Trade Unions (Cambridge (CIE) O Level Business Studies)

Revision Note

Written by: Danielle Maguire

Reviewed by: Steve Vorster

Trade Unions

A trade union is an organisation that represents the interests of its workers in negotiations with a firm’s management or owners
- A trade union's main aim is to protect and advance the interests of its members in the workplace
- Most trade unions are independent of any employer but try to develop close working relationships with employers
The interests of the worker include:
- Correct and fair pay
- Non wage benefits of employment such as training
- Health and safety in the working environment
- Suitable working environment
- The reduction of discrimination and worker exploitation
Trade unions are usually formed by the members of specific industries
- Airline pilots have a pilots' union
- Rail & sea workers have a rail & maritime union
- E.g. The NEA is the USA's largest professional employee organisation representing public school teachers and other support personnel at colleges and universities

Workers pay a monthly fee to join a trade union
- The fee is called a subscription
- Membership ends when the member stops paying this fee

The Effects of Trade Union Membership

Almost 23% of UK employees in permanent positions belonged to a trade union in 2022
Poland has the lowest level of trade union membership in the EU
Around 70% of workers in Scandinavian countries are trade union members
Public sector industries tend to have the highest membership density
Women are more likely than men to belong to a trade union
Trade union members generally receive higher pay than non-union members
Trade unions can become so large that they are able to influence government decisions in favour of workers

The effects of trade union membership for employees

Pros & Cons of Trade Unions For Workers

Pros	Cons
Workers no longer need to negotiate with management on their own, as they benefit from collective bargaining Workers receive better pay than non-unionised workers Workers enjoy better working conditions than non-unionised workers Workers enjoy better non-wage benefits, such as guaranteed lunch breaks Workers receive specialised job training & free legal advice from the union	Industrial action is stressful as it is a conflict between workers & management Workers do not get paid while on strike Strike action disrupts economic activity & can upset other people in the economy Individual workers may not agree with specific demands made by the trade union on behalf of all the workers, and yet they are pressured to support the collective action Some union members continue to work through a strike (they may need the money) & receive abuse & intimidation from the other striking union members

Pros

Cons

Workers no longer need to negotiate with management on their own, as they benefit from collective bargaining
Workers receive better pay than non-unionised workers
Workers enjoy better working conditions than non-unionised workers
Workers enjoy better non-wage benefits, such as guaranteed lunch breaks
Workers receive specialised job training & free legal advice from the union

Industrial action is stressful as it is a conflict between workers & management
Workers do not get paid while on strike
Strike action disrupts economic activity & can upset other people in the economy
Individual workers may not agree with specific demands made by the trade union on behalf of all the workers, and yet they are pressured to support the collective action
Some union members continue to work through a strike (they may need the money) & receive abuse & intimidation from the other striking union members

The effects of trade union membership for employers

The higher the percentage of workers from a firm that belong to a trade union, the greater the collective bargaining power of that union with the employer

Advantages and Disadvantages of Trade Unions for Employers

Advantages for Employers	Disadvantages for Employers
Training from the trade union increases worker productivity which decreases costs Empowerment in the workplace improves employee motivation, which usually results in fewer sick days, higher productivity & greater output for the firm	Including unions in decision-making increases the time period taken to implement changes which can be detrimental to effective competition Management styles have to be more inclusive & less authoritarian which some managers find difficult to accept Meeting union demands increases costs of production, which may reduce output & profits

Examiner Tips and Tricks

It is commonly assumed that trade unions are negative for business owners. To balance any exam answers, always consider how trade unions can benefit businesses.

Last updated: 23 October 2024

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