The Use Of Labor And Trade Unions Business Essay

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Labor unions, or trade unions are those workers who works in an organization who fight for their rights and needs which are the so called working conditions. These working conditions would motivate employees to work hard and help to achieve organizational goals. There is always a leader in labor unions and these leaders would always fight for their rights in an organization and this may include the negotiation of wages, working rules, complaint procedures, rules governing hiring, firing and promotion of workers, benefits, workplace safety and policies.

Everyone knows that labor unions help employees to fight for their rights. Most people think that the existence of labor unions is to against organizations and employers. Employers always find ways to eradicate or to prevent the formation of labor unions. However, not many people recognize that the existence of labor unions may benefit the company. Even some employers agree that labor unions help them to prevent or to some issues regarding employees. Is it a good things to have a labor unions in the company? One of the most successful retail company in the world- Wal Mart, which have two millions employees all over the world has been criticized because of their policies against labor unions. Their used managerial surveillance and forces the employees in the department to resign or closed the entire department to avoid the employees joining or forming any labor unions. The anti-union actions of Wal Mart has been criticized by all the labor unions expert and also the plan of opening new store in other country is more difficult due to disagree to form a unionized work force. According to Wal Mart they are not anti-union company but more to pro-associate. They think that employees do not need to go through a third party to settle their in house issue which is a large expenses. They said that, they welcome idea and discussion from employees and even implent profit-sharing with employees to persuade them from joining labor unions. Why is Wal Mart doing that? Can the management settle all their labor issue without labor unions? What is the impact of labor unions if they do exist in the company? Below are the advantages and disadvantages of having a labor unions in the company from the view of employers.

Advantages of Labor Unions

Contract Issue

Having labor unions in organization can reduce the issue of contracts when they are structured. Well structured contracts are the basic of having a good relation between employees and employers. Labor unions in a company help to monitor the rule and regulation when the contract was assigned. This can prevent employers taking advantage over the employees and to protect their benefits at the same time. Employer can avoid getting involved in unethical issues due to constructing poor contracts. Besides that, employers can save a lot of time to review the government policies when constructing employees' contracts. Whenever employers have doubt regarding contract policies or government policies, they can consult the labor unions which will provide them useful information as not every employers have the knowledge to deal with labor laws. This helps employers to save a lot of time and costs.

Qualified Labor Force

Disgruntled employees, bad attitude, lack of motivation are some of the common problem organizations face with. These employees may be once the best employees in an organization. However, lack of training, unclear company's goal, unmotivated have cause these problems to occur. Eventually, they will lead to poor quality of output due to unqualified labor force, hence, organizations' images and profitability will be affected. When there is unionized work force in an organization, the quality of labor force can be ensured. For example, one of the responsibility of labor unions is to provide high quality work force. Therefore, the quality of employees is always under the surveillance of labor unions. Research on quality of employees should be done in certain periods to observe and ensure that they are always in the best condition. Employers also can transfer the costs of training to labor unions and this helps to reduce the organization's expenses while maintaining high quality work force. This fact also proves that labor unions do not only provide protection to the employees only but they are also capable of doing the same for employers.

Employee Satisfaction

It is undeniable that a unionized work group will cost an organization to pay more salaries and other benefits. Labor union will continuously try to bargain the best pay rate for their members. However, if we look at the matter in a positive way which is when employees are satisfied with their pay, they will feel more secure and tend to put in more effort to their jobs. Therefore, a more satisfied and cooperative working environment can be formed. Besides that, it is also easier for employers to negotiate with a single entity of work force as compared to an unorganized work force. Employers can save a lot of effort in bargaining with issues regarding pay rates. In a non-union place of business, wages and other compensation are settled privately. There is no guarantee that two people doing the same job--with the same qualification receive the same salary and benefits. A labor union, however, ensures that all wages and compensation are written into the union's contract. In the end, a well balance relation between employers and employees can be maintained as it does not involve direct discuss with the employees.


Employees' safety is an issue that been discuss many times recently. The safety of employees is one of the most concerned issues of labor unions. A lot of safety regulation have been reviewed by labor unions from different fields and have been enforced in every company as the mandatory safety policies by the government. Some employers found that having labor unions in organizations help them to review the safety policies from time to time to protect employees from any injuries and this benefit both parties. Organizations can avoid paying huge amount of compensations due to poor safety policies and this will lead to the formation of a healthy and joyful working committee.


