Bangladesh University of

Business & Technology

An Assignment on Trade union

Human Resource

Practices in Bangladesh

Course code: HRM407

Date of Submission: 02-01-2016

Submitted to:

Ms. Nargis Begum

Lecturer

Department of Management

(BUBT)

Submitted by:

Group name: Aristotle

Sl. Name Id Remarks

01. Md. Ekramul Haque 12131101313

02. Sawon Mahamud 12131101414

03. Prianka Rani Barua 12131101286

04. Tousifa Dilshad 12131101373

Executive Summary

Despite some progress in advancing the agenda on aid effectiveness for development results,

trade unions contend that much more needs to be done if the Paris Declaration/Accra agenda for action processes are to move significantly forward in terms of real development

effectiveness. Given the shortcomings of the neo-liberal paradigm that has dominated development policy-

making and caused persistent poverty and a huge decent work deficit, trade unions call for a more comprehensive development paradigm that shifts from aid to development effectiveness.

Development effectiveness is defined by trade unions as the generation of positive social outcomes in terms of decent work, social protection, social dialogue, respect for human and trade union rights, gender equality, environmental sustainability, and the enjoyment of decent livelihoods and well being by all. To achieve development effectiveness, trade unions call for

the adoption by the Fourth High Level Forum of a Busan Declaration on Development Effectiveness which should address three major goals:

I) Achieving development effectiveness,

II) Realizing the commitments made on aid effectiveness, and III) Supporting trade union and CSO’s as development actors in their own right.

Table of content

Sl Content name

01. Introduction 02. What is trade union

03. Objectives of trade union

04. Why do workers join trade union 05. Theories/Approaches of trade union

06. Weakness/Limitations of trade union

07. Reasons for Political involvement

08. Measures suggested making trade unions more effective 09. Conclusion

10. Bibliography

Introduction

The project "Trade union" was designed to address the gap in representation of workers and

trade unions in international environmental processes at UNEP, MEAs, and other UN

constituencies. The project targeted workers and trade unions due to their ability to facilitate

debate around the social aspects of sustainable development while at the same time

contributing to the debate on economic and environmental dimensions. The project focused

broadly on capacity building, adaptation of selected case studies and awareness -raising.

The project aimed to contribute towards improving environmental and sustainable

development policies by leveraging the views, practical experiences and commitment of

workers and trade unions. The goal was to provide grounds for multi-stakeholder dialogue and

lay the foundations for a conceptual framework on the inter-linkages between labor and

environment. The project also aimed at contributing to improve the gender imbalance in

representation at decision making levels of the trade unions, and further, though a long term

goal, to assist in poverty reduction through a rights-based approach to ecosystem services.

The specific objectives of the project were to:

increase participation of workers and trade unions in international environmental processes;

increase workers and trade unions´ capacities to replicate/adapt case studies on

environmental issues in their workplaces and communities, and; increased-awareness of the environmental issues among workers and trade unions and

how they can potentially affect their workplaces and work life.

The project was implemented in four regions: Africa, Asia Pacific, Eastern Europe and Latin

America and the Caribbean.

What is trade union

Also known as a labor union, labor organization, collective bargaining unit or, simply, a union.

At common law, a trade union was much like a general partnership, the trade union having no

legal person distinct from the members. Membership was voluntary and the members were

the union.

In contemporary labor law, trade unions have separate legal personality from their members. A

union may own property, sue and be sued - just like a corporation.

The Trade Union and Labor Relations Act 1974 (UK): "Trade union means an organization (whether permanent or temporary) which ... consists wholly or mainly of workers of one or more descriptions and is an organization whose principal

purposes include the regulation of relations between workers of that description or those

descriptions and employers or employers' associations....

The Canada Labor Code, at 3(1): "Trade union means any organization of employees, or any branch or local thereof, the

purposes of which include the regulation of relations between employers and employees."

