Labor management relations has become one of the most delicate and complex problems of modern industrial society. Labor management progress is impossible without cooperation of labors and harmonious relationships. Therefore, it is in the interest of all to create and maintain good relations between employees (labor) and employers (management).
The term ‘Labor management Relations’ comprises of two terms: ‘Labor’ and ‘Relations’. “Labor” refers to “any productive activity in which an individual (or a group of individuals) is (are) engaged”. By “relations” we mean “the relationships that exist within the industry between the employer and his workmen.”
The term labor management relations explains the relationship between employees and management which stem directly or indirectly from union-employer relationship.
Labor management relations are the relationships between employees and employers within the organizational settings. The field of industrial relations looks at the relationship between management and workers, particularly groups of workers represented by a union. Industrial relations are basically the interactions between employers, employees and the government, and the institutions and associations through which such interactions are mediated.
Trade unions take their place within the wider labor movement, which consists of several more or less intimately related organizations. All have the common objectives to improve the material, cultural and social status of their members. Trade unions have a particular function in this, but relationships between the various parts of the labor movement vary from country to country and from period to period.
Trade union movement was created and developed to meet human, economic and political needs and aspirations, varying from region to region, country to country and continent to continent. There wad no overall plan. These bodies display no single patter of development, structure, organization or objective. The movement is a living organization in a continuous flux which develops, merges and separates while responding to economic and political pressure. Through the courses of time, it has been possible to trace the interaction between local, national and international changes on structure, objectives and affiliations at all levels of the trade union movement.
Concepts of Labor Management Relations
Definition of Labor Management Relations
Labor refers to workers as a group. Workers in an industry sell their own labor in exchange for an income they negotiate with the management. While these negotiations may occur on an individual basis, many wage negotiations occur between employees who have organized into a group called a labor union (formed to improve the members’ wages and working conditions) and managers. This group wage- and benefit-negotiating process is called collective bargaining.
The relationship between labor and management can involve substantial conflict. While labor often requests higher wages to improve its standard of living, management may resist because wage increases may cut into industry profits. Managers can use the threat of layoffs (releasing employees) in order to keep wage increases down, while workers can go on strike (withhold their labor) if their demands are not met. Specialists in the field known as labor relations study how workers organize themselves, as well as the subsequent interactions between management and labor.
The nature and scope of labor management relations consists of an analysis of how people work together in a workplace, an evaluation of differences as well as relations arising among them, and how they regulate organizational arrangements for the reconciliation of different interests.
As the time passes, different determinants have come into the fields of industrial relations. These include government machineries for settlement of disputes, workers’ and management’s role into collective bargaining, settlement of grievances by arbitration, conciliation or adjudication workers’ participation at various levels of management etc.
The elements of industrial relations are as numerous as the production functions. These represent a combination of attitudes, personal contacts and relationships, standard procedures, agreements and documents in a variety of benefits and disciplines etc. The essence of the scope is a constant pursuit in which all men in industry should live together for which it must find ways and means of reconciling the differences between them and sometimes identical for two parties, i.e. management and worker. It involves economic, social and political objectives.
Perspective theories of Labor Relations
When studying the theories of labor management relations, there are three major perspectives that contrast in their approach to the nature of workplace relations. Each offers a particular perception of workplace relations and will therefore interpret such events as workplace conflict, the role of trade unions and job regulation very differently.
In unitarism, the organization is perceived as an integrated and harmonious whole with the ideal of “one happy family”, where management and other members of the staff all share a common purpose, emphasizing mutual cooperation. Furthermore, unitarism has a paternalistic approach where it demands loyalty of all employees, being predominantly managerial in its emphasis and application.
Consequently, trade unions are deemed as unnecessary since the loyalty between trade unions and organizations are considered mutually exclusive, where there can’t be two sides of industry. Conflict is perceived as disruptive and the pathological result of agitators, interpersonal friction and communication breakdown.
In pluralism the organization is perceived as being made up of powerful and divergent sub-groups, each with its own legitimate loyalties and with their own set of objectives and leaders. In particular, the two predominant sub-groups of in the pluralistic perspective are the management and trade unions.
Consequently, the role of management would lean less towards enforcing and controlling and more toward persuasion and co-ordination. Trade unions are deemed as legitimate representatives of employees, conflict is dealt by collective bargaining and is viewed not necessarily as a bad thing and if managed could in fact be channeled towards evolution and positive change.
This view is also known as the conflict theory. This view of labor management relations looks the nature of the capitalist society, where there is a fundamental division of interest between capital and labor, and sees workplace relations against this background. This perspective sees inequalities of power and economic wealth as having their roots in the nature of the capitalist economic system. Conflict is therefore seen as inevitable and trade unions are a natural response of workers to their exploitation by capital. Whilst there may be periods of acquiescence, the Marxist view would be that institutions of joint regulation would enhance rather than limit management’s position as they presume the continuation of capitalism rather than challenge it.
Labor Management Relations: Attitudes and Approaches
There are some attitudes and approaches which have been influential in the study of labor management relations.
A systems approach towards industrial relations has been much contributed by John T. Dunlop. This can be explained by three aspects. The first component relates to major inputs under two groups: i) External culture and environmental comprising values like traditional values of society, attitudes of labor and management to resolve differences, political system, government role, legislation etc. and ii) Internal inputs such as industrial relations-stuff philosophies, corporate views, technology input etc. The second component relating to labor management relations comprising of six sub-systems, such as recruitment, compensation, performance appraisal, labor relations, employee development and employee maintenance. These act as interconnections in developing human resource potential in the organization. The third component of this model is establishing of a mechanism to for monitoring performance of the labor management relations functional agencies and pre-established standards. This feedback mechanism includes both qualitative and quantitative indices of performance. This model provides a good mechanism for viewing the important factors which largely determines the effectiveness of the industrial activity.
This model was attacked by a lot of critics on several aspects. This model was found as heavily constructed on structural determinant of labor management relations, while neglected the functional components. The system was not only ambiguous and static in nature, but also omitted behavioral motivations, perceptions and attitudes. The critics also pointed out that this model leaves out of explanation the way in which key leaders in unions, enterprises, employers’ associations and government agencies are able to influence the events.
Developed by Alan Flander, this model views labor management relations as employment relation between management and workers within certain institutionalized regulations. The basic issue of this regulation is to regulate jobs. A system of labor management relations is seen as a system of rules. These rules appear in different ways such as in legislation and in statutory orders; in trade union regulations; in collective agreements and in arbitration awards; in social conventions; in managerial decisions; and in accepted “customs and practices”. The subject deals with certain regulated or institutionalized relationships in industry. In other words, the institution of job regulation is categorized as internal and external job regulations. According to him, collective bargaining is central to the industrial relations system. The rule making process of collective bargaining is regarded as a political institution involving a power relation between management and workers.
This approach was criticized in the sense that it is too narrow to provide a comprehensive framework for analyzing labor management relations problems. It has laid all its stress on collective bargaining as the principal method of rule-making but ignored the roles of “open warfare” as a separate process of determining rules. Institutional and power factors are given higher priority and the variables such as technology, market, status and ideology are not given any importance. This reveals a severe limitation of narrowness of this approach.
The main difference between Systems model and Oxford approach is that Systems model emphasizes the role of wide influences on rule determination and the Oxford approach stresses the process of rule-making through collective bargaining.
