Contribution of Trade Unions for Employees, Organizational and Economic Growth

This literature review critically argues on the contribution of the trade union movement for the growth level of economic, organizational and personal growth of employees with the help of certain examples from various countries.

Running head: Trade Union
Trade Union

Trade Union 1
Contents
Introduction.................................................................................................................................................2
Analysis........................................................................................................................................................3
Employees growth level..........................................................................................................................3
Organizational growth level.....................................................................................................................8
Economic growth level..........................................................................................................................10
Conclusion.................................................................................................................................................14
References.................................................................................................................................................15

Trade Union 2
Introduction
As per De Sousa (2012) trade union can be defined as a group or association of workers in which
the workers associate in order to represent their interests or goals. The importance of trade
unions for the employees is that their members tend to have higher wages as compared to those
who are not associated with the trade unions.
The trade unions act as representatives for the workers in the context of legal matters. They also
protect the rights of workers. They are the main means of organizing and safeguarding the rights
of workers regarding their jobs. The collective bargaining agreement which is also known as the
union contract formulates the basic terms and conditions of work (Lillie, 2013).
The union helps in giving voice to the workers and provides them with a mode to gain a measure
of integrity and security on the job. Certain strategies are pursued by the unions which serve the
interests of the members (Emmenegger, 2014).
These include representations of the members and bargaining with the employers and hiring new
people. It also comprises of involving in political action and supporting policies for improving
the working conditions of the employees.
The unions are formed by the workers so that they are authorized to say over the workers, hours
of work, working conditions and many problems which arise in the relationship between the
employers and workers (Fernie, 2013).
According to the opinion of Chalmers (2013) trade unions are important as they assist in setting
standards for the level of skills, required education, wages, working conditions and quality of life

Trade Union 3
being led by the workers. Laws are also established by the unions which work for the
improvement of the conditions of a job for their members.
Workers have less power when they work on their personal level. So, acting together in a group
can have a real impact on the desired changes to be made in their favor. The trade unions act as
a collective voice for the workers. They act a watchdog for the workers and use their authority
for making sure that the rights of the workers are safeguarded under the law.
So, this literature review critically argues on the contribution of the trade union movement for
the growth level of economic, organizational and personal growth of employees with the help of
certain examples from various countries.
Analysis
Trade unions employ collective bargaining for the benefit of workers. They can help in the
economic, organizational and personal growth of employees in the following ways.
Employees growth level
As per Kaufman and Bennett (2017) trade unions have an enormous impact on the labor market
and societies. They assist the workers in placing their demands in front of the management while
avoiding conflicts. One of the benefits of being associated with the trade unions is that the
workers can initiate for collective bargaining with the management along with participating in
the training and leisure events at the workplace.
The trade unions are known to promote wellbeing at work. They manage all the issues
confronted by the workers at work. They do not charge anything from the organizations and

Trade Union 4
reduce the stress level of the employees. They improve the work-life balance of the workers and
increase their overall wellbeing.
It was further supported by Freeman and Han (2012) .According to their opinion, when the
employees have an effective voice and they have the ability to transform things at the workplace
such as safety and health, improving the supervisor’s attitude, then there are more likely to stay
at the company. It would directly affect the development of the organization.
So according to these two scholars, there is a positive impact of the collective bargaining on
absenteeism of the workers. Therefore, trade unions help in the growth of the companies. Trade
unions also encourage the participation of the workers as shareholders.
According to a survey, the perception of the workers towards the quality of work is more
positive in the companies where the trade unions act as their representative. It is crucial for all
the employers of all the sectors as high work quality can result in better productivity and less
labor turnover (Bosch, 2015).
According to the opinion of Alberti, Holgate and Tapia (2013), it can create influence on the
entire society surrounding those, thereby making propositions for developing the legislation
regarding their workplace. The members of the trade unions are entitled to a secure future with
regards to employment and membership advice and availing the services of a lawyer and legal
information.
The workers can also seek advice related to the generation of earnings upon their unemployment
and assistance of a shop steward at the workplace. They are also entitled to free of cost

