GSBS6042 Employment Relations: The Importance of Trade Unions

Introduction 

As per De Sousa (2012) trade union can be defined as a group or association of workers in which the workers associate in order to represent their interests or goals. The importance of trade unions for the employees is that their members tend to have higher wages as compared to those who are not associated with the trade unions.

The trade unions act as representatives for the workers in the context of legal matters. They also protect the rights of workers. They are the main means of organizing and safeguarding the rights of workers regarding their jobs. The collective bargaining agreement which is also known as the union contract formulates the basic terms and conditions of work (Lillie, 2013). 

The union helps in giving voice to the workers and provides them with a mode to gain a measure of integrity and security on the job. Certain strategies are pursued by the unions which serve the interests of the members (Emmenegger, 2014).

These include representations of the members and bargaining with the employers and hiring new people. It also comprises of involving in political action and supporting policies for improving the working conditions of the employees.

The unions are formed by the workers so that they are authorized to say over the workers, hours of work, working conditions and many problems which arise in the relationship between the employers and workers (Fernie, 2013).

According to the opinion of Chalmers (2013) trade unions are important as they assist in setting standards for the level of skills, required education, wages, working conditions and quality of life being led by the workers. Laws are also established by the unions which work for the improvement of the conditions of a job for their members.

Workers have less power when they work on their personal level. So, acting together in a group can have a real impact on the desired changes to be made in their favor.  The trade unions act as a collective voice for the workers. They act a watchdog for the workers and use their authority for making sure that the rights of the workers are safeguarded under the law.

So, this literature review critically argues on the contribution of the trade union movement for the growth level of economic, organizational and personal growth of employees with the help of certain examples from various countries.  

Analysis

Trade unions employ collective bargaining for the benefit of workers. They can help in the economic, organizational and personal growth of employees in the following ways.

Employees growth level

As per Kaufman and Bennett (2017) trade unions have an enormous impact on the labor market and societies. They assist the workers in placing their demands in front of the management while avoiding conflicts. One of the benefits of being associated with the trade unions is that the workers can initiate for collective bargaining with the management along with participating in the training and leisure events at the workplace.

The trade unions are known to promote wellbeing at work. They manage all the issues confronted by the workers at work. They do not charge anything from the organizations and reduce the stress level of the employees. They improve the work-life balance of the workers and increase their overall wellbeing.

It was further supported by Freeman and Han (2012) .According to their  opinion, when the employees have an effective voice and they have the ability to transform things at the workplace such as safety and health, improving the supervisor’s attitude, then there are more likely to stay at the company. It would directly affect the development of the organization.

So according to these two scholars, there is a positive impact of the collective bargaining on absenteeism of the workers.  Therefore, trade unions help in the growth of the companies. Trade unions also encourage the participation of the workers as shareholders.

According to a survey, the perception of the workers towards the quality of work is more positive in the companies where the trade unions act as their representative. It is crucial for all the employers of all the sectors as high work quality can result in better productivity and less labor turnover (Bosch, 2015).

According to the opinion of Alberti, Holgate and Tapia (2013), it can create influence on the entire society surrounding those, thereby making propositions for developing the legislation regarding their workplace. The members of the trade unions are entitled to a secure future with regards to employment and membership advice and availing the services of a lawyer and legal information.

The workers can also seek advice related to the generation of earnings upon their unemployment and assistance of a shop steward at the workplace. They are also entitled to free of cost membership and leisure activities such as cottages, holiday shares, discounts on trips and insurances (Hyman, 2012).  

The trade unions also represent the interests of the members in the private sector such as retail trade, tourism, leisure time industry, tourism and restaurant, personal care and security services. The members are provided with assistance and security during their work period (Fossum, 2014)  .

As per Meardi (2012), the unions also verify that proper wages are paid to the workers and whether the collective agreement is being followed at work. For example, in Finland , it is considered normal for the employees to join the trade unions. In Finland, the Finnish trade union is the main organization which represents the interest of around one million workers from 20 trade unions in the country.

The trade union safeguards and promotes the mutual interests of the employees with the help of collective action. With the help of its leadership, it negotiates with the employers and the management on issues such as labor contracts etc. Thus union representation and collective bargaining are the keys to the growth of workers (Marginson, 2015).

The unions help the workers to gain an equal share in the wealth they create, thereby improving their working conditions and assisting them in gaining job security. They help in transforming the political, social and educational environments which are associated with the rights of the workers. It includes the right to bargain, right to organize and the right to settle the terms and conditions of employment (Culpepper and Regan, 2014).

The factors such as the establishment of minimum wages, norms for mandatory working hours and improvement in the working conditions and provisions for health and safety have led to the improvement in the quality of life of the employees (Richardson, 2013).

The trade unions help in the greater bargaining power of the workers.  As individuals, the workers have less bargaining powers and they cannot negotiate with the employer alone. They would be in a safer situation if they join the unions.