Industrial Sociology Approach
Industrial Sociology approach can be viewed as the opposite side of the coin to the systems and Oxford models. The industrial sociology model emphasizes on studying the behavioral aspects of the actors’ interaction in the work-place. The basic assumption of this model seems to be that conflict is an inherent part of industrial society and study industrial relations should focus its attention on identifying the factors that produce conflict as well as the method to resolve it. In order to understand the behavioral needs of the actors it is essential to study the motives and intentions, goals, interests and attitudes of the management and the workers that are likely to produce conflict.
These are two behavioral components in the labor management relations, i.e. managers and the workers. These two are influenced by respective rational objectives. The management’s rational objective is to seek maximum organizational control in order to secure maximum profit at the lowest minimum cost. Whereas the workers’ rational thinking is to seek maximum control of their work in order to obtain monetary reward.
The inconsistency and incompatibility of these two objectives tend to create tension in the labor management relations system. Clark Ferr argues that the conflict between labor and management is inevitable because the desires and aspirations of both the groups are unlimited but the means of satisfaction are limited. The conflict in a labor management relations system tends to arrive because of divergent interests. The relationship tends between diversity, conflict and resolution of the conflict. In a harmonious situation conflict is generated by diversity of interests and resolve through negotiation and compromise.
It is viewed that some of the conflicts lie in the dissatisfaction of the workers with the job itself, and other are with the physical and social environment at the workplace, lack of any meaningful job creates frustration to the worker as a result conflict tends to arise.
C.J.Margerison identified three kinds of conflicts, such as i) distributive, ii) structural and iii) human relations.
It is however realized that the conflict generates at two levels. Firstly, the intra-plant level where situational factors, such as job content, work task and technology and interaction factors produce three types of conflict, viz. distributive, structural and human relations. These conflicts are handled through bi-partite agreements, such as collective bargaining; structural analysis of the socio-technical system and man-management analysis respectively. In case of the second level intra-organization, resolution of conflict may involve some outside factors like governments regulation, policy of the federation or overall situation of the national economy.
It also suggests a method of inquiry which attempts to develop sociological models of conflicts. This model in fact, has concentrated all the attention of studying “people” in a situation, organization or system. The major limitation of this approach is that it takes economic and other variables as constant and emphasizes only on sociological factors. The emphasis on the significance of conflict in industrial relations is not a new one.
The Action Theory Approach
This system also stressed the collective regulations of industrial labor which is a focal point of the systems model. The actors operate within a framework which can at best be described as a coalition relationship. As a matter of fact, the actors agree to co-operation that takes place in the ways of bargaining. The action theory analysis of industrial relations points out collective bargaining as an instrumental took for solving the conflicts. It focuses mainly on bargaining mechanism
The pluralist ideology says that people in an enterprise contains different interests, aims and aspirations. The social environment is an important factor in industrial conflicts. The strike activity will come down when the industrial jobs become pleasant and integrated into the wider society. Again, it is argued that the organization is a plural society, containing many related but separate interests and objectives which must be maintained in some kind of equilibrium. Management and government should not suppress any ideas or opinions and keep the conflict within accepted bounds; as a result it does not destroy the enterprise atmosphere. Ross’ and Harman’s “strike” postulates the declining incidents of strikes because of the institutional framework. They say that the strike activity in the entire world declined in spite of an increase in union membership. The need for collective bargaining mechanism for conflict resolution is stressed. For differentiates the two aspects of relationship between workers and management. Firstly, it is a market relationship which deals with the terms and conditions on which labor is hired. This relationship is necessarily economic in character and based on contracts executed between the parties. The second aspect is managements’ handling of labor, the interaction, negotiations, distribution of power and participation in decision making processes etc.
The important criticism of the pluralistic approach is the Marxists. They argue the exploitation and slavery will continue unabated in the institutional structure of pluralism. The difference in a social structure is that the worker will be deemed to be a better paid wage slave.
Gandhi and Marx on Labor Management Relations
Certain aspects of Gandhi’s social theory come very close to Marx’s teaching. Both accept the existence of social conflict as a fact. Gandhi also saw conflict between labor and capital in industry. Industrialization proceeds, as Gandhi recognized, on the basis of exploitation of labor on one hand and agriculture on the other. Gandhi was greatly perturbed by the ill-effects of industrialization and primarily because it leads to increasing inequality. In this assertion there is striking parallel between his analysis and Marx’s rejection of Adam Smith’s rejection.
Marxian program of action and Gandhian passive resistance program has its basis on the stronger force of human nature, the will of the deprived to fight exploitation. Both start with an awareness of the existence of social conflict, therefore, resisting exploitation of exploited. In both, further, the urge in revolutionary. While Marx envisages a war between workers and capitalists based on power relationships, Gandhi’s process is non-violent and passive resistance, Marxian labor management relations is equated with a power-struggle, unlike co-operation of Gandhian approach.
Nevertheless, the fundamental difference lies in the image of the ultimate society that they have in view. Removing the element of built-in hostility of a necessary clash between the interests of labor and capital, the concept of trusteeship was advocated by Gandhi.
Gandhi put forth the ideas of truth and passive resistance by the exploited against the exploiters. Truth and non-violence became the technique of labor management relations in Gandhian concept. Truth means social justice and non-violence which contains all embracing love, active goodwill, compassion for all humanity, resisting injustice – cooperation in terms of honorable equality. It laid emphasis in peaceful action to settle disputes, failing which recourse should be had to arbitration. Marx allowed violent proletariat action and ultimately state stewardship of industry. Gandhi was against state-ownership, because, although state while apparently doing good by minimizing exploitation, it does the greatest harm to mankind by destroying individuality, which lies at the root of all progress. On the other hand, Gandhi cultivated the idea of “trusteeship” among owners.
Human Relations Approach
In recent years, the management is displaying increasing interest which in the research findings of sociologists and psychologists in an area, what has become to be known as “human relations” in industry. Social scientists have been conducting investigations into such problems, as what makes for effective communications between management and workers, what leads to good and poor morale in a work situation; what causes employees to respond to union organizing drives; which factors lead to conflict and which to co-operation in industrial situations.
Better human relations may be possible through scientific personnel management. Personnel management can be viewed from various aspects. There is the management aspect in which the improved efficiency of the men in industry is the objective; there is the conciliatory aspect in which industrial peace is the primary object; and there is social reform aspect in which the improvement of the physical, moral and emotional environment of labor is predominant. It is ultimately concerned with the human and social implications of the internal organization and methods of working and of human and social change in the society. Thus efficiency, mental health and happiness go hand in hand for the approach of human relations. Human relations in industry simply means relations at human level between management and man. Human relations approach is of developing man and not merely techniques and skills of labor force in industry. The labor force in industry spends the best part of their lives on their workplace. Their development as conscientious human beings is also responsibility of those who run the industries. Modern day worker is a delicate piece of mechanism which requires careful handling by a person knowing the art of management. Human element in industry is needed to be reorganized from a scientific and practical point of view.
