Use of trade union mediation by todays employers

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Discuss the claim that increasing number of employers are realising that, rather then treating their employees as individuals, there is a "positive business case for dealing with their workforce through unions" - Assignment by Hemant Ghosh

This paper will attempt to investigate the argument that the employers today are in favour of trade union mediation for reaching out to their employees. In order to analyse this, we first need to ascertain the trade Unions of today, which are a whole lot different in their "Approach" to the work place environment. This change in "Approach" can be attributed to the new strategies deployed by the trade Unions to resurrect themselves after the decline faced by the unions in 1980s and 90s. In order to evaluate the above statement it is necessary to analyse the following:

Essence of Trade Unions and its decline

The trade union renewal - concept of "Social Partnership".

The Trade Unions' Raison d'être

An Employer's Raison d'être


The Essence of trade Union

The earliest examples of Trade unionism can be traced back to the Medieval Guilds of Europe. The basic aims of these guilds were to protect and enhance their members' livelihoods through controlling the instructional capital of artisanship and the progression of members. While the basic aims differed slightly it was the concept of improvement through collective bargaining which was the common essence in both. A trade union can be defined as:

A trade union "is a continuous association of wage earners for the purpose of maintaining or improving the conditions of their employment." History of Trade Unionism (1894) by Sidney and Beatrice Webb

A modern definition by the Australian Bureau of Statistics states that a trade union is "an organization consisting predominantly of employees, the principal activities of which include the negotiation of rates of pay and conditions of employment for its members."

The definitions above summarize the changing phases of the Trade Union. In early 19th century the definition was centred on the thrust area - 'improving and maintaining condition of employee'. While the second definition is centred on the Collective Bargaining, thus bringing the out the changing behaviour of the trade unions over the decades. The behaviour of trade union was best characterised by Alan Flaunders (1970) that the main function of Trade Union was to protect the conditions of work place and maintain equilibrium in the status of their members from employers and other groups of workers/their trade unions. This can perhaps be also referred as the very essence for the existence of trade Unions.

The Decline of Trade Unions

The memberships of the trade unions reached its zenith around 80s, however from then on there has been a sharp decline in the number of membership. In UK context the drop has been most significant. As estimated (BERR) From 7.8 million in 1997, the membership has declined to 6.9 million in 2008. The traditional reasons for this rise and decline as argued by Prof Metcalf in BJIR-"British Union Resurgence or Perdition?" can be classified under the following headings:

Alterations to the composition of workforce and jobs;

The business cycle;

The role of the state;

The attitudes of employers;

The reactions of individual employees to trade unionism

The strategic approach and structures of the unions.

The traditional explanations dealt at various journals and forums indicate considerable interaction among them, particularly the last three. The strategic policies and Union structures in the new millennium have been structured to facilitate single workplace unions, work councils and partnerships. This has greatly affected the employers' attitudes as well as the individual workers' membership decisions towards the unions. The stance of the state - which affects the tone of labour relations - also helps determine the degree of affection or hostility towards unions shown by employers and workers. It is because of this, that countries like Sweden, Germany and Japan which enjoy a higher degree support from the government have a better density of memberships in the trade Unions even in times where Unions all over the world are facing a grim membership scenario. But whatever the reason be, it is surely a fact that by 80s and 90s the trade unions were at their 'Nadir.

The trade union renewal

The decline provided an opportunity for the trade unions to introspect. In a bid to survive the Unions have undergone a complete phase shift. They have identified that future membership trend will depend on the Union's ability to persuade their the employer to recognise their importance and convince employees to their usefulness not as an instrument of Collective Bargaining but that of furthering and developing the ability of their members. According to Edmund Heery, John Kelly and Jeremy Waddington in their work "Union Revitalization in Britain" suggest that the main strategies being followed by the trade Unions in their effort to revitalise can be enumerated as follows:

(a) Organising including Servicing model

(b) Mergers

(c) Links with international bodies

(d) Coalition building

(d) Social partnership with employers

(e) Relations with government.

Of all the above mentioned strategies, more and more Unions are either adopting Organising or the Social Partnership as a primary strategy towards the revitalisation. However it is the Social Partnership which seems to be the new 'mantra' for the millennium. The Social Partnership can be defined as a relationship between Unions, Workers and Employers based on a high degree of co-operation and trust in pursuit of shared objectives or mutual gains (Ackers and Payne, 1998; Kochan and Osterman, 1994). The Partnership agreements in general consist of three vital components: the Union's concessions to the employer; Union rights to information and consultation over strategic business decisions; and undertakings to employees on job or employment security. The formula is to have a agenda based on consensual, occupational interests like training, reskilling and participation, work place relations thriving in cooperation, mutual trust and above all, mutual gains. (Guest and Peccei, 1998; Kochan and Osterman, 1994; Leisink, 1993).Thus this model is based on 'cumulative tripartite advantage'. While the employee gains from the advantage of cumulative bargaining and concept of an identity, the gains for Union and employers are enumerated as follows:

Social Partnership- The Trade Unions' Raison d'être

One of the important aims of Trade Unions was to extend the role of trade unions to areas which were previously under regulated or under represented. This is also suggested by Ackers and Payne in 'British trade unions and social partnership; rhetoric, reality and strategy'-"Where as 1980s TUC 'New Realism' was a defensive, reactive accommodation to the inescapable reality of declining union and rising employer power, social partnership appears as a more proactive policy with an expansive vision of the parts union might play in British and European society". Thus the Union have always tried to find a role for themselves in the architecture of HRM. This shift also has a bearing from the fact that labour and capital are now on a common path constructed around the legitimacy of the market and the accepted dominion of business. (Hyman 1994; Regini, 1995). So the Union finds Social Partnership as an instrument which provides them a greater degree of legitimacy in their role and helps influencing the work place environment in a newer manner.

Social Partnership- An Employer's Raison d'être

It is evident that the only way out for the Unions to win the employer trust is to do it by building responsible Social Partnerships at workplace. This will not only foster a good working condition but will also result in employers giving full support to the Unions. Taking a lead from the successful industrial structures from countries such as Germany, Sweden and Austria, one can clearly see an effective role of the trade unions in the future. German model of industrial relations (like that of similar social democratic and corporatist countries such as Sweden and Austria) remains structured around trade unionism and collective bargaining. Strong unions and industry-level bargaining are the prerequisite for the successful works council's operations, and the managing problems of collective action, that arise around training and wage issues (Thelen 2000: 158-63). These examples provide us with a sufficient cause for believing in the concept of "Social Partnership".

The rationale for Management is very much based upon the basic concepts of HRM itself, i.e. -the people management or involvement driven management. The basic aim of any employer is to increase productivity, thus increasing the profits, this can more effectively be achieved in an environ where the employers have the full support of the Unions and unions assist employers by providing training and reskilling to its members. The soft HRM model of Training and development, Job enrichment, "Workfarism"-Welfare in Work Place, can successfully be implemented in environment of mutual trust and positivism between the all three sides of a work place- the Employer, Employee and the Union. Thus it enables Management to move from Win-Lose equation to a slightly advantageous equation of Win-Win relationship. (Kochan and Osterman, 1994: 227, Leisink, 1993). This seems like an appropriate reason but is not the only reason. The work place environment is very dynamic and thus has another binding agent - The Government Legislations. The Government policies worldwide in the new millennium are shifting towards greater state regulations in regards to the work place environment e.g. the ERA bill in the UK. Thus furtherance of Social partnership can also be viewed as a calculated and a pre-emptive move by the employers. One of the another major advantage to the employers as pointed out by Stewart and Wass (1998) is, that Social Partnership can assist management change programmes by providing a certain degree of legitimacy in the eyes of the employers. Further more it is far easier for the employer to deal with issues related to employees in a collective forum than individually. This not only saves the valuable time but also saves on valuable resources.


While the above paragraphs highlights the advantages gained by Unions and Employers, it is also a fact that the rivalry between "them" and "Us" is deep rooted and still plagues the work place. The employers try to avoid the issue of Union recognition by either using

The suppressionist strategy The purpose of this strategy is to kill off or sabotage trade Unions from getting to the stipulated numerical thresholds set by the ERA. The strategy is based on intimidation and creating an atmosphere of fear and trepidation.

The substitutionist strategy This strategy seeks to make the organisation 'an issue-free company', to use the antiunion consultant phraseology, whereby the employer tries to supplant the union role by attempting to show that the union is unnecessary by resolving, or being seen to resolve, grievances and establishing 'independent' and non-union related mechanisms for resolving grievances and giving expression to employee 'voice'.

(Gall,G and Macay,S. 2001)

Similarly the Unions too try to outrival management by championing alternative strategies such as 'The New Unionism' project, which are based upon assertive recruitment campaigns. These drives clearly contradict the desire for a closer relation with the employers. (Taylor and Ramsay, 1998; Walt, 1998). Thus in order to implement the Social Partnership at work place it is important that all concerned

sides; Employee, Employer and the Union adapt a positive attitude of consensus rather than confrontation. The concept of partnership is based on two factors; Mutuality and Trust. It is imperative that for an effective and meaningful partnership to exist at a work place both the above factors are omnipresent. As is evident from the successful models of countries like Germany, Austria and Sweden, it is safe to presume that Social Partnership offers a Win-Win situation for all, which furthers a safe, productive and employee friendly work environ. However one of the most important considerations for the trade unions should be the degree of separation it should maintain from the Management. The fact that unions in furthering the cause may at times appear to be employer centric, which can make Unions appear as if controlled by employer. This would surely mean a death knell for the Unions. Hence the unions need to maintain their neutral stance amidst the employee and employer, thus providing the correct equilibrium to the balance and achieve tripartite benefits for the work place.