The role of Trade union in the

st
21 century organizations

BM-2014-281
BHRM 32123
Department of Human Resource Management
Faculty of commerce and management
University of Kelaniya
The role of Trade Union in 21st century organizations

A trade union is an organization that has been formed by workers in order to represent their
rights and interests to their employers. It is formal organization of workers which is established
to uplift the living standards of its members by providing welfare and other facilities.
EX: improve working conditions, protecting the integrity of its trade, improving
safety standards, and attaining better wages, benefits (such as vacation, health care, and
retirement)
“Any combination whether temporary or permanent, formed primarily for the purpose of
regulating the relations between workman and employer or between workman and workmen
or between employers and employers or for imposing restrictive conditions on the conduct of
any trade or business and includes any federation of two or more trade unions.”
(Indian Trade Union Act, 1926)

Trade union originated in the 19th century in Great Britain, continental Europe, and the United
States. It’s called the term labor movement. Smaller associations of workers started appearing
in Britain in the 18th century, but they remained sporadic and short-lived through most of the
19th century, in part because of the hostility they encountered from employers and government
groups that resented this new form of political and economic activism. At that time unions and
unionists were regularly prosecuted under various restraint-of-trade and conspiracy statutes in
both Britain and the United States.

The British movement favored political activism, which led to the formation of the Labor Party
in 1906, while American unions pursued collective bargaining as a means of winning economic
gains for their workers.
During the 20th century craft unions lost ground to industrial unions. This shift was both
historic and controversial because the earliest unions had developed in order to represent skilled
workers. These groups believed that unskilled workers were unsuitable for union organization.
Mass unions began appearing in Britain and several European countries, and before the end of
the century the industrial unions embracing large numbers of unskilled or semiskilled workers
were recognized as powerful negotiating forces.

The strength of the labor movement has been linked to general economic conditions. In times
of full employment and rising wages, unionism typically loses some of its appeal, particularly
among younger workers, while in recessionary times it becomes more attractive. By the end of
the 20th century the globalization of the workforce had brought new challenges to the labor
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The role of Trade Union in 21st century organizations

movement, effectively weakening collective bargaining in industries whose workers could be

replaced by a cheaper labor force in a different part of the world.

In the United States the labor movement was also adversely affected by the movement to
implement so-called right-to-work laws, which generally prohibited the union shop, a formerly
common clause of labor contracts that required workers to join, or pay service fees to, a union
as a condition of employment. Right-to-work laws, which had been adopted in 28 states and
the territory of Guam by the early 21st century, were promoted by economic libertarians, trade
associations, and corporate-funded think tanks as necessary to protect the economic liberty of
workers. They had the practical effect of weakening collective bargaining and limiting the
political activities of unions by depriving them of funds. Certain other states adopted separate
legislation to limit or prohibit collective bargaining or the right to strike by public-sector
unions.
Their tasks and possibilities in relation to interest protection have changed fundamentally after
the collapse of the socialist economic order. Trade unions today have to act as independent
interest advocacies competing for members. The old trade union ‘virtues’, such as solidarity
and common action, are still modern and necessary in 21st century. But they must be redefined
and implemented with a full awareness of the new political conditions and a constantly
changing working world influence. The trade unions must struggle together with their active
members to find the right ways and means to powerfully assert workers’ interests within the
conditions of their respective countries.

In those days, the state had little interest in the existence of autonomous trade unions that were
independent of the party and other political groups and that represented the interests of wage
earners. Instead, the unions were expected to perform a certain task within the framework of
this policy, particularly on the plant level. Organized wage earners were not supposed to
contribute their own interests to the political process. Instead, they were merely expected to
carry prescribed policies into the plants and see to it that they were properly implemented there
Within these growing democracies, the unions are now increasingly being called upon to
assume new tasks in politics. They no longer serve as mere executing authorities but rather
must frequently develop their own suggestions and present better alternatives than those
offered by the political establishment or other advocacy groups. This calls fora higher degree
of competency at the central level than has ever been seen before.

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The role of Trade Union in 21st century organizations

Today’s unions (21st century) are largely political organizations, whereas they used to be more
active on the societal level. This has, of course, become much more difficult now that more
political players have stepped onto the pitch. More or less powerful employers’ organizations
have formed, and other interest groups are also wrangling over their own ideas in the common
political.