The work of George Elton Mayo, professor of Industrial Research at Harvard University in the ‘30s, which is known as the Hawthorne experiment, discovered that what was forgotten in technological perfection was a human being who was doing the work. Mayo found that factory has two functions. First, to produce goods and second, is social function. But according to Mayo the situation in the factory produces the opposite in its social functions, i.e. human dissatisfaction. Industry must know the technique of handling people. Technical discipline and intellectual knowledge of professional managers are not enough to lead men at work. But the knowledge in which the men are brought to conduct themselves in life and in their profession according to a certain code of honor. Here lies the role of human relations in industry. An approach to human relations does with a man’s sense of his worth or concerning his moral values. Sound human relations in work situation cannot be achieved on the basis of cleverness but must rest on mutual trust and confidence. Somebody has truly said that industry is really a human system performing economic functions. Human relations motivate human beings in industry to serve and sacrifice for things with which they identify.
Labor Management Relations Framework
The term Labor management relations has a broad as well as a narrow outlook. Originally, industrial relations was broadly defined to include the relationships and interactions between employers and employees. From this perspective, Labor management relations covers all aspects of the employment relationship, including human resource management, employee relations, and union-management (or labor) relations. Now its meaning has become more specific and restricted. Accordingly, Labor management relations pertains to the study and practice of collective bargaining, trade unionism, and labor-management relations, while human resource management is a separate, largely distinct field that deals with nonunion employment relationships and the personnel practices and policies of employers.
The relationships which arise at and out of the workplace generally include the relationships between individual workers, the relationships between workers and their employer, the relationships between employers, the relationships employers and workers have with the organizations formed to promote their respective interests, and the relations between those organizations, at all levels. Labor management relations also includes the processes through which these relationships are expressed (such as, collective bargaining, workers’ participation in decision-making, and grievance and dispute settlement), and the management of conflict between employers, workers and trade unions, when it arises.
An industrial relations system consists of three elements:
1. Environmental Context (Technology, Market Pressure, Legal Environment)
2. Participants (Employees, Unions, Management, Government)
3. “Web of Rules” (Process by which Labor and Management interact)
For this system to work efficiently, the three participants must, to some degree, have a common ideology (acceptance of the economic system and the role of other participants). However, acceptance does not necessarily mean convergence of interests. To the contrary, some degree of worker-management conflict is inevitable as though the interests of the parties overlap, they diverge in key respects (e.g how to divide the profits).
So, an effective relations system does not eliminate conflicts, rather it provides with an initiation that minimizes its effect on management, society and employees.
The next page shows the Labor Management Relations System graphically:
Actors in Labor Management System
A labor management relations system consists of the whole gamut of relationships between employees and employees and employers which are managed by the means of conflict and cooperation.
A sound labor management relations system is one in which relationships between management and employees (and their representatives) on the one hand, and between them and the State on the other, are more harmonious and cooperative than conflictual and creates an environment conducive to economic efficiency and the motivation, productivity and development of the employee and generates employee loyalty and mutual trust.
Three main parties are directly involved in industrial relations:
Employers possess certain rights vis-à-vis labors. They have the right to hire and fire them. Management can also affect workers’ interests by exercising their right to relocate, close or merge the factory or to introduce technological changes.
Workers seek to improve the terms and conditions of their employment. They exchange views with management and voice their grievances. They also want to share decision making powers of management. Workers generally unite to form unions against the management and get support from these unions.
The central and state government influences and regulates industrial relations through laws, rules, agreements, awards of court ad the like. It also includes third parties and labor and tribunal courts.
Fig: Actors in Labor Management Systems
There are also some secondary actors, who basically evolve from the primary three actors. These actors are: 1. Trade Union
2. Employers’ Association
3. Court and Tribunal
Factors Influencing Labor Relations
There are mainly two types of factors Influencing labor relations:
History and tradition
Our history of industrial relations is one of oppression from the owner’s/employers’ part. Our industrial relations date back to the 60’s of the 18th century when rail lines were established here for the first time. The workers had to endure colonial suppression and the employers main concern was their own profits-not the workers well being. Laborers were treated as animals. Any sort of objection raised on part of the labors could be faced with death in the hands of the owners. Reflections of this trend are still visible in contemporary Bangladesh.
Nature of Leadership
We have had dedicated leaders in Bangladesh who have led the trade union movement to its present state. But allegations of opportunism also exist among the trade union leadership of Bangladesh. Our trade union leadership can still be observed to be under the control of a certain class of bourgeoisie. They have no real respect for the class struggle of the working class and seek to meet their ends by maintaining liaisons with the employer class in the name of helping the working class. More often than not, basic unions are not much more than picket unions of the management. Our trade union movement has failed to develop to its full form due to the presence of these ailments.
The contemporary union scene is pockmarked with conflicts both within the unions itself and between different unions. Leaders are observed to be prone to break away from the mother union because of internal conflict and form unions of their own. This is leading to an increase in the number of unions without any significant increase in total membership.
Perhaps the most important determinants of the relationship between the parties are the policies adopted by the unions and management. Or lack of thereof. The policies adopted by the parties may be identical, different, or amenable to compromise. In any event, these policies and the extent to which to which they exist will influence the general relationship of the union and the management and their specific actions within that relationship.
The elasticity of demand for a product produced in an industry and substitution availability are important industry characteristics which can influence collective bargaining. In some industries, such as education, medical care, or construction, there may be no available substitute available from the product.
In industries where labor costs are a significant cost item, costs such as transportation, education and construction shall be monitored closely. In other industries, such as utilities, which are capital intensive and where labor costs are not as important as other costs, management may be less inclined to strongly resist wage demands.
Some process industries, such as oil refineries, are easy for management personnel to operate during a strike. Others, such as steel mills, are impossible to operate without the regular work force. A strike in the former may mean no loss of production and is not very effective. A strike in the latter may be disastrous.
Socio economic Condition
Economic conditions are a very critical factor in influencing a union’s willingness to settle and also the nature of its respective concerns in bargaining. When economic conditions are good, the management is more prone to avoiding a strike and thus are more receptive to union demands. During economic downturns, unions maybe more concerned with security than money. The recent economic conditions of high unemployment, high inflation and low profits have made bargaining difficult.
All the factors mentioned above have a great effect on our trade union movement. For example, poor financial condition of the garments workers, according to many union leaders, is the main obstacle behind their lagging behind. Otherwise they could make the strongest movement in the country given the largest number of workers in the industry.
Legislation is probably the greatest outside force affecting labor relations. The law has created a whole new framework within which unions and management operate. Many of the parties’ actions, from the recognition of the union, to the negotiation and administration of a contract, to conciliation, meditation, and sometimes arbitration is carried out because the law requires that it be done.
Whatever the laws and regulations are, the matter of regret is that they are nor reflected in real life situations. In the garments sector, the real picture is that the workers don’t even enjoy the right of being able to join a trade union. An attempt to join trader union is still in many cases translates into loss of job for the worker.
Government Administration and the Judiciary
Governments are not only responsible for the creations of labor relations law but also administering the law. Governments may intervene in labor disputes in a number of ways. In Bangladesh, government may by order in writing prohibit a strike or lockout if the strike or lockout continues for more than 30 days. Government may by order in writing prohibit a strike or lockout if it is satisfied that the continuance of such a strike or lockout is causing serious hardship to the community or is prejudicial to the national interest. Government may, in addition, appoint or act itself as a special mediator in dispute resolutions; this is what government did in the case of the riot raised by the garments workers in Gazipur in May 24, 2006.
