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IB DP Business Management Study Notes

2.6.3 Role of Trade Unions

Trade unions hold a significant role in shaping the landscape of Human Resource Management by advocating for employees’ rights and acting as a mediator between workers and management, thus influencing working conditions, organisational culture, and employee relations.

Objectives of Trade Unions

1. Employee Advocacy

  • Voice of the Employees: Trade unions represent the collective voice of employees, ensuring that their concerns, needs, and aspirations are conveyed to the management.
  • Protection of Rights: By advocating for employee rights and ensuring adherence to labour laws and regulations, trade unions safeguard the workforce from potential exploitation or unjust treatment.

2. Negotiation and Bargaining

  • Collective Bargaining: Unions negotiate with employers on matters related to pay, work conditions, benefits, and other aspects of employment.
  • Resolution of Disputes: They often act as arbitrators to resolve disputes and conflicts between the workforce and the management in an unbiased manner.

3. Fostering Workplace Equality

  • Promoting Equality: Trade unions work towards ensuring that workplaces are free from discrimination and that equal opportunities are provided to all employees.
  • Championing Diversity: They often engage in activities that promote a diverse and inclusive work environment, ensuring that underrepresented groups receive equitable treatment.

Influence of Trade Unions in HRM

1. Shaping Employment Legislation

  • Policy Advocacy: Unions play a crucial role in shaping employment legislation by advocating for policies that safeguard employee rights and ensure fair treatment.
  • Ensuring Compliance: They also play a pivotal role in ensuring that organisations comply with existing labour laws and regulations.

2. Influencing Working Conditions

  • Safe and Healthy Environments: By advocating for safe and healthy working conditions, unions contribute significantly to the formulation of workplace safety protocols and adherence to occupational health standards.
  • Ergonomics and Work Design: Unions may negotiate aspects related to ergonomic design and work processes to ensure that they adhere to stipulated safety and health norms.

3. Wage and Salary Management

  • Pay Scales and Increments: Negotiations regarding pay scales, annual increments, and other remuneration-related matters are significantly influenced by trade unions.
  • Bonus and Benefits: They also play an instrumental role in determining bonuses, insurance, and other additional benefits provided to employees.

4. Enhancing Employer-Employee Relations

  • Mediation and Conflict Resolution: Trade unions often mediate discussions between employers and employees, resolving conflicts and facilitating amicable solutions.
  • Building Relationships: They act as a bridge between the management and the employees, aiding in developing and maintaining harmonious relationships within the organisation.

Challenges Faced by Trade Unions

1. Globalisation and Outsourcing

  • Managing International Norms: Unions need to navigate through the complexities presented by globalisation, such as adhering to international labour standards and managing outsourced employees.
  • Addressing Varied Interests: Representing and addressing the varied interests of a globalised workforce can pose significant challenges.

2. Technological Advances

  • Adapting to Change: The advent of technology and mechanisation has altered the dynamics of work, requiring unions to adapt and address the new challenges posed by technological advancements.
  • Addressing Technological Unemployment: As certain roles become obsolete due to automation, unions need to ensure that displaced workers receive adequate compensation, retraining, and employment opportunities elsewhere.

3. Maintaining Relevance

  • Attracting Young Workers: Younger generations may perceive unions as less relevant in the modern working context, making it imperative for unions to evolve and showcase their significance.
  • Balancing Diverse Needs: Managing and representing the diverse and often conflicting needs of the modern workforce, especially with the rise of gig and remote work, necessitates innovative approaches from unions.

Role in Organisational Development

1. Skill Development and Training

  • Promoting Skill Enhancement: Trade unions can advocate for continuous skill development and training programs, ensuring that employees remain relevant and competitive in the ever-evolving market.
  • Facilitating Upskilling: They can establish collaborations with employers to develop and facilitate training and upskilling programs, enhancing career progression opportunities for employees.

2. Sustaining Organisational Culture

  • Fostering Healthy Cultures: Unions contribute to building and sustaining organisational cultures that value fairness, equality, and respect, thereby enhancing the overall work environment.
  • Mitigating Conflicts: By actively resolving conflicts and disputes, unions help in maintaining a harmonious organisational culture that fosters positive employee relations.