This means that the trade unions and their functionaries need to take much more responsibility
for their own work than they have ever done before. In earlier times they were often solely
concerned with implementing political decisions on the plant and interplant level. The
responsibility expected from them today means two things: Higher risks for the actors and
those whose interests they represent, but also greater opportunities for all participants when it
comes to actively designing their own working world, creating new and attractive jobs and
generally creating better working conditions.
Today the unions are still by far the largest political lobby in the transition countries.
Assertiveness must go hand in hand with the necessary organizational competence. Since the
unions are now expected to provide more initiatives and practical contributions to political
discussions, they need to put considerably more effort into adding a second string to their bow
competent organization. Competence and assertiveness are the two pillars upon which the trade
union movement will achieve success.
And yet in many countries in Central, Eastern and East Central Europe there are still a whole
range of barriers preventing many people from becoming trade union members and joining
together to standup for their rights both at their workplace and in society at large. There are
also a number of legal restrictions on trade unions in certain professional fields, such as the
police, other public service sectors and the military.
‘Think globally – act locally!’ This applies to everyday union life today more than it ever did
before. There is scarcely an industry or profession out there that has not long since been shaped
by international conditions in one way or another.
Active membership demands knowledge and proficiency. This means that trade union
members should be informed immediately about all of their organization’s most important
events and plans so that they can promote them positively within their working environment.
For example, information regarding developments in their industry and their personal career
opportunities, knowledge about the increasingly complex social policy decisions that often
directly impact them.

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The role of Trade Union in 21st century organizations

Providing this form of service towards the members is becoming more and more important.
But as long as trade union members feel as if they are being provided with all the information
they need from their union, then they can and will be more willing to stand up. trade union’s
activity and its success are largely due to the presence of competent persons. Despite growing
technical possibilities, there is no substitute for personal dedication and personal contact with
members and non-members. Personal presence is still the best way to approach people, to grasp
their issues and problems and also to offer them practical assistance and protection
organization.
If the unions intend to effectively pursue the interests of the wage earners then they have to
become more than just company organizations. They must reach out to the public and present
themselves as an important component of society. This is not just a question of negotiated
wages and working hours, but also one of social framework conditions, which includes one’s
place of residence and environmental conditions, and reaching all the way to cultural life. Trade
unions obviously cannot be experts on everything, let alone pass out suggestions.

The history of trade unionism in Sri Lanka dates back to 1890’s the plantation industry
pioneered by the British in 1830’s resulted in the emergence of the first group of blue collar
working class in Sri Lanka. Disinclination of the indigenous workers to work in rose
plantation paved the way to the British rulers to bring thousands of Tamils from the other
parts of India even though they had to face the problems such as lack of housing, poor wages,
poor sanitary conditions etc. They did not struggle against their masters because they were
uneducated. As foreigners their life was limited to plantation, rigid rules etc. But as a result of
the pressure exerted by the Madras based colonial Government of India seen on colonial
government was compared to introduce minimum labor standards to safeguard the rights of
Tamil immigrant’s laborers. On the other hand in the light of the expansion of the plantation
industry a number of other industries to emerged such as Highway construction Railway
transportation, banking, printing, And Postal service etc. The workers who were employed in
these organizations were Sri Lankan indigenous workers and subject to labor exploitation
during that time trade unions and strikes were treated as criminal offences under the service
contract ordinance. The first person to introduce the idea of trade unions in Sri Lanka was
A.E.Bultigens. The first formal strike action was launched by 50 employees of British owned
H.W. caved company, largest firm of printers and booksellers in Colombo on the grounds of
delay in the payment of wages. On the 17th of September 1893 the Strikers held a meeting

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The role of Trade Union in 21st century organizations

and formed the Ceylon printer’s society, the first trade union not only in Sri Lanka but also in
South Asia.

There are common characteristics in Trade Union,

 It is a formal organization
 It is legal entity
 It operates continuously
 It is a voluntary organization

Trade unions have objectives/aims to achieve. Those are,

 Assure fair wages for workers
 To improve worker’s working conditions
 To assure the worker’s share in increased profitability
 To protect worker’s interest
 To ensure the worker’s security of employment
 Protect its members from illegal management actions
 To protect the larger interest of the society by adding in the improvement of a trade and
industry.

To achieve those objectives, unions have to perform certain activities which identified as
functions.

 Take part in various trade union actions such as picketing, strike….

 Represent its members internally
 Represent its members externally
 Bargain with the management and come into collective agreements
 Organized various welfare programs for its members
 Organize and provide educational and other facilities for the families of its members
 Relates with the government for legal assurance

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 The role of Trade Union in 21st century organizations

Why do workers join to a trade union?

Inefficient, discriminate, biased and weak management

Individual attempt to solve the problem

Job dissatisfaction

Unsuccessful

Union instrumentality Successful

Unionization Job satisfaction

There are some reasons to join Trade Union. Those are,

 To facilitate redressal of grievances
 It is compulsory for all to join a trade union
 To safe guard against victimization
 To enhance and show the unity an solidarity of workforce
 To secure better working conditions
Some workers do not join to trade union. Because of they have antiunion attitudes, social
pressure, job satisfaction, fear of reprisal, cost. There are some advantages and disadvantages
of having trade unions.

Advantages:
 Fulfillment of agency function
 To identify workplace hazards and problems
 Act as voice of grievances and complaints of its members
 Bring some certainty and discipline to workforce
 It influences on the application of proper HRM practices
 Help from maintain the wages at a uniform level in terms of the actual economic value.