Modern Practices of Labor Management Relations
The larger employers of labor now have labor relations, or industrial relations, departments dealing with problems in the negotiation and administration of agreements. Such departments are usually divided into two branches, one responsible for day-to-day administration of agreements relating to wages and salaries, the other responsible for such matters as assignments to work, schedules of work, layoffs, promotions, discipline, grievances, and arbitration. Many international unions adapted their organizational structures to those of the principal companies with which they deal. These unions have specialists trained and assigned to deal with management specialists in matters relating to negotiations, grievances, arbitration, legal services, social security and welfare services, industrial engineering, economics, and public relations.
When the employees in a plant are not represented by a union, the terms and conditions of employment are usually determined by direct arrangements between plant management and employee. A union seeking to deal with an employer as the exclusive bargaining representative of its employees may try to persuade the employer to recognize it on the basis of authorization cards signed by a majority of employees in an appropriate bargaining unit and signifying the desire of these employees to be so represented. Failing such recognition, the union may file a representation petition with the appropriate federal or state agency. The agency will then proceed to determine the unit appropriate for collective bargaining and, if warranted, conduct a secret-ballot election among the employees in that unit.
Management is obliged to bargain in good faith with the union selected by the employees. The Labor-Management Relations Act requires that a notice of contract negotiations be given to The Federal Mediation and Conciliation Service and to the state mediation agency, where one exists. These agencies make available the services of their staff mediators to assist the parties in achieving agreement if their unassisted negotiations are not fruitful. Such services are optional; neither party to a negotiation is required to accept them. If agreement on contract terms cannot be reached through bargaining, the union is allowed to strike, except in certain industries, such as the railroads, in which strike action is delayed because a strike would be against the public interest. Most agreements provide for the filing of grievances by employees and by the union with respect to alleged violations of the agreement and require consideration of a grievance in prescribed time sequence by union and management officials with progressively greater authority. The agreements provide also that a grievance not so resolved may be appealed to arbitration for a final decision. A party to such an agreement may call upon federal and state courts to compel the other party to arbitrate.
Arbitrators of labor-management disputes are impartial, disinterested professionals chosen directly by the parties involved or selected from lists of nominees as submitted, for example, by the American Arbitration Association. In some instances arbitration is conducted by a board of arbitrators of which all members except a neutral chairperson with the deciding vote are interested individuals. Arbitration is conducted either by an arbitrator selected especially for a case or by an umpire, referee, or chairperson designated for the duration of the collective agreement. Arbitrators’ awards are enforceable, when filed, as judgments of a court of law, and may be set aside only for specific causes, such as lack of authority, fraud, interest, or misconduct by the arbitrator.
Dealings between most modern-day representatives of management and unions have been characterized by mutual respect, the product of years of negotiation and joint administration of agreements. This attitude of mutual confidence has fostered more cooperative labor relations than formerly prevailed. Labor-management arbitration has also contributed to industrial peace because it substituted the binding award of a respected neutral for the exertion of economic force during the term of a collective agreement. Although labor and management continue to differ on various economic problems, they generally realize that neither group can reach its goals without the assistance of the other.
By the mid-1980s the power of organized labor had decreased markedly. With more and more people employed in service occupations rather than in manufacturing, union membership declined—and so did union strength in labor negotiations. This process was exacerbated by other economic and political factors.
What is Trade Union
Trade Union means any federation of workmen of an establishment formed primarily for the purpose of regulating the relations between workmen and employers, or workmen and workmen, and safeguarding the rights and demands of the labors. In other words, an organization of workers created to protect and advance the interests of its members by negotiating agreements with employers on pay and conditions of work is called a trade union. Unions may also provide legal advice, financial assistance, sickness benefits and education facilities. Any definition, however, is limited by the changing horizons and the developing nature of the aims and objectives of Trade unions. But still, some attempt must be made to define the term ‘’Trade Union’’.
The nature of trade union varies due to the nature of the industry they exist. The role and objective also differ substantially due to changing working condition and very nature of the business. Trade Union is defined somewhat differently among different nations. To find a uniform definition is required for the better understanding of the followings:
• Understand why Union exist
• Evaluate the relationship between unions and consumers, society and government
• Current regulations, major laws and regulatory agencies, and what will be the impact on the consumers
• Understanding the collective bargaining process of the employees
To define what a trade union is by a single definition is a task almost impossible. The definition varies from author to author, organization to organization and country to country. Some important definitions of trade union are cited here:
DEFINITION PROVIDED IN THE BOOK –IQBAL AHMAD, “BASIC LABOR LAWS OF BANGLADESH”, 2ND EDITION, PUBLISHED BY FERDOUS IQBAL, PRINTED BY SALMANY PRINTING.
Trade Unions are the organizations which are engaged in protecting the rights of the labor force of the country. They are the registered unions which are devoted for the betterment of the workforce in the following aspects:
• Quality of Work Life (QWL)
• Legal Proceedings
• Resolving Industrial Disputes
• Working Conditions
• Welfare of the Workforce etc.
Trade Union movements are essential fro a country, especially for the betterment for the existing and potential workforce. Trade unions are the Collective Bargaining Agents (CBA) which speak for their rights.
DEFINITION ACCORDING TO THE INDUSTRIAL RELATIONS (NORTHERN IRELAND) ORDER 1992
Statutory Instrument 1992 No. 807 (N.I.5)
The Industrial Relations (Northern Ireland) Order 1992
Definition and status of trade union
3. — (1) in this Order “trade union” means an organization (whether permanent or temporary) which either—-
(2) A trade union shall not be, or be treated as if it were, a body corporate, but—
(a) It shall be capable of making contracts;
(b) All property belonging t the trade union shall be vested in trustees in trust for the union;
(c) It shall be capable of suing and being sued in its own name; whether in proceedings relating to property or founder on contract or tort or any other cause of action whatsoever;
(d) Proceedings for any offense alleged to have been committed by it or on its behalf may be brought against in its own name; and
(e) Any judgment, order or award made in proceedings of any description brought against the trade union shall be enforceable by order under the Judgments Enforcement (Northern Ireland) Order 1981, punishment for contempt or otherwise, against any property held in trust for the trade union to the like extent and in the like manner as if the union were a body corporate.
(3) A trade union shall not be registered as accompany under the Companies Order and accordingly any registration of a trade union under that Order (whenever effected) shall be void.
(4) A trade union shall not be registered under the Industrial and Provident Societies Act (Northern Ireland) 1969 or the Friendly Societies Act (Northern Ireland) 1970 and accordingly any registration of the trade union under either of those Acts (whenever affected) shall be void.
(5) The purposes of any trade union shall not, by reason only that they are in restraint of trade, be unlawful so as—
a) To make any member of trade union liable to criminal proceedings for conspiracy or otherwise; or
b) To make any agreement or trust void or voidable; nor shall any rule of a trade union be unlawful or unenforceable by reason only that it is in restraint of trade.
(6)Article 113 of the Judgment Enforcement (Northern Ireland) Order 1981 (sequestration order against company in contempt) shall apply to a trade union as it applies to a company.
DEFINITION OF TRADE UNION BY “THE CANADIAN LEGAL INSTITUTE”
In this Act, “trade union” means such combination, whether temporary or permanent, for regulating the relations between workmen and masters, or for imposing restrictive conditions on the conduct of any trade or business, as would, but for this Act, have been deemed to be an unlawful combination by reason of some one or more of its purposes being in restraint of trade.
