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Trade Unions

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?

Trade Unions

Trade unions exist to represent employees in different ways in their employer-employee
relationship. Nevertheless, efforts have been witnessed in some quarters of the government to
curtail the functions of trade union. For instance, in 1979 after ascending to power, Mrs.

Thatcher aim was to reduce powers of these unions (Theo, Walters & Tasiran 2007, p. 211). The
author focuses on the benefits and drawbacks of trade unions to employers as well deliberates on
whether the role of these unions still exists in this contemporary employment relations.
Trade unions offer workers greater influence that enables them to engage in collective
bargaining. This is important to employers because, it enables employees to raise their opinions,
and views on different aspects that concern them. The employer is therefore able to understand
the plights that employees face as well as their demands hence, adopting appropriate strategies to
meet the same (Theo, Walters & Tasiran 2007, p. 212). Therefore, employers have an
opportunity to mitigate future conflicts if they listen to trade unions. Allowing employees to
engage in discussions, negotiations, and consultations creates or fosters industrial democracy that
leads to social citizenship in the workplace (Donado & Klaus 2012, p. 990). The relationships
between employees and the employer become positive and this promotes cordial working
relationship. This reduces incidences of strikes and go slows that negatively impact on the
productivity of the organization.
Another benefit of these trade unions to employers is that they enable employers to
demand high quality services from employees’ equivalent to the salaries and benefits they give to
their employees. Even as the workers demand for better working conditions, higher salaries and
promotions, employers as well gets an opportunity to demand for quality services (Miller &
Mulvey 1992, p. 125). The employer can set standards higher and demand that workers sign for
performance contracts to ensure that they remain committed to their duties.
Trade unions as well have the capacity to negotiate for productivity deals. They can help
organizations to increase their output, hence enabling employers to afford higher salaries and

wages. Furthermore, employers stand to benefit from trade unions because they have the
capacity to implement new working practices that can improve the level of productivity.
Increased productivity directly improves profitability of employers.
Trade unions as well have some drawbacks that directly affect employers. One of the
drawbacks is that they may deter smooth operations of the organization especially during strikes
and go slows. During such incidences, employer may encounter huge losses that may jeopardize
smooth operation of the organization. Furthermore, trade unions may demand huge salary perks
and benefits that the employer may not be in a position to pay, hence leading to stagnation of
provision of essential services (Haas & Hwang 2013, p. 46). The employer may therefore, incur
higher losses that might have negative impact on the economy. A good example is the case of the
Kenya striking Teachers. Teachers’ union demands pay increase from the government also the
employer and this has caused closure of both primary and secondary schools.
The other drawback is lose of productivity. Trade unions may cause an organization to
close down because of lack of productivity. When an employer goes out of business, it becomes
difficult to recruit employees and even maintaining those in trade union. The employer therefore,
suffers loss as well may experience inflation especially when trade unions demands for higher
salaries above the rate of inflation. A good example is during 1979 whereby UK powerful trade
unions contributed to an increase in inflation rate to 27 percent (Theo, Walters & Tasiran 2007,
p. 214).

Trade unions have decreased in the last decades but they still play a key role in the
contemporary employment relations. The few countries that still rely on manufacturing sector
have a heavy presence of trade unions compared to western nations that experience rise in

service sector (Furåker & Bengtsson, 2013, p. 552). These trade unions are still effective in
collective bargaining of employees. Employees through trade unions can bargain for
improvement in working conditions, increased salaries, promotion, job security, and other
benefits such as fringe and health insurance cover among others.
It is important to note that trade unions remain one of the bodies that represent
employees in various aspects concerning their welfare. Even though, trade unions have benefits
to employees, they also benefits employers. They also have drawbacks that can affect employers
such as causing low productivity.

Reference list

Donado, A, & Klaus, W 2012, ‘How trade unions increase welfare’, Economic Journal, 122,
563, pp. 990–1009.

Furåker, B, & Bengtsson, M 2013, ‘Collective and individual benefits of trade unions: a multi-
level analysis of 21 European countries’, Industrial Relations Journal, 44, 5/6, pp. 548-
565, Business Source Premier, EBSCOhost, viewed 24 September 2015.
Haas, L, & Hwang, C 2013, ‘Trade union support for fathers’ use of work–family benefits –
lessons from Sweden’, Community, Work & Family, 16, 1, pp. 46-67, Business Source
Premier, EBSCOhost, viewed 24 September 2015.
Miller, P, & Mulvey, C 1992, ‘Trade Unions, Collective Voice and Fringe Benefits’, Economic
Record, 68, 201, p. 125, Business Source Premier, EBSCOhost, viewed 24 September
Theo, N, Walters, D, & Tasiran, A 2007, ‘Trade unions, institutional mediation and industrial
safety: Evidence from the UK’, Journal of Industrial Relations, 4,2, pp. 211–25.

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