Objectives of trade union

The objectives of trade union are as follows:

A. Wages and Salaries:

The subject which drew the major attention of the trade unions is wages and salaries. Of

course, this item may be related to policy matters. However, differences may arise in the

process of their implementation. In the case of unorganized sector the trade union plays a

crucial role in bargaining the pay scales.

B. Working Conditions:

Trade unions with a view to safeguard the health of workers demands the management to

provide all the basic facilities such as, lighting and ventilation, sanitation, rest rooms, safety

equipment while discharging hazardous duties, drinking, refreshment, minimum working hours,

leave and rest, holidays with pay, job satisfaction, social security benefits and other welfare

measures.

C. Discipline:

Trade unions not only conduct negotiations in respect of the items with which their working

conditions may be improved but also protect the workers from the clutches of management

whenever workers become the victims of management’s unilateral acts and disciplinary

policies. This victimization may take the form of penal transfers, suspensions, dismissals, etc. In

such a situation the separated worker who is left in a helpless condition may approach the

trade union. Ultimately the problem may be brought to the notice of management by the trade

union and it explains about the injustice met out to an individual worker and fights the

management for justice. Thus, the victimized worker may be protected by the trade union.

D. Personnel Policies:

Trade unions may fight against improper implementation of personnel policies in respect of

recruitment, selection, promotions, transfers, training, etc.

E. Welfare:

As stated earlier, trade unions are meant for the welfare of workers. Trade union works as a

guide, consulting authority and cooperates in overcoming the personnel problems of workers.

It may bring to the notice of management, through collective bargaining meetings, the

difficulties of workers in respect of sanitation, hospitals, quarters, schools and colleges for their

children’s cultural and social problems.

F. Employee-employer relation:

Harmonious relations between the employees and employer is a sine quo non for industrial

peace. A trade union always strives for achieving this objective. However, the bureaucratic

attitude and unilateral thinking of management may lead to conflicts in the organization which

ultimately disrupt the relations between the workers and management. Trade union, being the

representative of all the workers, may carry out continuous negotiations with the management

with a view to promote industrial peace.

G. Negotiating machinery: Negotiations include the proposals made by one party and the counter proposals of the other party. This process continues until the parties reach an agreement. Thus, negotiations are based on ‘give and take’ principle. Trade union being a party for negotiations, protects the interests of workers through collective bargaining. Thus, the trade union works as the negotiating machinery.

H. Safeguarding organizational health and the interest of the industry: Organizational health can be diagnosed by methods evolved for grievance redressed and

techniques adopted to reduce the rate of absenteeism and labor turnover and to improve the

employee relations. Trade unions by their effective working may achieve employee satisfaction. Thus, trade unions help in reducing the rate of absenteeism, labor turnover and developing systematic grievance settlement procedures leading to harmonious industrial relations. Trade

unions can thus contribute to the improvements in level of production and productivity,

discipline and improve quality of work life.

Why do workers join trade union

Human beings are rational creature. They usually act upon rationally in different spheres of their lives. Similarly, workers join a union with a rationale approach whether joining a union will be beneficial or not. This can simply be decided by making a cost-benefit analysis in this regard. The excess of benefits over costs, i.e., profit or reward, justifies workers’ joining to a trade union. Researchers have devoted a great deal of time and effort to study “why do employees choose to join a union.” They have failed to report a common list of reasons that apply to all organizing efforts. Nonetheless, there is a general agreement among the labor experts that certain issues are likely to lead to an organization drive by workers Major ones among them are the following:

Job Security:

Employees need to have a sense of job security and want to be sure that management will not make unfair and arbitrary decisions about their employment. They look unions to ensure that their jobs are duly protected against lay offs, recall, promotion, etc.

Wages and Benefits: Employees work for livelihood, i.e., bread-and-butter. Obviously, bread-and-butter issues of employees are always important issues in their unionization. The employees may think that the union, with its united strength, will ensure fair wages at par with those of other workers in the

community, benefits such as medical facility, pensions, paid sick leave, vacations and holidays

for them.