BIZ/ED DEFINITION OF TRADE UNION
A trade union is an organization which represents workers. Trade unions aim to:
• Improve the pay of workers
• Improve working conditions and secure longer holidays.
• Protect members’ jobs.
• Provide local, social and welfare facilities.
• Influence government policy by sponsoring Members of Parliament and contributing to the political parties.
Each trade union has its own internal organization. Generally:
• Small groups of workers elect a local spokesman (shop steward)
• Every area has a branch which sends delegates (representatives) to a yearly national conference.
• Conference passes resolutions (policies) and elects a national executive. Only the national executive can call an official strike.
• The entire membership elects a general secretary. He general secretary acts as the union’s spokesman and manages everyday affairs, usually until he reaches retirement age.
DEFINITION OF TRADE UNION ACCORDING TO “THE CANADIAN LABOR LAW”
A trade union which is recognized by a labor board under the laws of Canada or any province or territory of Canada and which has its head office in Canada.
There can be a hundred other definitions as well. But most important thing is to recognize the core concept behind trade unions – how they came into being and which need had been the driving factor behind the creation of the trade unions.
Features of Trade Union
Types of Trade Union
1. Craft Union: Represents skilled workers from one occupation
2. General Union: Represents mainly unskilled workers from many occupations
3. Industrial Unions: Represents mainly workers from one industry
4. Professional/White-Collar Unions: Represents skilled workers in mainly service industries
Functions of Trade Union
• Improve the pay of the workers
• Improve working conditions and secure longer holidays
• Protect members’ jobs
• Provide local, social and welfare facilities
• Influence government policy by sponsoring Members of Parliament and contributing money to the political parties
Organization of Trade Union
Each trade union has its own internal organization. Generally:
• Small groups of workers elect a local spokesman.
• Every area has a branch, which sends delegates to a yearly national conference.
• Conferences pass resolutions and elect a national executive. Only the national executives can call an official strike.
• The entire membership selects a general secretary. The general secretary acts as the union’s spokesman and manages everyday affairs, usually until he reaches retirement age.
The Overall Objectives of Trade Union
Although different organizations have different trade unions but their objectives are more or less same.
• To secure the social and economic right of each and every member of the union and work for sustaining the above mentioned rights.
• To work for improving the working conditions of the organization.
• To settle the matter relating to wages and other job conditions.
• To safe guard the interest of the workers both from the management and outside parties.
• To retain the harmonic relationship among the workers both from the management and workers community.
• To regulate the relationship among the workers. In case of any dispute among the workers, try to solve the problem without the intervention of the third party.
• To support the workers in case of accident, injury, inability to work due to senility.
• To help the workers to get the retirement benefit.
• To extend financial help during hartal called by the union and lockout on the part of the employer.
• To provide financial help to the member who is exploited for working for the interest of the workers.
• To maintain a congenial relationship with the employer and management for the greater interest of the workers.
• To grow awareness among the workers for their role to the organization and society as well as to the country.
• To fix up the membership fee and other matters relating to raising fund and to make policy for the effective utilization of the fund.
• Full employment and the raising of living standards.
• Facilities of training policies in regard to wages, hours of work and other conditions of work calculated to ensure a just share of the fruits of progress to all.
• The effective recognition of the right of collective bargaining.
• The co-operation of management and labor in the continuous improvement of productive efficiency, and
• The collaboration of workers and employer in the preparation and application of social and economic measures, the extension of social security measures to provide a basic income to all in need of such protection and comprehensive medical care, etc.
• The right for workers to equal opportunities and equal treatment in matters of employment and occupation without discrimination on the ground of sex;
• The right for workers to be informed and consulted within the undertaking;
• The right for workers to take part in the determination and improvement of working conditions and the working environment in the under taking.
History of Trade Union
The traces of trade unions’ existence could be traced from the eighteenth century, when Western society (with most changes occurring earliest in Britain) witnessed a transformation from an agrarian culture with craft-based production to a culture shaped by the first industrial revolution. Some of the changes brought on by this new order, such as new work methods and downward pressure on traditional wage structures, sparked rising alarm in the crafts and guilds of the time, who feared encroachment on their established jobs.
The rapid expansion of industrial society was to draw women, children, rural workers, and immigrants to the work force in larger numbers and in new roles. This pool of unskilled and semi-skilled labor spontaneously organized in fits and starts throughout its beginnings, and would later be an important arena for the development of trade unions.
Trade unions have sometimes been seen as successors to the guilds of medieval Europe, though the relationship between the two is disputed. Medieval guilds existed to protect and enhance their members’ livelihoods through controlling the instructional capital of artisanship and the progression of members from apprentice to craftsman, journeyman, and eventually to master and grandmaster of their craft. They also facilitated mobility by providing accommodation for guild members traveling in search of work. Guilds exhibited some aspects of the modern trade union, but also some aspects of professional associations and modern corporations.
Additionally, guilds, like some craft unions today, were highly restrictive in their membership and included only artisans who practiced a specific trade. Many modern labor unions tend to be expansionistic, and frequently seek to incorporate widely disparate kinds of workers to increase the leverage of the union as a whole. A contemporary labor union might include workers from only one trade or craft, or might combine several or all the workers in one company or industry.
The National Labor Union was the first national union in the United States. It was created in 1866 and included many types of workers. This union did not accomplish any significant gains. After this union crumbled, the Knights of Labor became the leading countrywide union in the 1860s. This union did not include Chinese, and partially included blacks and women.
The Knights of Labor was founded in the United States in 1869. Eventually over 700,000 workers joined the Knights. They opposed child labor and demanded the eight-hour day. They hoped their union would give workers “a proper share of the wealth they create,” more free time, and generally more benefits of society. They also tried to set up companies owned by the workers themselves. Although the Knights were against strikes, some radical members went on strike anyway when the railroads cut wages in 1884. After they won the fight, membership in the Knights boomed to 700,000, but then, at the time of the Haymarket Massacre, a fearful public opinion grouped them with anarchists and Communists, and membership then rapidly declined.
The American Federation of Labor (AFL) was founded by Samuel Gompers. By 1904, AFL-affiliated unions had a membership of over 1.4 million nationwide. Under Gompers’s leadership, the AFL advocated an approach known as “business” or “pure and simple” unionism, which emphasized collective bargaining to reach its goals. Demands were centered on improvements to the immediate work environment, like better wages, hours and working conditions.
In France, Germany, and other European countries, socialist parties and anarchists played a prominent role in forming and building up trade unions, especially from the 1870s onwards. This stood in contrast to the British experience, where moderate New Model Unions dominated the union movement from the mid-nineteenth century and where trade unionism was stronger than the political labor movement until the formation and growth of the Labor Party in the early years of the twentieth century.
Trade Union Movement organized activities of workers to improve their workers to improve their working conditions. In the early stage of industrial development when there were personal contacts between employers (master) and employees (workers), there was no need of any organization to determine relations between the two. But under the modern factory system the personal touch is absent and the relations between the employer and the worker have come under strain. The conflict of interests between buyer and seller of labor power has become conspicuous and this has led to the rise trade union movement throughout the world.
