. German Police
Union

Industrial unions
• employees in the same e.g. National Union of
Mineworkers in South Africa
industry (NUM)

• employees with different skills in different General unions

e.g. Australian Workers
occupations and industries Union
Task – Read the ‘Unison Case
Study’
• Questions:
• How has the relationship between trade unions and
employers changed over time?
• What are the ‘shared goals’ of Trade Unions and
Employers?
• What are the benefits of Union Membership?
• How can unions help in disciplinary/grievance
procedures?
• How have trade unions worked to ‘Safeguard’
employees rights?
• What methods of ‘Industrial Action’ may be taken?
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 Aims of Trade Unions...
• 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
•providing social and recreational amenities for their members
• improving employment legislation
 Questions:
• Why are trade unions needed?

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HOW DO TRADE UNIONS
ACHIEVE THEIR GOALS?

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 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 profits of the employing organization
have increased
 The Strength of Union
Bargaining Power
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
WHAT IF NEGOTIATIONS
FAIL?

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 When negotiations fail…..
• If the two parties fail to make an agreement, the
negotiations may reach a ‘deadlock’
• An independent Arbitrator can be called in to
resolve the situation
• If this fails, either the workers or the employer may
take industrial action to try and get what they want
 Arbitration

• An independent arbitrator is
bought in to listen to both
sides and make a final
decision and
recommendation.
• The arbitrator’s word is
legally binding.
• The decision required can
either be a compromise or a
pendulum arbitration can
be required
Industrial Action taken by Trade
Unions
• Action Days – Workers strike for a day or two at a
time
• Go-slow – Workers carry on working but do the
minimum amount
• Overtime ban – Workers still get basic pay but
refuse to work overtime
• Strikes – Workers withdraw their labour and refuse
to work
• Withdraw goodwill – refuse to attend meetings or do
work of absent staff
• Work to rule – Follow rule book exactly and do
nothing extra
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 Task….
• Write lists of the Pros and Cons of
workers/trade unions taking industrial action
(tip: think about it from the perspective of
the workers and the employer)

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 Questions….
• Trade Union membership has been on
the decline over the last 20 years.

• Why might this be the case?

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