Trade Union 5
membership and leisure activities such as cottages, holiday shares, discounts on trips and
insurances (Hyman, 2012).
The trade unions also represent the interests of the members in the private sector such as retail
trade, tourism, leisure time industry, tourism and restaurant, personal care and security services.
The members are provided with assistance and security during their work period (Fossum, 2014) .
As per Meardi (2012), the unions also verify that proper wages are paid to the workers and
whether the collective agreement is being followed at work. For example, in Finland , it is
considered normal for the employees to join the trade unions. In Finland, the Finnish trade union
is the main organization which represents the interest of around one million workers from 20
trade unions in the country.
The trade union safeguards and promotes the mutual interests of the employees with the help of
collective action. With the help of its leadership, it negotiates with the employers and the
management on issues such as labor contracts etc. Thus union representation and collective
bargaining are the keys to the growth of workers (Marginson, 2015).
The unions help the workers to gain an equal share in the wealth they create, thereby improving
their working conditions and assisting them in gaining job security. They help in transforming
the political, social and educational environments which are associated with the rights of the
workers. It includes the right to bargain, right to organize and the right to settle the terms and
conditions of employment (Culpepper and Regan, 2014).

Trade Union 6
The factors such as the establishment of minimum wages, norms for mandatory working hours
and improvement in the working conditions and provisions for health and safety have led to the
improvement in the quality of life of the employees (Richardson, 2013).
The trade unions help in the greater bargaining power of the workers. As individuals, the
workers have less bargaining powers and they cannot negotiate with the employer alone. They
would be in a safer situation if they join the unions.
Thus unions are powerful mediums which compel the management to accept the demands of the
workers in order to create better working and employment conditions. Moreover, the trade
unions help in minimizing discrimination done by the employers towards their employees
(Krueger, 2012).
As per Turner and D’Art (2012) discrimination is done on the basis of caste, sex and religion.
The trade unions oppose against discrimination done by the employer and force the management
for equal treatment of all the workers in the organization.
McBride (2018) believes that decisions regarding the labor are monitored by the labor unions
which create a positive impact on minimizing the discrimination. The trade unions also develop a
sense of security amongst the workers. They help the employees to safeguard themselves against
accidents, ill health and unemployment.
The unions also help in getting the retirement benefits of the workers and compel the
management for investing in the welfare schemes of the workers. The trade unions also conduct
various researches pertaining to campaigns and procedures for their members (Aspinwall and
Greenwood, 2013).

Trade Union 7
With the help of collective bargaining, the disadvantaged workers get a premium pay. For
example, in USA, black women get a premium of 34% if they are associated with the trade
unions. In this way, the trade unions help the employees to get better work conditions and pay so
that they remain satisfied with their jobs. It would further motivate the employees for working
hard thereby contributing to the success of the organization (Tapia, 2013).
As per Clauwaert and Schömann (2012) the trade unions also increase training in the workplace.
As per the study in Scotland, it has been observed that almost half of the employees associated
with unions believe that they would like to undertake training if it is organized through unions.
In cases where unions negotiate overtraining, 24% employee reported that they would like to
receive training at work.
They further ensure that safety and health regulations exist in the company and they have the
accessibility to a working environment which is safe. The trade union also executes the contract
of collective agreements which affects the relationship between the members and the signatory
parties (Egels-Zandén and Merk, 2014).
There are certain regulations in The Sultanate of Oman which regulates and manages the
provisions regarding the labor laws. Inspection of labor is amongst the significant responsibilities
of the Labor division of the Ministry of Manpower. At the central level, it is managed by General
Directorate of Labor Care (GDLC) ( Global Legal Group,2018).
Six departments are controlled by GDLC viz. Trade Unions, Office of Joint Inspection, Labor
Inspection, Occupational Health and Safety, Labor dispute settlement and Labor Services. So the
existence of the concept of trade unions in the Omani Law further strengthens their authority in
the industrial sector (International Labor Organization, 2018).