Trade Unions take their place within the labor movement, which consists of several or more or less intimately related organizations, producers’ or consumers’ co-operatives and workers’ education and sports associations. All have the common objectives to improve the material, cultural, and social status of their members. Trade unions have a particular function in this, but relationships between the various parts of the labor movement vary from country to country and from period to period. Trade union movement was created and developed to meet human, economic, and political needs and aspirations, varying from region to region, country to country, and from continent to continent. There was no overall plan, and there are universally accepted models for the individual union, the national center, the international federation of industry based unions or the global and regional organizations of trade unions. These bodies display no single pattern of development, structure, organization or objective. The movement is a living organization in a continuous state of flux which develops, merges, and separates while responding to economic and political pressure. Through the courses of time it has been possible to trace the interaction between local, national, international changes on structure, objectives, and affiliations at all levels of the trade union movement.
Outbursts of economic activity; depressions, national or worldwide; wars, especially world war I and II, the Bolshevik Revolution in Russia and the establishment of the communist states; the rise of fascism in Europe; the evolution of political thought; all these have had their impact on the development of trade unions. The effects of these events have been to mould the workers’ protective organizations in many ways but always in order adequately to defend and further what they regard as their rights within society.
Trade Union Movement in Bangladesh
The tradition of parallel development of the nationalist and the trade union movement, which had originated in British India, continued through the Pakistan period down to the birth of Bangladesh. Trade union activity in Bangladesh has a long and at times, bloody history, leading back to the revolt by tea plantation workers in 1920-when the country was still a part of British rules India and the formation of the All India Trade Union Congress in the same year. The East Pakistan Trade Union Federation was formed following the creation of Pakistan in 1947, and split into five factions shortly before the independence of Bangladesh in 1971.
For the first time in India the Bombay Mill Hands association was formed on 24 April, 1980. This gave impetus to the trade union movement in British India. The establishment of ILO in 1919 provided a source of inspiration for the workers to organize themselves and shape their destiny. India’s membership of the same exerted great influence in the formation of a central organization of workers called “All India Trade Union Congress (AITUC) in 1920 for the purpose of conducting and co-coordinating the activities of labor organizations.
The Period from 1924-1935 may be considered as the era of revolutionary trade union movement. MN Roy, Muzaffer Ahmed, SA Dange and Shawkat Osmani led the trade union movements and as a result the political consciousness among industrial workers increased. To control the movement, the British government adopted ruthless measures (eg. Kanpore Conspiracy Case and Meerat Conspiracy Case) against the militant workers and trade union leaders, but no strategy could suppress the trade union movement; rather the colonial resistance invigorated the movement against the colonial power. Later, the trade union movement was closely linked with nationalist movements and the working class started vigorous struggle for emancipation from extreme repression and economic exploitation by the colonial regime.
Long before the partition of India, there was a trade union movement in the cotton textile industry areas. Immediately after the creation of Pakistan, the All India Trade Union Congress (AITUC) initiated a trade union federation in East Pakistan under the leadership of trade unionists. Although Pakistan was one of the first states which ratified the International Labor Organization (ILO) Conventions No. 87 and 98, its workers were deprived of the right to collective bargaining and the right to strike. The Industrial Dispute Act 1947 of India was adopted in Pakistan with some amendments until 1959, when worker’s rights were further curtailed by the Industrial Dispute Ordinance, promulgated by the martial law authority. Between 1965 and 1969, the East Pakistan Labor Dispute Acts was mainly responsible for regulating industrial relations.
At the time of partition of Bengal (1947), most trade union leaders were Hindus. On their migration to India, a leadership void was created in the trade union movement of Pakistan, especially in East Pakistan. There were less than 75 registered trade unions in the whole of Pakistan compared to 1,987 in the undivided India in 1946. The larger share of this small number of trade unions fell to West Pakistan leaving East Pakistan with only 141 factories, 28,000 workers and 30 unions of 20,000 members.
During Pakistan period most trade union leaders held conflicting views and the trade unions were fragmented and weakened. As a result, the trade union movements met a setback and the trade union activities passed into the hands of petty bourgeoisie leadership. Moreover, the trade union movement in Pakistan was characterized by the fragmentation of unions, prolonged strikes, retaliatory lockouts and picketing, which sometimes led to violence.
In 1969 a new regime promptly promulgated The Industrial Relations Ordinance which classified disputes as either matter of ‘right’ or as matter of ‘interest’. On matters of right, guaranteed by existing labor laws, disputes were banned, although in practice the ban was ineffective. On matter of Interest, workers were for the first time given a limited right to strike. Although the government could prohibit strikes in the public service, strikes were allowed in non-public utility services for 30 days, after which the government could ban the strike and refer the dispute to the court for adjudication.
As the trade union movement in Bangladesh originated in British India and Pakistan, it naturally retained its old character of working more as a nationalist force against colonial domination than as a class force vis-à-vis capitalist exploitation. As a result, the trade union movement of the region that has gained momentum in the hands of political leaders stood divided along the political and/or theological lines in independent Bangladesh.
After 1971, most industries and services were nationalized. The Industrial Relation Ordinance 1969 continued to govern industrial relations, but labor management relations were often more turbulent. On 24 December 1974 the government declared a state of emergency, disbanding all political parties, banning strikes and lock outs and restricting trade union activities; the conciliation machinery of the Labor Ministry and the industrial courts were maintained. However, President Ziaur Rahman (1976-1981 in power) adopted a policy in the late 1970s for a return of substantial part of the nationalized sector to private ownership.
After a decade of disturbed political conditions, power was assumed in April 1982 by Gen. Hussain Mohammad Ershad, the Army Chief of Staff. General Ershad, in June 1982, announced a major program of decentralization. Parliamentary elections which were held in 1986 but which were boycotted by one of the main opposition grouping resulted in an overall majority in the unicameral parliament for the pro-government Jatiya Party. Following further industrial and political unrest a state of emergency was declared in November 1986, while subsequent controversial parliamentary elections in March 1988 – boycotted by the principal opposition parties again produced an overwhelming jatiya Party majority. In December 1990 Ershad government was thrown out by a mass movement, especially guided and dominated by the student forces. Eventually, a fairly elected democratic government took over the power through the national pole in February 1991. A parliamentary government headed by the leader and chairperson of Bangladesh Nationalist Party (BNP), Begum Khaleda Zia assumed the power and continued to exercise it for the consecutive three and a half year. Then alike the past scenario, a political unrest upsurges the whole country led by the opposition leader Sheikh Hasina, chairperson of Bangladesh Awami League and daughter of Bangabandhu Sheikh Mujibur Rahman. Another national pole took place in 1996 which put Bangladesh Awami League in power.
During this period, the trade union movement was marked by direct interference by the government and the ruling party in its internal affairs. In many industrial belts, terrorism was set loose by the men of the labor front of the then ruling party. They tried to drive out the honest trade unionists from the leadership of the unions. Outsiders were barred from trade union leadership at the basic union level thus making the process of union high jacking very easy. It also succeeded in turning the workforce into a very defenseless and weak community.
Until 1975, Trade Unions were mainly at plant level, though there were loosely organized industrial federations. At the end of May 1975 there were about 3230 registered trade unions, including 21 industrial federations and 173 employers’ organizations. There were constant struggles between rival unions and federations which often led to violence.