Working Conditions: Employees like to work in a healthy and safe environment. Although there are statutory

provisions for providing employees a safe work environment employees still feel more secured knowing that trade union is directly involved in safety and health issues relating to them.

Fair and Just Supervision: The days are long gone when managers / leaders could rule employees with an iron fist. Thanks

to the trade unions that brought about a change or shift in leadership styles from autocratic to democratic, or say, people oriented to ensure that the managers treat their employees fairly,

justly, and respectfully. Employees can only be disciplined for “just cause.” In case of mistreatment from the employer, the employee may file a written grievance against the

employer.

The complaint will be heard and resolved through a formal grievance procedure involving collective discussion by both union and management representatives.

Powerlessness: Employees individually often feel voiceless or powerless to bring about changes that will benefit

them’. But, it is union that provides them a powerful, collective voice to communicate to management their dissatisfaction and frustration. This is based on labor philosophy ‘unity is the

strength”.

Need to Belong: Man is a social animal. Hence, need to belong is strong in both his personal and work lives. The

union, from this point of view, provides a mechanism for bringing people together not only to promote common job-related interests but also to organize programes, functions, and social events from time to time, to create a strong bond among the union members’.

Theories/Approaches of trade union

The five types of theories of trade union are as follows:

1. Revolutionary Theory

2. Evolutionary Theory

3. Theory of Industrial Jurisprudence

4. Rebellion Theory

5. The Gandhian Approach.

A cross-country examination of trade unions reveals different ideologies influencing the evolu-tion and development of trade unions depending on social, economic and political conditions prevalent therein. That is precisely the reason the objectives of trade unions and their place have been emphasized differently by different thinkers.

The various approaches/theories of trade unions can be classified into the following five

types:

1. Revolutionary Theory:

The revolutionary approach/theory of trade union is developed by Karl Marx “This theory is also

known as “the theory of class war and dialectical materialism”. According to Marx, trade union was the foremost organizing centre to provide locus for streamlining the forces of working

classes The trade unions are, for Marx, the instruments to overthrow capitalism.

These are, thus, prime instruments of the class struggle between proletarian workers and capitalist businessmen. Marx advocated that the working class must not divert itself from its

revolutionary programme because it is labor struggle only that can abolish capitalism. To Marx, workers’ emancipation involves abolition of capitalism

2. Evolutionary Theory:

This theory also known as “theory of industrial democracy” was enunciated by Sydney and Beatrice Webbs. To Webbs, trade unionism is an extension of the principle of democracy in the

industrial sphere. In other words, trade unionism is not an instrument to overthrow the capitalism, but a means of equalizing the bargaining power of labour and capital.

Trade unionism provides a means by which workers overcome managerial dictatorship, on the one hand, and express their voice in the determination of the conditions under which they have

to work, on the other.

3. Theory of Industrial Jurisprudence:

According to S. H. Slitcher the propounded of the “Theory of Industrial Jurisprudence”, workers individually fail in bargaining with employers for protecting their interests. In his view, trade unionism served as a means for workers to protect them in work. Such an approach of trade

unionism, Slitcher termed as “a system of industrial jurisprudence”.

4. Rebellion Theory:

To Frank Tannenbaum, the profounder of “Rebellion Theory”, trade unionism is a spontaneous

outcome in the growth of mechanization. He believes that the use of machines leads to exploitation of workers. Thus, machine is the cause and labor movement, i.e., trade unionism is the result. In other words, trade unionism is a rebellion approach against mechanization automization of industrial society to protect workers’ interest in the enterprise.

5. The Gandhian Approach:

The Gandhian approach of trade unionism is based on “class collaboration rather than class conflict and struggle”. The idea to take worker’s due share from capitalist by reform and self -

consciousness among workers led to the emergence of trade unionism. Thus the Gandhian approach of trade unionism is not only related to material aspect but also moral and

intellectual aspects.

Gandhi emphasized that the direct aim of a trade unionism is not, in the last degree political.

Instead, its direct aim is internal reform and also evolution of internal strength. Also, trade unionism, according to the Gandhian approach, is not anti-capitalistic as is generally viewed.

