The Role, Benefits and Drawbacks of Trade Unions in Contemporary Employment Relations
Recognising that trade unions are the representative of employees, identify the benefits and drawbacks of such unions to employers. Do trade unions still have a role in contemporary employment relations
- Benefits of trade unions
- Trade union is well recognized for counter balancing the monopsony power.
W3
W1
W2
Q2 Q1
When trade unions do bargain for w3, it does not lead to unemployment and in return, the employment stays at Q2. It means that trade union has the possibility and power to increase wages and employment at the same time.
- Representing workers
The main aim for the formation or coming up with trade unions is to protect workers in all discipline or fields in a given economy. It is done from the exploitation and also trade unions do uphold safety legislation and health for the employees. In addition, trade unions can offer representations for workers who are facing legal actions.
- Trade unions are recognized as of great significance in the service sector
In the modern business economy or industry, service sector economy is increasing at an increasing rate. This kind of service jobs, many of them if not all are done full time and other on part time. Trade unions are shifting their attention on this sector since it is more so unrecognized for the benefit of protecting workers, (Sue Fernie, David Metcalf. 2013).
- Productivity deals
In recent times, trade unions have merged into the business economy where it is mostly used to negotiate or bargain for any productive deal. The purpose of these inputs by the trade unions is to help an organization to be in a position to increase its output. In the return for this, the organization or the company are fixed in a flexible position where they have the chance to increase the employee’s wages and in doing so, the trade union are mostly recognized by enterprises for improving the productivity.
- Trade unions drawbacks
- It does create unemployment
In modern economy, labor markets are becoming very competitive. In order for them to survive in this completion, they have to increase the wages for the employees. Increase in employees wages, it means that the wages will be excess or will be over the equilibrium. When the wages are above equilibrium it definitely results to the fall of employment hence creating unemployment for many.
- Wage inflation
If a lot of power is manifested to the trade unions, they become very powerful. The power helps them to negotiate for an increase of wages which is above the rate of inflation. If the possibility of increasing the wages is granted, it will definitely cause or lead to general inflation, (Nirmal Kumar Betchoo, 2014).
- Trade unions does ignore non members
Trade unions are only responsible for the members who participate or contribute to their terms and conditions. It does not recognize the unemployed who they recognize as non members.
- Lost productivity
A lot of strikes from the workers may lead to the organizations losing a lot of sales and also it may lead to working to rule (work unproductively). It does eventually lead to lost sales and output. In the long run, the enterprise may mushroom or be in a position which its not able to employ workers at all effort, (Oshisanya, ‘lai Oshitokunbo. 2015).
Trade unions roles in the contemporary employment relations are changing day in day out. It is due to the fact that, there is an increase in international competition, service outsourcing, legal challenges and more so the employees participation have played a great chance for the fall of the unions due to its collective bargaining, (Steve Williams, 2014).
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