In the early 1980’s, the military government of Bangladesh banned all trade union activities in the country. Then an alliance of the National Federation of Trade Unions (NFTUs) emerged in the name of Sramik Karmachari Oikka Parishad (SKOP) to establish the democratic rights of workers as well as to fulfill their economic demands. Most NFTUs were in SKOP and since 1983, most trade union movements in Bangladesh have been organized under the leadership of SKOP.
The opportunism and lenient attitude of the trade union leaders including SKOP gave the ruling regimes a chance to disregard the agreements signed between the government and the trade union leaders. At present, the leaders of nineteen of the twenty three NFTUs are included in the SKOP. After its formation, SKOP submitted a 5-point charter of demands for establishing their democratic rights and higher wages through rallies, torch processions, demonstrations, strikes, blockades, etc.
Ironically, SKOP failed to yield any tangible results for the working class people of this country. The effectiveness of the trade union movement under the leadership of SKOP gradually weakened because most SKOP leaders have political affiliations and therefore cannot escape the influence of their respective political parties. Moreover, lack of political support to SKOP’s programs, excessive pressure on the government by private employers and donor agencies to disregard SKOP’s demands using repressive measures to disrupt the trade union movement. Forcible occupation of unions, bribing of trade union leaders, opportunistic and compromising attitude of the union leadership rendered the SKOP demands ineffective. In fact, SKOP has become a dilapidated forum of the working class with little to offer to the country’s future trade union movements.
RIGHTS OF ASSOCIATION
Pakistan ratified ILO Convention No. 87 (freedom of Association and Protection of the Right to Organize, 1948) in 1951, and Convention No. 98 (Right to organize and collective Bargaining, 1949) in 1952; Bangladesh in turn ratified both conventions in June 1972. However, the rights assured by these conventions has been continuously threatened or weakened by the implementation of contradictory national legislation, at times under conditions of martial law.
In practice, a high degree of union activity appears to have persisted throughout the last 40 years regardless of the edicts of military and other governments, often serving as a vehicle of political dissent. In recent years, the imposition of martial law did not suffice to stifle union activities. Restrictions imposed on trade unions in 1982 were replaced in 1983. A further ban on union activities on March 1, 1985 was lifted as of January 1, 1986. But according to the World Confederation of the labor in 1986, the authorities has adopted an authoritarian and repressive attitude to the majority of autonomous and independent organizations, whist on the other hand they remain tolerant to forces which identify themselves to the government.
The ILO report on of the Committee of Experts of the Application of Conventions and Recommendations (1985) noted that under the industrial relations ordinance of 1969, as amended in 1980, supervisory staffs are barred from union membership, although Article 9 of ILO Convention 87 states that only police and armed forces may be excluded from its scope. There are also restrictions on the rights of workers to belong to unions of their own choosing, especially for public servants, whose association may not participate in any political activity. The report noted in respect to public servants that only employees of the railways, post and telecommunication may form trade unions. The 1969 ordinance also allows the registrar to cancel the registration of a trade union if the number of members is below 30% of the workers of the establishment or group of establishments for which the union was formed.
The report also noted that under the Essential Services (maintenance) Act of 1952 (supplemented by similar legislation of 1958), it is an offence punishable by up to one year in prison for any person employed by the central government to terminate his employment without the employers consent, and that this provision was apparently used with some frequency to inhibit employees from leaving their employment.
Many of these observations reappear in the ILO report of the Committee of the Experts of the Application of the Conventions and Recommendations (1988). The Committee noted that its recommendations for the repeal of the Essential Services (Maintenance) Act, 1952 have yet to be implemented in full. It draws the attention of the government of Bangladesh to its obligations under ILO Convention No. 29, which it ratified in 1972, and points out that “even regarding employment in essential services whose interruption would endanger the existence or the well being of the whole or part of the population. There is no basis in the convention for depriving workers of the right to terminate their employment by giving notice of reasonable length.
As concerns Bangladesh’s obligation under ILO Convention No. 87, the report notes that the practice of supervising trade union records, including its finances, by governmental authorities is compatible with the right of workers to organize their internal administration. The committee has recommended to the government that it limits these powers to bring them into conformity. In addition, the committee has also asked the government to review its existing powers.
Perceptions about Union
From a popular point of view, trade unionism is a simple, definite phenomenon upon which it is easy and safe to pass positive and sweeping judgments. Almost everyone- the man in the street, the lawyer, the economist, the social worker, the teacher, the preacher – each has his concept and scheme for union control. Thus, one who is seeking the truth about unionism is faced at the outset with a mass of absolute but contradictory interpretations. He is told that unionism is a narrow group organization designed to benefit certain favored workmen at the expense of all others; that it is an artificial monopoly of labor, an impossible attempt to raise wages by unnatural and therefore socially inimical means; that it is the creation of selfish and unscrupulous leaders for their personal gain.
Proponents often credit trade unions with leading the labor movement in the early 20th century, which generally sought to end child labor practices, improve worker safety, increase wages for both union workers, raise the entire society’s standard of living, reduce the hours in a work week, provide public education for children, and bring of other benefits to working class families.
The healthy industrial relations are key to the progress and success. Their significance may be discussed as under –
The most important benefit of labor management relations is that this ensures continuity of production. This means, continuous employment for all from manager to workers. The resources are fully utilized, resulting in the maximum possible production. There is uninterrupted flow of income for all. Smooth running of an industry is of vital importance for several other industries; to other industries if the products are intermediaries or inputs; to exporters if these are export goods; to consumers and workers, if these are goods of mass consumption.
Reduction in Industrial Disputes
Good labor management relations reduce the industrial disputes. Disputes are reflections of the failure of basic human urges or motivations to secure adequate satisfaction or expression which are fully cured by good industrial relations. Strikes, lockouts, go-slow tactics, gherao and grievances are some of the reflections of industrial unrest which do not spring up in an atmosphere of industrial peace. It helps promoting co-operation and increasing production.
Good labor management relations improve the morale of the employees. Employees work with great zeal with the feeling in mind that the interest of employer and employees is one and the same, i.e. to increase production. Every worker feels that he is a co-owner of the gains of industry. The employer in his turn must realize that the gains of industry are not for him along but they should be shared equally and generously with his workers. In other words, complete unity of thought and action is the main achievement of industrial peace. It increases the place of workers in the society and their ego is satisfied. It naturally affects production because mighty co-operative efforts alone can produce great results.
The main object of labor management relation is a complete mental revolution of workers and employees. The industrial peace lies ultimately in a transformed outlook on the part of both. It is the business of leadership in the ranks of workers, employees and Government to work out a new relationship in consonance with a spirit of true democracy. Both should think themselves as partners of the industry and the role of workers in such a partnership should be recognized. On the other hand, workers must recognize employer’s authority. It will naturally have impact on production because they recognize the interest of each other.
Good labor management relations are maintained on the basis of cooperation and recognition of each other. It will help increase production. Wastages of man, material and machines are reduced to the minimum and thus national interest is protected.
Thus, it is evident that good labor management relation is the basis of higher production with minimum cost and higher profits. It also results in increased efficiency of workers. New and new projects may be introduced for the welfare of the workers and to promote the morale of the people at work. An economy organized for planned production and distribution, aiming at the realization of social justice and welfare of the massage can function effectively only in an atmosphere of industrial peace. If the twin objectives of rapid national development and increased social justice are to be achieved, there must be harmonious relationship between management and labor.