Organizations which support the existence of labor unions tend to have a more stable workforce. This is because labor unions help employees to speak out their mind and any unsatisfactory can be minimized. Benefits of employees are well taken care of and the rate of resignation is reduced as well. As the result, organizations spend lesser to recruit new employees and save more time in providing sufficient training for them. A business without union representation can often change its expectations of workers without notice. In a union workplace, these responsibilities are specifically determined in advance. This benefits both employers and employees. Employees enjoy more consistency because they know what is expected of them. Employer benefit from a more content work force and less time spent on training to enforce constant changes. Employees' loyalty will be formed and sense of belongingness to a group is created when relationships within a workplace and community is developed. There is no reason for employees to leave the organizations when they have good pay, good and sufficient benefits, as well as good relations with the organizations themselves.


Everyone is treated equally in a union workplace. Favoritism does not play a part in who gets promoted or what salary increases are rewarded. The union contract specifies when raises occur, and what amount of time with the company qualifies the worker for a promotion. Everyone is subject to the same guidelines and job responsibilities.

Disadvantages of Labor Unions

Engage in economic strikes

One of the main disadvantages of labor unions are that its ability to engage in economic strikes. Engaging in economic strikes is not a matter which can be taken lightly of as it is a serious matter and requires a thorough analysis of the likelihood that the strike will be successful before it is undertaken. Officials of labor unions must be experienced enough and have sufficient knowledge about various social as well as economic factors which will be brought to bear on striking employees before they make a decision. Poor or incorrect judgments regarding engaging in a strike can be harmful to employees who are in support of the strike and actually are engaged in the activity itself. Organizations whose employees are on a strike have the legal right to continue operating their business by permanently replacing them with other employees who need not to be discharged when the strike ends. Under such circumstances, employees who are on a strike can expect to be recalled to continue working when there is an employment vacancy and they have sufficient qualification for the jobs. For this to work, it is also assumed that the employees who are on a strike have not already regular equivalent employment from other organizations and they have also made an unconditional request to reinstate their positions. Besides that, the striking employees are also not entitled to immediate and unconditional reinstatement when their jobs are being taken over by other employees of permanent replacements. Although employees cannot be discharged for engaging in a striking activity, the law does not guarantee them a successful outcome when the strike is started.

Loss of individuality

Loss of individuality is another disadvantage of labor unions. When a labor union has been certified as the exclusive representative of employees in an organization, employees who are in the particular labor union become members of an overall bargaining unit which means that majority. This also means that the ruling majority may not be sympathetic with each of the members' employment needs individually as it is hard to please everyone when they are so many people. Furthermore, individual agreements between the employees and the management of an organization is not allowed as the employer is obliged to deal exclusively only with the labor union. The leaders of the union will make decisions for all of their members which many people may deem not to be in their best interests individually. Therefore, loss of individuality is one of the main concerns for many employees as well as the loss of negotiation opportunity for themselves in an individual arrangement.


Another disadvantage of labor unions is the costs which employees need to bear. Majority of the collective bargaining agreements require all of their fellow union members to support the union in terms of financial as a condition for their continued employment. The cost of a labor union membership varies widely among the various unions available but regardless of the amount, dues represents an expense to the employees that otherwise they would not have to pay for. These dues are deducted automatically from each paycheck. Even if you choose not to be part of the labor union, you are often not exempt from paying these dues out of your wages. If you disagree with the decisions of the union, you still must pay for the representation. It is provided in the Federal Law that employees may choose not to join a labor union formally regardless of the language in the agreement but they still may be required to pay certain initiation fees. Moreover, the labor union can discharge any employees who fail to pay the required dues and fees unless the right-to-work law has been enacted in the state where the business operates.