Trade Union 8
In respect of the Ministerial Decree No.95/2012, the regulation governs the creation, registration
and execution of activities of the labor trade unions and the General Federation of Oman Trade
Union (International Labor Organization, 2012).
The accountabilities of the trade unions are increasing in the current scenario but it has also been
observed that the actual involvement of the labors is still limited to a certain extent. The trade
unions sometimes lack the knowledge and experience for representing their members
authoritatively (Roy, 2014).
Although the Labor Conventions No.81 and 129 have not formerly consented in Oman its
government has complied with the labor laws regarding the establishment of trade unions in an
appropriate manner. It ensures greater protection of the rights of the workers at their workplaces
(International Labor Organization, 2017).
Organizational growth level
The workers associate with the trade unions to make sure that the management deals with them
in a just and fair way on the basis of a predetermined policy.They help in nurturing a long-term
relationship with the employer on the basis of four pillars named as employee satisfaction,
commitment and belongingness towards the company.
If the employee is satisfied and motivated, then he will surely contribute towards the productivity
and development of the company in a better way. The issue of improvement in the productivity
of labor has assumed a greater importance with globalization along with economic and social
crisis (Viner, 2014).

Trade Union 9
According to research in Canada, the insurance claims arising from the building sites have a link
between trade unions and safety arrangements. Low claims were received from the companies
where there was a prevalence of the trade unions (Gumbrell-McCormick and Hyman, 2013).
The members of the trade unions are more loyal to their employers. According to a theory of
Albert Hirschman, if the workers are not satisfied with the company and they cannot change or
leave it, then there is a higher rate of absenteeism in that company.
Thus the workers are eligible for sharing profits and become partners of the company. It ensures
their total involvement and participation in the decision making for maximum production along
with maintaining harmony at the workplace (Schnabel, 2013).
In this way, the trust and commitment can be encouraged amongst the workers. In Oman, the
employers sought a resort through the trade unions for facilitating their communication amongst
employers and employees.
It has also been argued by Holst (2014) that better governance systems and transparency can
facilitate sustainable growth and poor workers should be encouraged to participate for their
benefit. Trade unions promote gender equality in the socio-economic policies in order to secure
equal opportunities and treatment for females.
With the help of trade unions, the employers can communicate information about the policy of
the companies and other matters such as work and safety. The trade unions can thus disseminate
the information to all the members thereby resolving the issues between both of them and
contributing to the growth of the company (Chan and Hui, 2014).

Trade Union 10
In this regard, employers have taken various approaches to increase the number of trade unions
in Oman. They have also implemented various rights and restrictions associated with the trade
unions as per Omani Law.
The trade unions have the right to collective bargaining for a peaceful strike for improving the
employment and financial association but it is subjected to certain limits. So the employees who
are planning to involve in peaceful strikes must notify three weeks before the date of the strike.
Those employees who work at companies providing basic services to the public are not allowed
to strike.
Economic growth level
Trade unions are beneficial for transforming the economy as they fight for the inclusions of all
the workers. The labor and trade unions work on various platforms around the globe so it is
difficult to describe their roles specifically within the societies.
They pursue an internationalist outlook which puts them into the center of discussions on
economic transitions in a country.
They also promote economic growth thereby proving beneficial for the development of the
industrial sector. They also help in reducing accidents. They assist the management in proper
safety arrangements for the workers at the workplace to minimize and avoid accidents.
As per Lawrence (2016) it is crucial for the trade unions as their members have been on the
receiving end of the challenges brought by the process of globalization and economic situations.
Furthermore, trade union helps in reducing inequality. For example, about half of the trade

