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Millaniyage Dulan Chaturanga Perera 617809 Managing Employee Relations Assignment Research Essay Is the work of Unions still relevant? A trade union, as defined in the History of Trade Unionism is ‘ a continuous association of wageearners for the purpose of maintaining or improving the conditions of their working lives’.(Webb and Webb, 1911) Unions exist on the basis that they protect the wages and conditions for employees, making sure that they're protected from unemployment by obtaining a substantial degree of job security as well as supporting employees in disputes and claims against their employers.(Murphy, 2014) The relevance of unions may vary from place to place. Using reasoning and statistical day, we will aim to achieve some sort of clarity towards the complexity and variety of opinions that people have on the need for trade unions. Importance of Trade Unions Unions not only negotiate wages, they also have an impact on fringe benefits, labour productivity,work allocation, job security and employee participation practices.(OECD, 1991) There is also a spillover effect, through extension of agreements and employer responses to union environment where some of these benefits alter the employment terms of non union members.(OECD, 1991) A substantial amount of protective legislation supporting unemployment compensation, sickness insurance, employment protection along with occupational health and safety, is the outcome of work by trade unions. History of Union Formation Succeeding guilds of the medieval era, British skilled workers embarked on forming trade unions in the 17th century. In the 18th century, following the industrial revolution,a number of trade disputes arose, with a number of men and women being forced to work in harsh industrial conditions for long numbers of hours. As a preventative measure the government passed the combination acts in 1799 to combat collective action by the workers through imprisonment. Despite such legal action, trade unions continued to show strength and grow,so much so that in 1824 the parliament appealed the Combinations Act and unions could no longer be ignored. (Batt, 1986) The labour movements towards unionism took place in the United states a little after it happened in Britian and this was followed by similar occurrences all over the world.The british movement aimed to achieve its goals through political activism which lead to the formation of the Labour party whilst in the united States a different approach was pursued. In the US, Collective Bargaining was used, where a group of employees and employers negotiate to determine the conditions of employment in a collective agreement.(Law.cornell.edu, 2014) Employees are often represented by a union in bargaining and the collective bargaining process is governed by federal and state legislation.(Law.cornell.edu, 2014) Lots of different countries have proceeded with similar approaches to the two listed but its evident that the legislation and procedures may vary from country to country or state to state. In more recent times for example, in Sweden trade unions negotiate with central organisations of employers about national wage agreements; where as in the United Kingdom opposing unions
Millaniyage Dulan Chaturanga Perera 617809 Managing Employee Relations Assignment Research Essay exist within the same firm and they negotiate agreements; regional but industry wide collective agreements are supervised industrial union headquarters in Germany; thousands of enterprise unions make wage claims through a common campaign in Japan; Australian unions and employers’ associations meet in arbitration court to discuss wage cases; in the United states local unions individually bargain with managements of different companies to come up with detailed agreements; while the french employers and unions are still reluctant to negotiate and produce collective agreements at all. (OECD, 1991) Trends in Union Representation In 1970, 14 million unionists were added to the existing 78 million members of trade unions in the OECD (Organisation of Economic Cooperation and Development) countries but in the 1980s, 5 million of them were lost. The major losses took place in the United States, United Kingdom and France but all countries experienced declining trade union memberships.When considering union density (employed members per civilian wage and salary employment) , a much steeper decline can be noticed. Average density of unions in the 18 OECD countries rose from 35 in 1970 to 37 in 1975 but fell down to 28 by 1988.(OECD, 1991) Early declines took place in USA, Japan and France while most of the other countries steadily improved till 1979 or 1980 but most countries’ densities fell thereafter. It was an evident trend that countries that already experienced weak unionisation further weakened but countries that were initially highly unionised seemed to withstand a falling trend . The United States, a country with low unionisation levels showed a particularly significant decline. At its peak in 1945 one third of wage earners were members of trade unions. This statistic decreased to to 16 % by 1991.(OECD, 1991) Such levels of unionisation were only experienced by The United States before the New Deal legislation which laid the foundation for collective bargaining in the blue collar workforce. (Archer, 2013) In 1979 there were 13 million employees who were trade members in the UK. This figures had fallen to 6.5 million by 2012, which was an increase of 59 thousand from the previous year ,but was clearly an overall decrease over the whole period from 1979 2012. There was a period of stability in trade union membership between 1995 and 2007 following a consistent period of falls in membership. In more recent times ,the membership levels have managed to remain consistent with the increasing number of employees and remains stable at 26 %. If we consider the period 19952012 there has been an overall fall in 6 % from 32% in 1995 to 26%in 2012. It is also statistically significant that there is higher female union membership in 2012. Females make up 29% of the memberships in comparison to the males who make up 23%. Another consistent trend is the stability of union members who are of an older age . In the years preceding 2012 there have been decreases in union memberships in all age groups, except those of employees over 65. 36% of trade union members in the UK are aged over 50 in 2012 where as this statistic was 22 % in 1995.(Department of Business Innovation and Skill, 2013)