Weakness/Limitations of trade union

Labour movements played an important role during India's struggle for independence.

However, these trade union movements had some limitations, which may be described as

follows:

(i) Limited membership

Trade Unions were established in limited areas. They were concentrated only in industrial

areas, that too in the urban areas and in the organised sectors. They were unknown in rural and

undeveloped areas. Only three per cent of industrial workers were associated with the labour

organisations.

(ii) Small size of labour unions

Large organisations were required to put pressure on the British government, because the

latter had the potential to suppress even larger organisations. But, unfortunately, most of the

trade unions in India were small which made them unable to put any significant pressure on the

government. Further, these i organisations had restricted area of operation.

(iii) Small funds

The absence of big funds was the , greatest weakness of the trade unions during this period. ,

Members of the unions were poor. The poverty made them' unable to contribute significantly

to the funds of their

organisations.

(iv) Escapist attitude of the workers

The British rule had ruined almost all rural industries, which forced the villagers to migrate to

urban centres to make a livelihood. In urban centres, they did not stick to a particular job or

establishment. They would leave the job or place very

frequently in favour of a job or place which promised them better wage prospects. Such a

tendency of the labour weakened the trade union movement.

(v) Low wages

During freedom struggle, there were only a few industries in the country. The employers of

these few industries paid very low wages to the workers making their economic condition

miserable. The workers were unable to pay even the small membership fee for the trade

unions. Hence, they never joined any trade union.

(vi) Job through the contractors

During the freedom struggle, the workers would get job through contractors. It was so because

the migrated workers were not able to find work on their own. The job contractors used to be

the supporters of the factory owners. Hence, the workers employed through the contractors

were not able to participate in the labour movement.

(vii) Illiteracy

Majority of the workers were illiterate. They were not aware of their rights . They did ~ot even

know how much they should be paid for the wq,rk they did. The labour movement could hardly

be expected'io pick

Reasons for Political involvement

The Trade Union Act 1913 - a piece of pre-Independence legislation still on the Irish Statute

book - imposes a significant restriction on the application of trade union funds for certain political objects. The objects to which the Act applies are the expenditure of money

(i) On the payment of any expenses incurred either directly or indirectly by a candidate or

prospective candidate for election to the Oireachtas [the Irish Parliament] or to any public office, before, during, or after the election in connection with his or her candidate or election. (ii) On the holding or any meeting or the distribution of any literature or documents in support of any such candidate or prospective candidate

(iii) in the maintenance of any person who is a member of the Oireachtas or who holds a public office.

(iv) in connection with the registration of electors or the selection of a candidate for the Oireachtas or any public office.

(v) on the holding of political meetings or any kind, or on the distribution of political literature or political documents of any kind, unless the main purpose of the meetings or of the distribution of the literature or documents is the furtherance of the statutory objects within the

meaning of the Act. The statutory objects referred to include, in modern parlance, the

regulation of the relations between employees and employers.

Measures suggested making trade unions more

effective

Over the years, trade unions in India have been taken for a ride by outside, political leaders. In the process, the interests of workers and their aspirations have been totally neglected. The

Trade Unions Act, 1926, did not go for recognizing a representative union. As a result multiple unions have cropped up, often with blessings from management and outsiders. The union

finances have not been very sound in the beginning. The average membership figures for each union remain poor and have not improved. The forces of liberalization unleashed in early 90s

have strengthened the hands of employers in closing down unviable units. The new corporate ‘mantras’ productivity, performance, efficiency, survival of the fittest have virtually pushed

them to the wall-where their very survival looks uncertain. Let’s recount the factors responsible for their ever-increasing woes and depreciated status thus as below:

1. Trade Union leadership: The nature of leadership significantly influences the union-management relations as the leadership is the lynch-pin of the management of trade unions.

The leadership of most of the trade unions in India has been outside leadership mainly drawn from political parties.