Trade Union 11
unions in the UK negotiate for the flexible working hours in a better way as compared to the
legal regulations and norms.
It has been assumed that free and strong trade unions are prerequisites for sustained national
development. It should be ensured that the workers are set free to organize. Once the unions are
established then they can perform their role in fighting with poverty and upgrading the economic
development of the country (Levinson, 2013).
However, it has also been argued that trade unions need to promote a right based approach to
economic development. In order to develop a holistic approach for advancement, the economic
rights should be pursued simultaneously with socio-economic rights by the trade unions
(Waterman, 2016).
As per Metcalf (2013) it is essential for the economies to evolve their capability for pursuing
strategies in order to improve the competitiveness of the enterprises in the local and international
markets. It, therefore, requires the active participation of the trade unions for assisting a
favorable climate of the industrial relations.
By the implementation of the proactive policies, the trade unions eradicate gender discrimination
and promote decent employment opportunities for the economic development of the country.
They also promote and institutionalize social dialogue beyond traditional industrial relations
(Troy, 2016).
These social dialogues determine the patterns of economic growth so that the profits can be
shared and the tradeoffs can be negotiated for the creation of more jobs in the country. They also

Trade Union 12
help in creating necessary space for macroeconomic policies implemented by Sultanate of Oman
(Haufler, 2013).
In order to promote economic development, the unions place the employment policies as the
center of the macroeconomic policies. The holistic strategies of trade unions develop the
fundamentals for promoting faster and employment-intensive growth. It would help in reducing
the poverty of the nation (Hafner-Burton, 2013).
The implementation of the labor market policies is suggested by the trade unions. These are
implemented within the framework of national economic policies so that the problem of youth
employment can be tackled (Conley, 2014).
Reinecke and Donaghey (2015) stated that the trade unions also help in the social protection of
all their members. They suggest the scaling up of expenditures on water, health and nutrition to
be provided to their members. They further suggest the administration to provide a safety net to
the employees who are confronted by the impact of changing economic relations.
They also help the administration in investing in human capital and extend the social security to
the poorest class of employees as well. They also harmonize their activities according to the
recommendations as provided by international organizations.
For example, it has been observed that trade unions play a major role in mitigating the income
inequalities in the USA. In the USA, unions have constrained the inequality of income beyond
their own membership ranks. They have also lobbied for the high minimum wages and provoked
the management to lessen the salaries of the executives.

Trade Union 13
They have also advocated for better access to health services thereby countering the channel
through which the inequality of income can pose a threat to the entire society. About 16 million
working men and women in the USA are exercising their rights and they are being represented
by the unions. These representations help in making organized labor among the largest
institutions in the USA (Ledwith, 2012 ).
The freedom of workers for associating with each other in the form of unions to bargain with the
employers is also known as collective bargaining. It is recognized as a fundamental human right
around the globe. In the US, it is safeguarded by the US Constitution and law and is supported by
many Americans.Furthermore, the trade unions can boost the British economy by £30 Billion
(Financial Times, 2017).
For example, the General Federation of Oman Trade Unions (GFOTU) in Oman works for the
development of the health and safety of the workers . It also develops the labor standards to be
implemented in various industrial sectors of the country (Rajasekar and Al Raee, 2013).
During the oil crisis in 2017, about 48 companies belonging to the oil sector terminated the
services of many employees. GFTU in association with Ministry of Manpower, Ministry of Oil
and Gas and Oman society for Petroleum Services assisted more than 5000 employees during
that period.
Some of them were hired in other companies and the others received compensation Furthermore,
on the occasion of International Women’s Day, the management of L& T Modular Fabrication
Yard in coordination with GFTU had also granted benefits to the workers.

Trade Union 14
In Oman, during 2017, 27 unions were formulated which was a 10% increase as compared to the
previous year (Baccini and Urpelainen, 2014).
Conclusion
This literature review can be concluded by saying that workers and trade unions are the
representatives of the interest and voices of millions of workers all over the world. The mission
of the trade unions is to provide decent work in a healthy environment at the employee level.
The trade unions ensure that the workers have the accessibility to public services like water,
sanitation and health along with training related to education and skills so that they achieve a
decent job.The main function of the trade unions is to defend the human rights and labor
standards and to promote their own growth which would be for the benefit of working men and
women.
Thus trade unions contribute to the economic and organizational development along with the
individual growth of the workers. The trade unions help the workers to participate in the
management of the company as shareholders thereby contributing to the organizational
development. It would further lead to economic development of the country.

