Labor Unions

“Union gives strength”— Aesop

 Learning Outcome

 To discuss the basic concepts of labour unions.

 To discuss the implications of labour unions in labour market.
 Introduction

 Labour unions or trade unions are organizations formed by

workers from related fields that work for the common
interest of its members.
 They represent a cluster of workers and provide a link
between the management and workers.
 Purpose of Labour Unions

 Wages and salaries

 Working conditions
 Welfare of workers
 Regulation of relations
 Settlement of grievances
 Raising new demands on behalf of workers
 Collective bargaining and negotiations 
 Growth and Origin of Trade Union in India

 The first factories Act was passed in the year 1881 by virtue of
recommendation of Bombay factory recommendation in the
year 1985.
 The workers of the Bombay textile industry demanded that
the working hour should be reduced, weekly holidays and
compensation in case of injuries suffered by the workmen.
Bombay mills hand association is first union established for
workers by N.lokhande in the year 1890.
 Formation of ILO (international labour organization) leads to
formation of trade unions 
 Kinds of Unions

 Crafts union consists and comprises of earning of wage from

the single occupation, it includes all the workmen working for
single craft even of different industries.
 An Industrial union is formed by virtue of actions of industry
not because of similar crafts or works.
 General union consists the workmen of various crafts and
industries.
 Poll Time

Which of the following is true about labour unions?

A. Fight for wages and salaries of their members
B. Helps to provides good working conditions
C. Helps to settle grievances
D. All of these
 Structure of Tradition

 Local Level: A local level federation is at the lowest level in the

structure from below. The local trade union federation holds
together the plant level unions at the local level in a particular
craft and industry.
 Regional Level: It is the organization consisting of all the
constituent unions in a particular state or region. Their
importance cannot be exaggerated beyond a particular state
or region as conditions, customs, practices, style of living differ
in every state or region.
• National Level: These are the national level bodies to which
plant level unions, local unions or regional level unions may
get affiliated. These are the apex bodies at the top of the
structure and act as coordinating bodies.
 Problem faced by Trade Unions in India

 Uneven Growth
 Low Membership
 Multiplicity of Unions
 Inter Union Rivalry
 Weak Financial Position
 Lack of Public Support
 Determinants of Union Membership

• Workers choose whether to join a union. A worker joins if the

union offers him a wage employment package that provides
more utility than the wage-employment package offered by a
non-union employer.
 Monopoly Unions

• If unions choose to be the exclusive representative of workers,

they automatically receive a legal monopoly over negotiation
and representation.
• Likewise, workers who do not want this representation must
accept the union contract and cannot negotiate on their own
behalf or represent themselves.
 Poll Time

Which of the following were the major problems in the

effective working of labour unions?
A.Uneven Growth
B.High Membership
C.Multiplicity of Unions
D.Weak Financial Position
 Collective/ Efficient Bargaining

• Negotiation between representatives of workers and

employer(s) establish terms & conditions of employment
that are acceptable to both sides
• Power in numbers is the philosophy behind unions and
collective bargaining
• Single unskilled or semiskilled workers are easily fired and
replaced
 Collective Bargaining

• Union and management try to reach an agreement on such

issues as pay, pensions, workload and holidays
• Once an agreement is reached a contract called a collective
agreement is signed by both sides that state the terms of
the agreement and how long it is in effect
 Collective Bargaining

• if a dispute arises during the term of the collective

agreement than an arbitrator (outside person) settles the
dispute
 Strike / Lockout

• Occurs if labour and management cannot come to an

agreement and create a collective bargaining agreement (CBA)
• labour may strike (withhold labour services) or management
may lockout the workers
 Strike / Lockout

• Both sides use this tactic as a last resort as it hurts everyone

involved including the economy as a whole.
• Both sides feel a strike or lockout will force the other side to
give in to their contract demands.
Thank You