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The role of Trade Union in 21st century organizations

Disadvantages:
 Trade union representation of collective interest
 Trade union representation of external factors such as external political influences
which disrupt the organization’s unitary approach
 It is interest of rules and regulations
 Presentation of unfair demands which were not be affordable

Multi unionism is the existence of more than one union .this is considered as weakness of trade
union movements and it is because of the weakness of our labor legislations.
There some causes of multi unionism, those are,

 Advent of outside political leadership in trade unions

 Clashes of personalities and egos
 Weak labor legislations
 Disunity in the rank of workers
And also there are some unfavorable consequences of multi unionism. Those are,

 Constant power struggle and jostling for the position of being the major trade union
 Violence and disharmony
 Inter union rivalries
 Extravagant demands
 Unions remaining financially weak
 Multiple enrolments in unions and non-subscribing members
 Difficulties in administration of membership fees

Concept of one union in one organization or industry in the solution for multi unionism. And
also introduction of strong labor legislations, merging trade union, elimination of outside
Political leadership are other solution for multi unionism.

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The role of Trade Union in 21st century organizations

According to my point of view, we cannot just say that having trade union is good and bad.
There some reasons to say that it is good and there some reasons to say it is bad.

Trade unions are good

 Because of having trade union in organizations, they demand high salaries for their
workers.so workers give their maximum for the productions, because of earning high
salaries and more fringe benefits than nonunion workers.

Wage rate

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 Because of having trade union, they tend to increase investment and technological
progress. The higher union wage may cause firms to invest in capital in order to
substitute for the relatively more expensive labor. And also searching cost reducing
technologies.
 Trade union act as a collective voice for their members to resolve disputes, improving
working conditions, etc…unions provide workers with a collective voice to
communicate problems and grievances to management and to get satisfactory solution.
Then increase worker’s morale and satisfaction and so do productivity.
 And also it tend to reduce turnover. Union workers have lower turnover due to
collective voice as well as the union wage advantage. They demand more benefits for
employees .so, employees never give up the organization.

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The role of Trade Union in 21st century organizations

 Union workers have higher productivity due to their greater work experience. And also
union firms are more willing- to invest in training.
 The higher wages at union firms will allow them to hire better workers.so have higher
productivity and lower supervision cost.

Trade unions are bad

 Unions may impose various restrictive work rules that decrease efficiency and
productivity. They can directly limit their output. Sometimes using time consuming
production methods.
 And also union can strike.it is a last action of union. If management and union impasse
in their negotiations, a strike will result and firm production will cease during strike.
The firm will forgo sales and profit and worker will sacrifice income.
 Because of trade union demand higher salaries for their workers, then workers earn high
salary than non-union workers. So, labor cost of unionized firm is high. Then prices
will increase and as a result product demand of unionized firm is reducing compared to
the non-union firms.

Example:

There is no labour unions in BODYLINE Pvt Ltd. Wages employees have a JOINT

CONSULTANT COMMITTEE (JCC). If the employee has a reasonable problem, they can
submit it to JOINT CONSULTANT COMMITTEEE committee through JCC form. If that is a
reasonable problem, the committee will attempt to give the best solutions.

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The role of Trade Union in 21st century organizations

As a conclusion, I would like to say that having trade unions are good for organizations in 21st
century. According to my opinion in an organization, having a trade union is must. Because it
is representation from employee side. Therefore employees can stand for their rights in the
workplace. I think it is a strength for employees.

Trade union reduce inequality in the organization. We know that all the workers are against the
inequality. Trade unions help to remove glass ceiling and helping women entrepreneurs. Trade
union can decrease income inequality in three ways,

1. Equalizing wages within firms.

Without unions, employers pay different wages to workers on the same job. Unions try to pay
tied to jobs not individual workers. Wage discrimination against blacks, other minorities and
women is likely to be less when a union is present.

2. Equalizing wages across firms.

Unions seek to standard wage rate among firms. This enable union to protect their wage
advantage.

3. Reducing to white collar to blue collar differences

Unions achieve large wage gains for blue collar workers than for white collar and white collar
enjoy higher earning than blue collar.

And also trade union increase the training and wellbeing in the workplace. Having union
representative in the workplace can reduce employee’s stress level, improve their work life
balance and increase their wellbeing overall. The survey found that worker’s perception of job
quality were more favorable in organization where an onsite representative was present. This
is important for employers across all the sectors, as higher job quality can lead to higher
productivity and fewer workers quitting their jobs. Trade unions reduce child poverty and
promote social mobility.

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The role of Trade Union in 21st century organizations

References
ECONOMICS HELP. (n.d.). Retrieved from Advantages and Disadvantages of Trades Unions:
https://econ.economicshelp.org/2007/04/advantages-and-disadvantages-of-trades.html
ENCYCLOPEDIA BRITANNICA. (n.d.). Retrieved from Trade union:
https://www.britannica.com/topic/trade-union
Gamage, P. N. (2013). Multiplicity of Trade Unions: Issues & Challenges in Sri Lanka. Indian
Journal of Industrial Relations.
Hantke, F. (2009). Trade Unions in the 21st Century. Retrieved from http://library.fes.de/pdf-
files/id/06672.pdf

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