In essence, understanding the role of trade unions in HRM entails acknowledging their influence in safeguarding employee rights, shaping organisational practices, and influencing HR policies and legislation. They serve as a pivotal element in establishing a balanced and fair dialogue between the employer and the employees, thereby creating a harmonious, equitable, and productive working environment.


Trade unions wield significant influence in the negotiation of employee benefits, serving as a collective representative that seeks to ensure that benefits packages are equitable, competitive, and reflective of the workforce’s needs. Unions typically negotiate various facets of benefits, such as health care, pensions, and leave policies, ensuring that they are not only compliant with legal mandates but also cater to the specific needs and preferences of the workforce. This is executed through collaborative dialogues and negotiations with management, aiming to strike a balance between organisational capabilities and employee welfare.

Trade unions actively engage in negotiations concerning employee training and development to ensure that workers are not only equipped with essential skills but also availed opportunities for continuous professional growth. Unions might advocate for policies that guarantee periodic training, career progression opportunities, and perhaps, skill enhancement programmes. Ensuring that members have access to skill development can be pivotal in not only enhancing their employability and adaptability but also in ensuring they can navigate through technological advancements and evolving industry requisites adeptly.

During organisational change, trade unions typically assume a role that ensures the interests and wellbeing of employees are adequately considered and protected. They engage with management to gain insights into the nature, rationale, and potential impacts of the proposed changes. Unions might scrutinise aspects like potential layoffs, alterations in working conditions, or shifts in organisational structures, seeking to mitigate adverse impacts on employees. By participating in consultative forums, providing feedback, and negotiating terms, they aim to influence change processes to be as equitable and minimally disruptive to the workforce as possible.

Trade unions are pivotal in advocating for robust occupational health and safety (OH&S) standards within organisations. They ensure that companies adhere to stipulated OH&S guidelines and that the workforce is adequately safeguarded against potential workplace hazards. Unions frequently engage in dialogues with management to formulate, review, and enhance OH&S policies, ensuring they remain pertinent and effective. Additionally, they might facilitate training sessions for workers, enlightening them about safe practices, rights, and mechanisms to report safety concerns, thereby fortifying an organisation’s safety culture from within.

Trade unions deploy a plethora of strategies to safeguard employee rights within multinational corporations. These strategies often encompass engaging in international collaborations to forge a consolidated front in negotiating with entities that operate across borders. Utilising international labour standards, unions advocate for policies that are consistent across varied geographic locations, ensuring uniformity in the treatment of workers irrespective of their locale. Furthermore, they typically work towards ensuring that companies adhere to a common standard of employee rights, compensations, and working conditions, irrespective of the domestic legal frameworks within which they operate.

Practice Questions

Evaluate the impact of trade unions on the wage and salary management of a business.

An adept examination of trade unions' influence on wage and salary management recognises their imperative role in safeguarding employee interests by engaging in collective bargaining to negotiate remunerations, benefits, and increments. Trade unions exert a profound impact by ensuring that pay scales and increments are equitable, transparent, and reflective of employee contributions and market rates. Through steadfast advocacy, unions may influence employers to adopt pay structures that are competitive and fair, thereby ensuring employee satisfaction and mitigating wage-related disputes. The eventual wage structures emanate from collaborative dialogue between the unions and management, striving to balance organisational financial health with employee satisfaction.

Discuss the challenges faced by trade unions in the contemporary globalised and technologically advanced work environment.

Trade unions, in the modern context, grapple with myriad challenges stemming from globalisation and technological advancements. The proliferation of technology has spurred automation, potentially leading to workforce displacement, necessitating unions to advocate for adequate compensations and retraining for the affected workers. Globalisation complicates representation due to varied international labour laws and diverse worker interests, mandating an adept navigation through this intricate landscape. Furthermore, unions must evolve to maintain relevance amidst emerging work models, like remote and gig work, ensuring they robustly represent and safeguard workers' interests across varied employment modalities, whilst continually adapting to the rapidly transforming work environment.

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Written by: Dave
Cambridge University - BA Hons Economics

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