Thus unions are powerful mediums which compel the management to accept the demands of the workers in order to create better working and employment conditions. Moreover, the trade unions help in minimizing discrimination done by the employers towards their employees (Krueger, 2012).

As per Turner and D’Art (2012) discrimination is done on the basis of caste, sex and religion. The trade unions oppose against discrimination done by the employer and force the management for equal treatment of all the workers in the organization.

McBride (2018) believes that decisions regarding the labor are monitored by the labor unions which create a positive impact on minimizing the discrimination. The trade unions also develop a sense of security amongst the workers. They help the employees to safeguard themselves against accidents, ill health and unemployment.

The unions also help in getting the retirement benefits of the workers and compel the management for investing in the welfare schemes of the workers. The trade unions also conduct various researches pertaining to campaigns and procedures for their members (Aspinwall and Greenwood, 2013).

With the help of collective bargaining, the disadvantaged workers get a premium pay. For example, in USA, black women get a premium of 34% if they are associated with the trade unions. In this way, the trade unions help the employees to get better work conditions and pay so that they remain satisfied with their jobs. It would further motivate the employees for working hard thereby contributing to the success of the organization (Tapia, 2013).

As per Clauwaert and Schömann (2012) the trade unions also increase training in the workplace. As per the study in Scotland, it has been observed that almost half of the employees associated with unions believe that they would like to undertake training if it is organized through unions. In cases where unions negotiate overtraining, 24% employee reported that they would like to receive training at work.

They further ensure that safety and health regulations exist in the company and they have the accessibility to a working environment which is safe. The trade union also executes the contract of collective agreements which affects the relationship between the members and the signatory parties (Egels-Zandén and Merk, 2014).

There are certain regulations in The Sultanate of Oman which regulates and manages the provisions regarding the labor laws. Inspection of labor is amongst the significant responsibilities of the Labor division of the Ministry of Manpower. At the central level, it is managed by General Directorate of Labor Care (GDLC) ( Global Legal Group,2018).

Six departments are controlled by GDLC viz. Trade Unions, Office of Joint Inspection, Labor Inspection, Occupational Health and Safety, Labor dispute settlement and Labor Services. So the existence of the concept of trade unions in the Omani Law further strengthens their authority in the industrial sector (International Labor Organization, 2018).

In respect of the Ministerial Decree No.95/2012, the regulation governs the creation, registration and execution of activities of the labor trade unions and the General Federation of Oman Trade Union (International Labor Organization, 2012).

The accountabilities of the trade unions are increasing in the current scenario but it has also been observed that the actual involvement of the labors is still limited to a certain extent. The trade unions sometimes lack the knowledge and experience for representing their members authoritatively (Roy, 2014).

Although the Labor Conventions No.81 and 129 have not formerly consented in Oman its government has complied with the labor laws regarding the establishment of trade unions in an appropriate manner. It ensures greater protection of the rights of the workers at their workplaces (International Labor Organization, 2017).

Organizational growth level

The workers associate with the trade unions to make sure that the management deals with them in a just and fair way on the basis of a predetermined policy.They help in nurturing a long-term relationship with the employer on the basis of four pillars named as employee satisfaction, commitment and belongingness towards the company.

If the employee is satisfied and motivated, then he will surely contribute towards the productivity and development of the company in a better way. The issue of improvement in the productivity of labor has assumed a greater importance with globalization along with economic and social crisis (Viner, 2014).

According to research in Canada, the insurance claims arising from the building sites have a link between trade unions and safety arrangements. Low claims were received from the companies where there was a prevalence of the trade unions (Gumbrell-McCormick and Hyman, 2013).

The members of the trade unions are more loyal to their employers. According to a theory of Albert Hirschman, if the workers are not satisfied with the company and they cannot change or leave it, then there is a higher rate of absenteeism in that company.

Thus the workers are eligible for sharing profits and become partners of the company. It ensures their total involvement and participation in the decision making for maximum production along with maintaining harmony at the workplace (Schnabel, 2013).

In this way, the trust and commitment can be encouraged amongst the workers. In Oman, the employers sought a resort through the trade unions for facilitating their communication amongst employers and employees.

It has also been argued by Holst (2014) that better governance systems and transparency can facilitate sustainable growth and poor workers should be encouraged to participate for their benefit. Trade unions promote gender equality in the socio-economic policies in order to secure equal opportunities and treatment for females.

With the help of trade unions, the employers can communicate information about the policy of the companies and other matters such as work and safety. The trade unions can thus disseminate the information to all the members thereby resolving the issues between both of them and contributing to the growth of the company (Chan and Hui, 2014).

In this regard, employers have taken various approaches to increase the number of trade unions in Oman. They have also implemented various rights and restrictions associated with the trade unions as per Omani Law.

The trade unions have the right to collective bargaining for a peaceful strike for improving the employment and financial association but it is subjected to certain limits. So the employees who are planning to involve in peaceful strikes must notify three weeks before the date of the strike. Those employees who work at companies providing basic services to the public are not allowed to strike.