Trade Union 15
References
Alberti, G., Holgate, J. and Tapia, M.( 2013) Organizing migrants as workers or as migrant
workers? Intersectionality, trade unions and precarious work. The International Journal of
Human Resource Management. 24(22), pp.4132-4148.
Aspinwall, M. and Greenwood, J.( 2013) Collective action in the European Union: interests and
the new politics of associability. UK: Routledge.pp.1-100.
Baccini, L. and Urpelainen, J.(2014) International institutions and domestic politics: can
preferential trading agreements help leaders promote economic reform?. The Journal of
Politics . 76(1), pp.195-214.
Bosch, G.( 2015) Shrinking collective bargaining coverage, increasing income inequality: A
comparison of five EU countries. International Labour Review. 154(1), pp.57-66.
Chalmers, A.W.( 2013) Trading information for access: informational lobbying strategies and
interest group access to the European Union. Journal of European Public Policy. 20(1), pp.39-
58.
Chan, C.K.C. and Hui, E.S.I.(2014)The development of collective bargaining in China: From
“collective bargaining by riot” to “party state-led wage bargaining”. The China Quarterly.
217(2017), pp.221-242.
Clauwaert, S. and Schömann, I.( 2012) The crisis and national labor law reforms: a mapping
exercise. European Labour Law Journal. 3(1), pp.54-69.

Trade Union 16
Conley, H.(2014) Trade unions, equal pay and the law in the UK. Economic and Industrial
Democracy. 35(2), pp.309-323.
Culpepper, P.D. and Regan, A.( 2014) Why don't governments need trade unions anymore? The death of
social pacts in Ireland and Italy. Socio-Economic Review. 12(4), pp.723-745.
De Sousa, J.( 2012) The currency union effect on trade is decreasing over time. Economics
Letters. 117(3), pp.917-920.
Egels-Zandén, N. and Merk, J.( 2014) Private regulation and trade union rights: Why codes of conduct
have limited impact on trade union rights. Journal of Business Ethics. 123(3), pp.461-473.
Emmenegger, P.( 2014) The power to dismiss: Trade unions and the regulation of job security in Western
Europe. USA: Oxford University Press. Pp. 1-20.
Fernie, S.( 2013) The future of British unions: introduction and conclusions. In Trade Unions .UK:
Routledge. Pp. 19-36.
Financial Times(2017)Trade unions have a role to play in Brexit Britain [online] Available from:
https://www.ft.com/content/9c07253e-97a5-11e7-b83c-9588e51488a0 [Accessed 15th November,
2018].
Fossum, J.( 2014) Labor relations. US: McGraw-Hill Higher Education. Pp. 1-50.
Freeman, R.B. and Han, E.( 2012) The war against public sector collective bargaining in the
US. Journal of Industrial Relations. 54(3), pp.386-408.
Global Legal Group(2018) Employment and Labor Law [online] Available from:
https://www.globallegalinsights.com/practice-areas/employment-and-labour-laws-and-
regulations/oman [Accessed 15th November, 2018].

Trade Union 17
Gumbrell-McCormick, R. and Hyman, R.(2013) Trade unions in Western Europe: hard times,
hard choices. Oxford : Oxford University Press. pp. 1-20.
Hafner-Burton, E.M.( 2013) Forced to be good: Why trade agreements boost human rights. NY: Cornell
University Press. Pp. 1-20.
Haufler, V.( 2013) A public role for the private sector: Industry self-regulation in a global
economy. Washington DC: Carnegie Endowment. Pp. 1-50.
Hyman, R.(2012) Trade unions, Lisbon, and Europe 2020: From dream to nightmare. International
Journal of Comparative Labour Law and Industrial Relations. 28(1), pp.5-28.
Holst, H.( 2014) ‘Commodifying institutions’: vertical disintegration and institutional change in
German labour relations. Work, employment and society. 28(1), pp.3-20.
International Labor Organization (2012) The Ministry of Manpower Ministerial Decision No.
570/2012 [online] Available from:
https://www.ilo.org/dyn/natlex/docs/MONOGRAPH/91588/106392/F1625820612/Oman
%20legal-196%20ev.pdf [Accessed 26th October, 2018].
International Labor Organization (2017) C081 - Labour Inspection Convention, 1947 (No. 81)
[online] Available from: https://www.ilo.org/dyn/normlex/en/f?
p=NORMLEXPUB:12100:0::NO:12100:P12100_INSTRUMENT_ID:312226:NO [Accessed
12th November, 2018].