Millaniyage Dulan Chaturanga Perera 617809 Managing Employee Relations Assignment Research Essay In 1986 the percentage of employees in Australia that belonged to trade unions was 46 %. A steady decline in union membership took place after August 1992, where a large proportion of the workers were trade union members in their main job. Between August 1992 to August 2011 males fell from 45% to 18% whilst females fell from 35% to 18%. This was however followed by a small rise in the male proportion of trade union memberships during the global financial crisis where the percentage of workers rose from 19% in August 2008 to 20% in August 2009. In the same period, there was an increase in full time worker participation, 20.7% to 21.9% while the part time worker participation remained constant at 15%. After the GFC , the proportion of labour union participation of workers who were members in their main job, fell back down to 18% in August 2011. Overall it can be seen that from 1992 to 2011 there has been a clear decrease in trade union memberships. (Abs.gov.au, 2014) Reasons for changes in Union Representation Unemployment is a significant reason for fall in the activity of unions and seems to have quite an impact on the relevance of unions at present. With increasing unemployment rates, the unemployed stop paying union dues and their dependance on unions tends to rise as they have less power against employers in times of high unemployment. As a result union action tends to be more costly and less rewarding. (Bsin, and Elsheik, 1979). Workers also seek to fight employers regarding redundancies through the unions and also look for some protection during periods when they aren't employed (Pedersen, 1982) as some unions offer the option of unemployment insurance. A study was carried out in which the relationship between rise in unemployment in 1980’s and fall in union memberships was analysed for ten european countries. (Visser and Blanpain, 1990) It was noticed that there was a correlation of 0.71 between the rise in unemployment and average annual growth of memberships between 19801985. Inflation on the other had an opposing effect in comparison to unemployment. Even though in most countries, higher inflation in most situations ment higher unemployment which was consistent in the 1970’s, inflation was stabilised and to some extent reversed in the 1980’s. Higher inflation had a positive impact on unionisation. Its is because workers perceive an increase in retail prices a threat to their standard of living and employees will remain union members in order to maintain a consistent standard of living.Also employers tend to be more willing to reward their workers as these rising labour costs are easier to translate in to higher consumer prices.(Bsin, and Elsheik, 1979) Inflation was also vital in the introduction of unionisation to white collar workers.(Miller, 1984) Change in industry structure is another vital component in understanding the relevance of unions because the existence of trade unions vary throughout the economy. There is a higher tendency for workers to become unionised in the manufacturing, transport and public administration sectors rather than agriculture, trade or financial services. It is also more common for workers in larger firms to join unions than those of smaller firms. Union memberships are also lower in the private sector in comparison to the public and lower for white collar professions as opposed to
Millaniyage Dulan Chaturanga Perera 617809 Managing Employee Relations Assignment Research Essay manual labour. Recent increases in developed countries towards technology and service industry has made economies less reliant on industrial occupations where unions had the biggest impact. Unions proved very helpful in the manufacturing industry in times of recessions as unions gave their members a higher chance of employments over the nonmembers which meant that weakly unionised nations were hit hard during difficult economic times. It was claimed that the presence of unions helped firms perform and cope with recessions better by attracting public subsidies through political exchanges with governments or by influencing the recruitment of workers in favour of members.(OECD, 1991) Legislative change is another factor that has an impact on the effectiveness of trade unions. In Australia for example, in the last twenty years the law has drifted labour management from a centralised system of awards to agreements taking place at an enterprise or workplace level. Such emphasis on decentralised bargaining, along with the inclusion of collective and individual bargaining has decreased the need for union representation in the negotiation of wages and employment conditions.(Abs.gov.au, 2014) Alot of the existing unions in Australia have amalgamated themselves into a much smaller number of unions organised along industry lines.(Griffin, 2014) Opposition of employers to the purpose of trade unions seem have a negative effect on the way the trade unions function. Employers put workers on the management teams by appointing them to the board of directors or establishing some sort of profit sharing arrangement. New additions to labour force also have very little loyalty to structured labour. There have been large increases in women and teenangers whos incomes arent the primary source of household spending, so such employees are more accepting of lower wages reducing the need for union intervention. Internal corruption in unions is another counter productive source of declining union members. The unions have raised their own wages well above those that are paid to non union workers. Certain individuals even associate unions with hostile behaviour thus prefer not to take up its services. (Dundon, 2002) The relevance of unions vary from place to place , because the performance of unions depend on a variety of factors. These factors have drastic differences from region to region and industry to industry. Its is ignorant to justify that unions are no longer relevant all over the world, because to a certain degree they are still a valuable part of labour management in some parts of the world. It is however much more reasonable to conclude that the importances and effectiveness of unions is declining at present.
Millaniyage Dulan Chaturanga Perera 617809 Managing Employee Relations Assignment Research Essay
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Millaniyage Dulan Chaturanga Perera 617809 Managing Employee Relations Assignment Research Essay Abs.gov.au, (2014). 4102.0 Australian Social Trends, 2008. [online] Available at: http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4102.0Chapter7202008 [Accessed 22 Sep. 2014]. Griffin, G. (2014). Union Mergers in Australia: TopDown Strategic Restructuring. [online] Available at: http://www.buseco.monash.edu.au/mgt/research/workingpapers/nkcirworkingpapers/nkcirwo rkingpaper80.pdf.
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