What is a Trade Union?
 Definition: A group of workers who collectively
want to
– Improve the terms and conditions at their
workplace
– Enhance their status in society
 In most countries, there are laws governing the
formation, membership and administration of
trade unions.
15–1
Objectives of a Trade Union
1. Collective bargaining
– Represent members to negotiate with
employers, for better wages and conditions
of employment
2. Safeguard jobs
– Protect jobs of members
3. Cooperate with employers
– For the benefits of members, resolve
disputes in a mutually acceptable manner
15–2
Objectives of a Trade Union
4. Political activities
- Support pro-union political parties
5. Social activities
- Support members with recreation facilities
and benefits for unemployment, illness,
retirement, death
15–3
Types of Unions
1. Craft union
– Same craft or occupation
2. General union
– For unskilled workers
3. Staff union
– Non-manual workers
15–4
Continuation:
4. Industry union
– Same industry, regardless of skills,
occupation or job
5. House union (company or enterprise
union)
– All members are from the same company
regardless of occupation or job
15–5
Why Workers Join Unions
1. Higher wages and better working
conditions
– Collective bargaining with employer
2. Job security
– More secured with collective agreement
3. Social need
– Meet co-workers from other departments or
companies
15–6
Why Workers Join Unions
4. Upgrading of skills
– Attend training courses organized by union
5. Peer pressure
– Colleagues are members
6. Self-fulfillment
– Serve other members
15–7
Collective Bargaining
Definition
– Negotiation between employer and workers
– About terms of employment and working
conditions
– With objective of reaching an agreement
Representation
– Employer - its management
– Workers - their union representative
15–8
Collective Bargaining –
Content
 Matters related to
– Salary
• Amount, time of payment, bonus, financial and
non-financial benefits
– Conditions of employment
• Annual leave, rest days etc
15–9
Collective Bargaining –
Perspectives
1. Behavioral
– Balance of power between employer and
employees
– Reflects labor market conditions in determining
wage increases and terms of conditions.
2. Economic
– Reflects labor market conditions in determining
wage increases and terms of employment.
3. Legal
– Employers are required by law to negotiate with
employees’ representative. Both parties must
follow legal procedures in collective bargaining.
15–10
Conditions for Successful
Bargaining
1. Freedom of association
– Workers and employers are free to form their own
associations to represent their interests.
2. Stability of union
– Unions have to be stable for collective bargaining to
be effective  union is able to honor the
agreement.
3. Recognition of union by employer
– Collective bargaining begins after employer
recognizes the union that claims to represent the
specific group of workers.
15–11
Conditions for Successful
Bargaining
4. Good faith
– Both parties must be willing to resolve differences
to reach an agreement.
5. Mutual respect
– Relationship affected and process becomes tense
and difficult if any party used unfair practices.
– Employment laws to ensure process takes place in
an orderly manner.
15–12
Negotiations
 Process depends on these factors:
1. Subject matter to be discussed
2. Persons involved
3. Circumstances under which the discussion is held.
 A Typical Negotiation Process begins with
each party stating its position.
 As discussion progresses, each party adjusts
its demands to seek a mutually acceptable
agreement.
15–13
Steps in Negotiation
1. Preparation
– Each party must know what it wants.
2. Presentation
– Each party presents its case.
3. Exchange and compromise
– Parties look for possible adjustment or
compromise.
4. Reaching an agreement
– Parties sign a written statement on what have been
agreed.
15–14
What is Impasse?

Happens when settlement
cannot be reached.
15–15
Ways to Settle Disputes
 Conciliation
– Impartial third party helps the two parties
to reach a mutually acceptable settlement.
– Conciliator meets parties separately or
together to exchange information, clarify
issues and settle misunderstanding.
– Conciliator does not impose a solution but
works with the parties to enable them to
come to an agreement.
15–16
Ways to Settle Disputes
 Mediation
– Impartial third party helps to reach a
mutually acceptable agreement.
– Mediator makes recommendations for the
two parties to consider.
– Final agreement is made by the two parties
themselves.
15–17
Ways to Settle Disputes
 Arbitration
– Third party settles the dispute by making an
independent decision for the two parties.
– Some prefer arbitration as the responsibility
“for reaching agreement” is made by a
neutral party (quite often, appointed by the
government e.g. Arbitration Court).
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