Trade unions are most closely associated with negotiating with the employers of a business on behalf of their members over the issue of pay. This is known as the ‘pay-bargaining process’, and it is an example of collective bargaining.
The first stage in this process is for each side (the employer and the trade union) to decide on its objectives. As well as deciding the amount of a pay rise, both the trade union and the employer will also need to decide how the money will be distributed amongst the members of the trade union (i.e. will the pay rise be a ‘blanket’ coverage giving every employee a fixed percentage rise, or will different groups of workers receive different percentage pay rises?). Further to this point, will the pay rise be awarded in a lump sum per employee, or will it be staggered over time?
The second stage involves both sides (the trade union and the employer) presenting their arguments at a ‘pay-talk’ discussion. A trade union will put in a ‘pay claim’, which will be based on one or more of the following points:
1. An increase in the cost of living (i.e. inflation) requires that workers have a pay rise in order to maintain their purchasing power.
2. An increase in labour productivity rates will mean more sales revenue and profits for the business, this extra profit should be shared with the workers by giving them higher rates of pay.
3. A pay rise is required in order to recruit and retain the ‘best’ workers that the business can find.
4. If workers are using new machinery and working practices, then they need to be compensated for this extra work by being given a pay rise.
The employer will put forward a ‘pay offer’, which they believe will reflect the current trends in the labour market (i.e. the rates of pay which are being offered by rival businesses), as well as maintaining the competitiveness of the business (i.e. not increasing their costs by a large percentage).
The third and final stage involves a negotiation process between the trade union and the employer. In order for this to be a success, both sides will be required to compromise and be prepared to accept less than their original objectives.
Trade unions also represent individual members when they have a problem at work. If an employee feels they are being unfairly treated, he or she can ask the union representative to help sort out the difficulty with the manager or employer.
If the problem cannot be resolved amicably, the matter may go to an industrial tribunal. Industrial tribunals make sure that employment laws are properly adhered to by employees and employers. They are made up of people outside the workplace who listen to the employer's and the employee's point of view and then make a judgement about the case. People can ask their union to represent them at industrial tribunals. Most cases that go to industrial tribunals are about pay, unfair dismissal, redundancy or discrimination at work.
Unions also offer their members legal representation. Normally this is to help people get financial compensation for work-related injuries or to assist people who have to take their employer to court.
Information and advice
Unions have a wealth of information which is useful to people at work. They can advise on a range of issues like how much holiday you are entitled to each year, how much pay you will get if you go on maternity leave, and how you can obtain training at work.
During the last ten years, trade unions have increased the range of services they offer their members. These include:
- Education and training - Most unions run training courses for their members on employment rights, health and safety and other issues. Some unions also help members who have left school with little education by offering courses on basic skills and courses leading to professional qualifications.
- Legal assistance - As well as offering legal advice on employment issues, some unions give help with personal matters, like housing, wills and debt.
- Financial discounts - People can get discounts on mortgages, insurance and loans from unions.
- Welfare benefits - One of the earliest functions of trade unions was to look after members who hit hard times. Some of the older unions offer financial help to their members when they are sick or unemployed.
If the negotiation process collapses (whether it was negotiating for pay or for working conditions), then there are a number of different methods of industrial action which the trade union can propose to its members that they use in order to achieve their demands :
1. Non co-operation. Refusing to attend meetings and use new machinery or processes.
2. Work to Rule or ‘Go Slow’. Refusing to perform any tasks not in the contract of employment and keeping the output of products to a minimum.
3. Overtime Ban. Refusing to work any hours over and above the required weekly number of hours.
4. Picketing. Standing at the entrance to the workplace and not allowing any person or vehicle to cross the ‘picket line’ and enter the workplace.
5. ‘Blacking’. Refusing to deal with certain employees or suppliers because they have refused to participate in the industrial action.
6. Strikes. This is often the last resort for a trade union. It involves the employees stopping their work, leaving the workplace and refusing to return
Whichever method of industrial action is implemented, the trade union and the employees are using it in an attempt to reduce output (therefore also reducing sales and profits) and hoping that the employer will give-in to their demands
Advisory Conciliation and Arbitration Service (A.C.A.S.)
The Advisory Conciliation and Arbitration Service was set up by the government in 1975 as an independent body that helps to settle industrial disputes and claims of unfair dismissal by employees. As the name suggests, there are three main services that are offered by ACAS, advice, conciliation and arbitration.
A.C.A.S. representatives can be invited into a business by the two feuding parties (employers and trade unions) in order to offer their advice to both parties on the industrial unrest and the ‘best’ way to proceed in order to settle the unrest.
Conciliation is an attempt to get the two sides in an industrial dispute to resolve their differences. A conciliator listens to the arguments of both sides, and then tries to encourage the trade union and the employer to negotiate and compromise so that they can reach a solution that is acceptable to both parties.
Arbitration is the process of resolving an industrial dispute by using an independent person to decide the appropriate outcome. The arbitrator will look at the arguments put forward by both parties, and then he will arrive at a decision. The decision can be legally binding on both parties if this was agreed prior to the arbitrator’s decision
Pendulum arbitration is a type of arbitration in which the arbitrator will decide completely in favor of one party or the other, with no compromise or negotiation being allowed. It is likely, therefore, that both parties (the employers and the trade union) will make their demands more conservative and realistic than if the arbitrator was allowed to choose an outcome which was somewhere between the two.
Why has trade union membership changed in recent years?
There are several reasons for this fall in membership, including:
- a dramatic fall in the number of jobs in manufacturing industries where union membership was traditionally high
- larger numbers of unemployed people
- a fall in traditional full time employment and an increase in part time and temporary workers who are less likely to join unions
- an increase in the proportion of the workforce employed by small companies where it is often difficult for unions to organize
Hostile legislation - the previous Conservative government introduced laws which make their members.
Recent legislation has severely weakened trade union power as follows:
- An employer can now sue a union for lost profits if industrial action is taken without an initial secret ballot of workers.
- Industrial action can be taken only against the original employer and not against his suppliers or buyers.
- Mass picketing is unlawful. Only a handful of strikers are allowed to man a picket line, peacefully.