Reasons for emergence of outside leadership: Outside leadership has been playing a pivotal

role in Indian Trade Union Movement due to the inability of insiders to lead their movement. In view of low education standards and poor command over English language which is still the

principal language of labor legislation and negotiations, low level of knowledge about labor

legislation, unsound financial position, fear of victimization by the employer and lack of leadership qualities-outside leaders have come to stay. The main reason for this trend is that

the Trade Unions Act, 1926,[India] itself provided the scope for outside leadership. The evil effects of outside leadership: The evil effects of outside leadership analyzed by

National Commission on Labour are as follows:

1. Outside leadership undermined the purposes of Trade Unions and weakened their authority. Personal benefits and prejudices sometimes weighed more than unions.

2. Outside leadership has been responsible for the slow growth of Trade Unions. 3. Internal leadership has not been developed fully. 4. Most of the leaders cannot understand the worker’ problems as they do not live the life

of a worker.

Even though outside leadership is permissible in the initial stages it is undesirable in the long run because of many evils associated with it. Political differences of leaders have been

inhibiting the formation of one union in one industry. Most of the Trade Union leaders fulfill their personal aspirations with their knowledge and experience gained in the Trade Unions.

Measures to minimise the evil effects of outside leadership: In view of the limitations of outside leadership, it is desirable to replace the outside leaders progressively by the internal leaders. The National Commission on Labour, 1969, also stated that outsiders in the Trade Unions should be made redundant by forces from within rather than by legal means. Both the management and trade unions should take steps in this direction. The steps may be:

Management should assure that the victimisation will be at zero level, even if the trade unions are led by insiders;

Extensive training facilities in the areas of leadership skills, management techniques and programmes should be provided to the workers;

Special leave should be sanctioned to the office bearers.

Union rivalry has been the result of the following factors:

1. The desire of political parties to have their basis among the industrial workers; 2. Person-cum-factional politics of the local union leader; 3. Domination of unions by outside leaders;

4. Attitude and policies of the management, i.e., divide and rule policy; and 5. The weak legal framework of trade unions.

Measures to minimise union rivalry: In view of the evil effects of inter-union rivalry and the problem of formation of one union in one industry, it may be necessary to consider the

recommendations of National Commission on Labour, 1969. The recommendations of NCL to minimise union rivalry are:

1. Elimination of party politics and outsiders through building up of internal leaders;

2. Promotion of collective bargaining through recognition of sole bargaining agents; 3. Improving the system of union recognition;

4. Encouraging union security; and 5. Empowering labour courts to settle inter-union disputes if they are not settled within the

organisation.

2. Multiple unions: Multiple unionism both at the plant and industry levels pose a serious threat to industrial peace and harmony in India. The situation of multiple unions is said to prevail when two or more unions in the same plant or industry try to assert rival claims over each other and function with overlapping jurisdiction. The multiple unions exist due to the existence of

craft unions, formations of two or more unions in the industry. Multiple unionism is not a phenomenon unique to India. It exists even in advance countries like UK and USA. Multiple

unionism affects the industrial relations system both positively and negatively. It is sometimes desirable for the healthy and democratic health of labour movement. It encourages a healthy

competition and acts as a check to the adoption of undemocratic practice, authoritative structure and autocratic leadership. However, the negative impacts of multiple unions

dominate the positive impacts. The nature of competition tends to convert itself into a sense of unfair competition resulting in inter-union rivalry. The rivalry destroys the feeling of mutual trust and cooperation among leadership. It is a major cause for weakening the Trade Union Movement in India. Multiple unionism also results in small size of the unions, poor finances, etc. 3. Union Rivalry: The formal basis for Trade Union Organisation is provided by the Indian Trade Union Act, 1926. The relevant article reads as follows: “Any seven or more members of a trade union may be subscribing their name to the roles of the trade union and by otherwise complying with the provisions of this act with respect to the registration, apply for registration

of the trade union under this Act.”