Power of exclusive employee representation

The power of exclusive employee representation is a disadvantage to employees in any organizations. This power requires a union to negotiate on behalf of all the employees in the bargaining unit in a fair manner regardless whether they are members of any labor unions or not. On the other hand, labor unions have been granted tremendous discretion by the law to fulfill their responsibilities as bargaining representatives. It can be extremely difficult to force labor unions to side with any particular employees on a matter which they feels unmeritorious. In a nutshell, the power of exclusive employee representation gives labor unions the rights to advance their group's interests more than the interests of individuals. Besides that., in a union workplace, the majority makes decisions for the entire workforce. Even the employee disagree with the decision of the majority, they have no voice. Union representation can be a powerful force for change in favor of a company's employees, but that powerful force effects change in the direction the majority wants to go. This will causes employee to be unmotivated.

Violate the union's constitution

Members of a labor union can be fined or disciplined by their respective unions if they are found to be engaged in activities which violate the union's constitution and by-laws is another disadvantage of labor unions. Activities such as crossing a picket line when engaging themselves in a strike or seeking to be represented by another labor union are among the activities which can cause members of a labor unions to be disciplined by their respective unions. Employees who are not a member of any labor unions however are not subject to any disciplinary action by unions and employees who are working in a private-sector can resign from the labor union anytime to avoid union rules.


Unions can inhibit the ability of a company to remain competitive. Union wages are often much larger than those of non-union workers. This causes the price of goods produced by union workers to be higher than the competition. Also, productivity is not rewarded or encouraged by a union structure. Less productivity reduces the ability of a company to compete for business.

The following next case shows the positive image of a company named Kentucky Labor Cabinet from its leader.

"I am honored to have been named Acting Secretary of the Kentucky Labor Cabinet by Governor Beshear. I pledge to you, as I did to The Governor, that I will give my maximum effort in carrying out the mission of this office. We are fortunate in Kentucky to have a leader such as Governor Beshear to guide us through these tough economic times. The Governor recognized early in his administration the importance of our workforce by elevating Labor back to Cabinet status and concentrating on retaining, expanding and attracting jobs for those workers. He has continued to emphasize the importance of a safe, healthful and quality workplace that is conducive to cooperation between management and workers. We at the Labor Cabinet have the opportunity to work with many of our finest employers in a cooperative effort to ensure that this atmosphere continues to thrive and spread across our Commonwealth. The success of our voluntary partnership programs in promoting a safe and healthy workplace is unsurpassed in the US and helps lead to an environment of economic opportunity for all. As employers are strained by the severe economic forces, some choose to cut corners on safety or fail to compensate workers equitably. Although we at the Labor Cabinet have experienced the same economic stress, we continue to respond vigorously to those workers who are endangered in the workplace whether physically or financially. The Labor Cabinet has experienced eight budget reductions in the past three years but our employees continue to perform admirably under these conditions in carrying out our mission. I want to thank them for their commitment and dedication. I want to extend my congratulations and best wishes to Secretary JR Gray and his wife Yvonne on his retirement. JR dedicated the greater portion of his life to the benefit of Kentucky's working men and women. His career in the Legislature was unequaled in service to working families and as Labor Secretary he led the way in re-establishing the Cabinet to its previous stature. Thank you JR and we wish you many years of happiness and relaxation. As I begin my tenure as Labor Secretary, I want to thank all of you who have called or written with words of encouragement and congratulations. As always, my door is open and I am only a phone call away. I will look forward to your wise council as we work together with Governor Beshear and other leaders to move our Commonwealth forward for the common good".

In the case above, it is an honor for labors to be treated nicely in Kentucky's Labor Cabinet. Each and every employees and labor had been treated equally and everything is nicely done. There are organizations which need labors and there are organizations which hardly use labors, but being a responsible company it involves true commitment towards all the employees and making them work together in a very nice environment. Kentucky's view towards their labor is truly important as they work as one to achieve their company's mission and goal. The more they cooperate together, the further the aim for the company.

The impact that labor unions and labor-management relations have on organizations differs according to the type of relationship that exists between union representatives and organizational management. In organizations that employ trades people and skilled laborers, the relationship between labor and management is often amicable because employers have been conditioned to expect union representation within the trades. In other organizations, the relationship between management and labor is strained, particularly during contract negotiations when neither party wants to make concessions. Likewise, the relationships between union employees and their employers largely depend on the ability of union and management to work together.