Objections against Union
Opposition to trade unions comes from a variety of groups in society and there are many different types of argument on which this opposition is based. Attempts to reduce the effects of trade unions may include union busting activities by private companies or state action, especially, during the twentieth century, by governments of authoritarian regimes such as Adolf Hitler’s Nazi party and Burma’s military dictator, Ne Win. Political or ideological arguments against trade unionism have been advanced by neo-liberals, Libertarians, and Conservatives, as well some schools of Nationalism, Socialism, Communism and Anarchism. A distinction may be drawn between absolute opposition to trade unions and opposition to specific practices associated with trade unions.
By raising the price of labor, the wage rate, about the equilibrium price, unemployment rises. This is because it is no longer worthwhile for businesses to employ those laborers whose work is worth less than the minimum wage rate set by the unions. As such, Governments may seek to reduce union powers in order to reduce unemployment.
Trade unions are often accused of benefiting the insider workers, those having a secure job and high productivity, at the cost of the outsider workers, consumers of the goods or services produced, and the shareholders of the unionized business. The ones that are likely to lose the most from a trade union are those who are unemployed or at the risk of unemployment or who are not able to get the job that they want in a particular field.
While the disadvantage to exceptional workers, who are forced to take lowest common denominator pay, is obvious, as they could have commanded higher wages by themselves, union contracts also harm inexperienced or below-average workers, as they cannot negotiate lower pay in order to be worth hiring while they seek to improve their skills and experience. Getting a first job in a union industry therefore sometimes becomes a matter of “who you know”, shutting out many people who could otherwise start a career in the occupation.
Some union-negotiated contracts may impose limits on companies’ power to dismiss their employees. In cases where a company needs to dramatically restructure, this can result in more layoffs than would otherwise be necessary, or in extreme cases, a company filing for bankruptcy.
Where closed shops or union shops have been established, unions can become monopolies, where the worker is not allowed to choose not to belong and the company is not allowed to hire non-union workers. This can result in the same problems faced by any other monopoly. By charging higher prices than the equilibrium rate, unions promote deadweight loss.
Negative salary effects
Unions prevents workers from negotiating their own pay, making them settle for “lowest common denominator” wages which may represent the minimal value of a worker of their tenure. Some believe, furthermore, that promotions (and even full-time positions) in a union workplace are typically given by seniority only, with little or no regard to qualifications.
Unions can force workers to take specific benefits instead of higher pay, again because of the collective contract. If a worker does not need his employer’s health insurance, or does not want to take a five-minute coffee break every hour, and be paid more in return, the worker has no recourse.
Some believe that a union becomes a mere middleperson where the worker is forced to pay in to the union to obtain a job, which the worker might have been able to negotiate as an individual. This is not the case in some countries, like the United States, where an employer may not lawfully agree with a union to hire only union members.
Harm to ununionized labor
Advocates of unions claim that the higher wages that unions bring come at the expense of profits. However, profits aren’t high enough. Profits are invested leading to an increase in capital: which raises the value of labor, increasing wages. If profits were totally removed, this source of wage increase would be removed.
Instead of harming profits, unions increase the wages of about 10 to 15% of workers by about 10 to 15% by reducing the wages of the other 85 to 90% of workers by about 4%. However, Austrian economists dispute this, arguing that the increase in the cost of labor simply means that less of other goods can be bought.
However, Austrians are a minority force in economics, and Governments may seek to reduce the powers of unions to restrain inflation.
By causing wage increases above the market rate, unions increase the cost to businesses, causing them to raise their prices, leading to a general increase in the price level. But some economists argue that the increase in the cost of labor simply means that less of other goods can be bought.
If unions succeed in wage hikes, and employers raise the prices they charge consumers to maintain their own profit margins, and the supply of money remains the same, then something else has to “give.” Either the prices of goods and services in nonunion sectors have to fall and offset the union sector hikes, or people’s cash balances need to fall, in terms of their purchasing power.
The effect of union activities to influence pricing is potentially very harmful, making the market system ineffective. By raising the price of labour, above the market rate deadweight loss is created. Additional non-monetary benefits exacerbate the problem.
One “benefit” of unions sometimes cited by corporate advocates is that unions impose uniformity and predictability on workers. Corporate management often negotiates in secret with union management rather than directly with employees. Many unions have pro-democracy factions which seek greater rank and file involvement in the process of running the union, but such efforts often face a significant challenge.
Many people feel that unions tend to act in their own interests rather than in the interests of their members. For example, a union may be doing actions for purposes of increasing its membership that existing union members may not approve of.
A consequence of unions’ zeal to guard its special interest is that some unions have actively lobbied for racist and anti-immigration policies. An example is the creation of the notorious Asiatic Exclusion League, which was composed mainly of the various labor unions.
Most blacks were barred from membership in the AFL not because of their skin color, but because they never had a chance to learn a skill, and “most A.F. of L. unions did not admit unskilled mass-production workers. While the AFL-CIO is the modern version of the AFL, it is much more open to membership by women, immigrants, and different nationalities.
Other unions, such as the Industrial Workers of the World, which was formed in 1905, organized without regard to sex, skills, race, creed, or national origin from the very start.
Political aspects of unions
Some individuals believe that unions focus too much on politics and do not focus adequately on negotiating good collective bargaining agreements for their members. Unions are sometimes accused of holding society to ransom by taking strike actions that result in the disruption of public services. A significant number of unions in the United States, including the UFCW — which is affiliated with the Change to Win Federation — and many unions in the AFL-CIO, openly endorse the Democratic Party, and have often endorsed the Democratic candidate. Thus union members that are politically conservative and/or Republican may believe that their interests are not recognized by these unions.
Specific countries, especially countries run by Communist parties, while still having unions in name, do not allow for independent trade unions. These state-run trade unions do not function in the same way as independent trade unions and generally do not hold any kind of collective bargaining power, acting to ensure the smooth running of Government industry.
Left critiques of trade unionism
The political left is often associated with support for trade unionism; however, some groups and individuals have taken a less positive view. In the nineteenth century, a belief in the iron law of wages led some socialists to reject trade unionism and strike action as ineffective. In this view, any increase in wages would lead manufacturers to raise prices leaving workers no better off in real terms. Karl Marx wrote a pamphlet, Wages, Price and Profit, to counter this idea.
Some early Social Democrats were also skeptical of trade unionism. Usual criticisms were that unions split workers into sections rather than organizing them as a class; that they were dominated by relatively privileged skilled workers who were mainly concerned to defend their sectional interests; and that industrial action and organization were incapable of bringing about fundamental social change. Hyndman went on to urge workers to devote “the Trade Union funds wasted on strikes or petty funds” instead to the building up of a strong Socialist Party on the German model. Other social democrats however were more convinced than Hyndman of the utility of Trade Union action.
Trade unionism is criticized by council communist and left communist tendencies. Here, trade unionism is seen as being more useful to capitalists than to workers, and as a kind of “safety-valve” that helps to keep working-class discontent within reformist channels and prevent it from evolving into revolutionary action. In contrast to other left critiques of trade unionism, these tendencies do not accept that the problems they identify could be remedied by changing the structure, leadership or objectives of trade unions. Instead, they argue that trade unionism is inherently reformist and that revolutionary action is possible only if workers act outside trade unionism through workers’ councils or other channels.
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