This provision has led to the formation of multiple unions and resulted in interunion rivalry in different industries. But the inter-union rivalry breaks the very purpose of the trade unions by weakening the strength of collective bargaining. On the other hand, the existence of a single, strong union not only protects the employee interests more effectively but also halts the various unproductive activities of the unions and forces the leaders to concentrate on the strategic issues. Further, it helps to bring about congenial industrial relations by bringing about a system of orderliness in dealing with the employees and by facilitating expeditious settlement of disputes.

The state of rivalry between two groups of the same union is said to be inter union rivalry. Inter and intra-union rivalries have been a potent cause of industrial disputes in the country. They

are responsible for weal bargaining power of trade unions in collective bargaining. These rivalries are responsible for slow growth of trade union movement in the country.

4. Finance: Sound financial position is an essential ingredient for the effective functioning of

trade unions, because in the process of rendering services or fulfilling their goals, trade unions have to perform a variety of functions and organise programmes which require enormous

financial commitments. Hence, it is imperative on the part of a trade union to strengthen its financial position.

But it is felt that the income and expenditure of trade unions in India over the years is such,

with few exceptions, that the financial position of the union is generally weak, affecting their functioning. It is opined that, “trade unions could be more effective, if they paid more attention to strengthening their organisations and achieving higher attention of financial solvency.” The primary source of income to the unions is membership subscription. Their other sources of union finances are donations, sale of periodicals, etc. The items of expenditure include: allowances to office bearers, salaries to office, annual convention/meeting expenses, rents, stationery, printing, postage, telegrams, etc.

Most of the trade unions in India suffer from inadequate funds. This unsound financial position is mostly due to low membership and low rate of membership fee. Trade Union Act, 1926,

prescribed the membership fee at 25 paise per member per month. But the National Commission on Labour recommended the increase of rate of membership subscription from 25 paise to Re. 1 in the year 1990. But the Government did not accept this recommendation. As the National Commission on Labour observes, “ an important factor limiting the effective functioning of unions in our country has been their financial weakness.. In most unions, poor finances are the result of inadequate membership strength. This in turn, can be traced to the small size of units. In a majority of unions, the rate of contributions required of members is also small. With a relatively low rte of unionisation, total funds collected are small. The general picture of finances of unions is disappointing.”

5. Low membership: The average membership figures of each union are quite depressing. In

1992-93 the average membership figure was 632, a steady fall from 3,594 per union from 1927-28. “Because of their small size, unions suffer from lack of adequate funds and find it difficult to

engage the services of experts to aid and advise members in times of need’. They can’t bargain with the employer effectively on their own. 6. Heterogeneous nature of labour: Since workers come to the factory with varying backgrounds, it is difficult for them to put a joint front in case of trouble. Employers exploit the

situation, under the circumstances, by dividing workers on the basis of race, religion, language, caste, etc.

7. Lack of Interest: For a large majority of workers, unionism even today remains a foreign

issue. In fact, workers avoid union activities out of sheer disinterestedness. Those who become part of the union, do not also participate in the union work enthusiastically. In such a scenario,

it is not surprising to find outside political leaders exploiting the situation serve their own

personal agenda.

8. Absence of paid office bearers: Weak finances do not permit unions to engage the services of

full time, paid office bearers. Union activists, who work on a part time basis, neither have the time nor the energy to take up union activities sincerely and diligently.

9. Other problems: The other factors responsible for the unsound functioning of trade unions in

India are:

1. Illiteracy:Workers in India fail to understand the implications of modern trade unionism. Their illiteracy coupled with ignorance and indifference account for the predominance of outside leadership.

2. Uneven growth: Trade unionism activities are, more or less, confined to major metros in India and traceable only in large scale units (especially cotton textile. The membership

fees should be raised as the amount of wages of the workers increased significantly, compared to the situation in 1926 when Trade Union Act provided for the collection of

25 paise per month per member as subscription fee. Even amended Rs.l/- is not sufficient. Some other source of finance may also explored to make trade union

financially healthy.

Bibliography

01. Lecture sheet

02. Book

03. www.ilo.org