Trade Union 18
International Labor Organization (2018) Oman: Labor Inspection Structure and Organization
[online] Available from: https://www.ilo.org/labadmin/info/WCMS_150276/lang--en/index.htm
[Accessed 26th October, 2018].
Krueger, A.O.( 2012) Free trade agreements as protectionist devices: Rules of origin. In Trade,
Theory and Econometrics. UK: .Routledge. pp. 113-124.
Kaufman, B.E. and Bennett, J.T. ( 2017) What do unions do? A twenty-year perspective. In What Do
Unions Do? UK: Routledge. Pp. 9-19.
Lawrence, E.( 2016) Gender and trade unions. UK: Routledge.pp.1-100.
Ledwith, S.( 2012) Gender politics in trade unions. The representation of women between
exclusion and inclusion. Transfer: European Review of Labour and Research. 18(2), pp.185-199.
Levinson, C.(2013) International Trade Unionism (Routledge Revivals). UK: Routledge.pp.1-
100.
Lillie, N. ( 2013) A global union for global workers: collective bargaining and regulatory politics in maritime
shipping . UK: Routledge.pp.1-100.
Marginson, P.( 2015) Coordinated bargaining in Europe: From incremental corrosion to frontal
assault?. European Journal of Industrial Relations. 21(2), pp.97-114.
McBride, A.(2018) Gender democracy in trade unions.UK: Routledge. Pp. -1-100.
Meardi, G. (2012) Union immobility? Trade unions and the freedoms of movement in the
enlarged EU. British Journal of Industrial Relations. 50(1), pp. 99-120.

Trade Union 19
Metcalf, D.(2013) trade unions: resurgence or perdition? An economic analysis. In Trade Unions .UK:
Routledge. Pp. 101-135.
Rajasekar, J. and Al Raee, M.( 2013) An analysis of the telecommunication industry in the
Sultanate of Oman using Michael Porter's competitive strategy model. Competitiveness Review:
An International Business Journal. 23(3), pp.234-259.
Reinecke, J. and Donaghey, J.(2015) After Rana Plaza: Building coalitional power for labour
rights between unions and (consumption-based) social movement organisations. Organization.
22(5), pp.720-740.
Richardson, J.( 2013) Collective Bargaining. In An Introduction to the Study of Industrial
Relations . UK: Routledge. pp. 231-258.
Roy, J.( 2014) On the robustness of the trade-inducing effects of trade agreements and currency
unions. Empirical Economics. 47(1), pp.253-304.
Schnabel, C.( 2013) Union membership and density: Some (not so) stylized facts and
challenges. European Journal of Industrial Relations. 19(3), pp.255-272.
Tapia, M.(2013) Marching to different tunes: Commitment and culture as mobilizing mechanisms of trade
unions and community organizations. British Journal of Industrial Relations. 51(4), pp.666-688.
Troy, L.( 2016) Beyond unions and collective bargaining. UK: Routledge.pp.1-100.
Turner, T. and D’Art, D.( 2012) Public perceptions of trade unions in countries of the European Union: A
causal analysis. Labor Studies Journal. 37(1), pp.33-55.
Viner, J.( 2014) The customs union issue. Oxford: Oxford University Press. pp. 1-100.

Trade Union 20
Waterman, P. (2016) Labor worldwide in the era of globalization: Alternative union models in the new
world order. US: Springer. Pp. 1-50.