Economic growth level

Trade unions are beneficial for transforming the economy as they fight for the inclusions of all the workers. The labor and trade unions work on various platforms around the globe so it is difficult to describe their roles specifically within the societies.

They pursue an internationalist outlook which puts them into the center of discussions on economic transitions in a country.

They also promote economic growth thereby proving beneficial for the development of the industrial sector. They also help in reducing accidents. They assist the management in proper safety arrangements for the workers at the workplace to minimize and avoid accidents.

As per Lawrence (2016) it is crucial for the trade unions as their members have been on the receiving end of the challenges brought by the process of globalization and economic situations. Furthermore, trade union helps in reducing inequality. For example, about half of the trade unions in the UK negotiate for the flexible working hours in a better way as compared to the legal regulations and norms.

It has been assumed that free and strong trade unions are prerequisites for sustained national development. It should be ensured that the workers are set free to organize. Once the unions are established then they can perform their role in fighting with poverty and upgrading the economic development of the country (Levinson, 2013).  

However, it has also been argued that trade unions need to promote a right based approach to economic development. In order to develop a holistic approach  for advancement, the economic rights should be pursued simultaneously with socio-economic rights by the trade unions (Waterman, 2016).

As per Metcalf (2013) it is essential for the economies to evolve their capability for pursuing strategies in order to improve the competitiveness of the enterprises in the local and international markets. It, therefore, requires the active participation of the trade unions for assisting a favorable climate of the industrial relations.

By the implementation of the proactive policies, the trade unions eradicate gender discrimination and promote decent employment opportunities for the economic development of the country. They also promote and institutionalize social dialogue beyond traditional industrial relations (Troy, 2016).

These social dialogues determine the patterns of economic growth so that the profits can be shared and the tradeoffs can be negotiated for the creation of more jobs in the country. They also help in creating necessary space for macroeconomic policies implemented by Sultanate of Oman (Haufler, 2013).

In order to promote economic development, the unions place the employment policies as the center of the macroeconomic policies. The holistic strategies of trade unions develop the fundamentals for promoting faster and employment-intensive growth. It would help in reducing the poverty of the nation (Hafner-Burton, 2013).

The implementation of the labor market policies is suggested by the trade unions. These are implemented within the framework of national economic policies so that the problem of youth employment can be tackled (Conley, 2014).

Reinecke and Donaghey (2015) stated that the trade unions also help in the social protection of all their members. They suggest the scaling up of expenditures on water, health and nutrition to be provided to their members. They further suggest the administration to provide a safety net to the employees who are confronted by the impact of changing economic relations.

They also help the administration in investing in human capital and extend the social security to the poorest class of employees as well. They also harmonize their activities according to the recommendations as provided by international organizations.

For example, it has been observed that trade unions play a major role in mitigating the income inequalities in the USA. In the USA, unions have constrained the inequality of income beyond their own membership ranks. They have also lobbied for the high minimum wages and provoked the management to lessen the salaries of the executives.

They have also advocated for better access to health services thereby countering the channel through which the inequality of income can pose a threat to the entire society. About 16 million working men and women in the USA are exercising their rights and they are being represented by the unions.  These representations help in making organized labor among the largest institutions in the USA (Ledwith, 2012 ).

The freedom of workers for associating with each other in the form of unions to bargain with the employers is also known as collective bargaining. It is recognized as a fundamental human right around the globe. In the US, it is safeguarded by the US Constitution and law and is supported by many Americans.Furthermore, the trade unions can boost the British economy by £30 Billion (Financial Times, 2017).

For example, the General Federation of Oman Trade Unions (GFOTU) in Oman works for the development  of the health  and safety of the workers . It also develops the labor standards to be implemented in various industrial sectors of the country (Rajasekar and Al Raee, 2013).

During the oil crisis in 2017, about 48 companies belonging to the oil sector terminated the services of many employees. GFTU in association with Ministry of Manpower, Ministry of Oil and Gas and Oman society for Petroleum Services assisted more than 5000 employees during that period.

Some of them were hired in other companies and the others received compensation Furthermore, on the occasion of International Women’s Day, the management of L& T Modular Fabrication Yard in coordination with GFTU had also granted benefits to the workers.

In Oman, during 2017, 27 unions were formulated which was a 10% increase as compared to the previous year (Baccini and Urpelainen, 2014).

Conclusion 

This literature review can be concluded by saying that workers and trade unions are the representatives of the interest and voices of millions of workers all over the world. The mission of the trade unions is to provide decent work in a healthy environment at the employee level.

The trade unions ensure that the workers have the accessibility to public services like water, sanitation and health along with training related to education and skills so that they achieve a decent job.The main function of the trade unions is to defend the human rights and labor standards and to promote their own growth which would be for the benefit of working men and women.

Thus trade unions contribute to the economic and organizational development along with the individual growth of the workers. The trade unions help the workers to participate in the management of the company as shareholders thereby contributing to the organizational development. It would further lead to economic development of the country.

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