Trade Unions and their Role in a Steel Plant


Trade Unions and their Role in a Steel Plant

Trade unions are independent, membership-based establishments of the employees that represent and negotiate on their behalf. They function in the organization with their presence registered with the management. They give advice when their members have problems at work, represent members in discussions with the management, and help improve wages and working conditions through negotiations.  Trade unions also make sure that the statutory requirements are met. Other functions carried out by trade unions are to arrange education and learning opportunities for the employees, promote equal opportunities at work, fight against discrimination and help to ensure a healthy and safe working environment. Many unions also provide services for their members, such as welfare benefits, personal legal help and financial services.

Trade unions function on the principle that if all the employees speak with the same voice, their concerns are more likely to be addressed. This involves union members in the same workplace getting together to talk about common problems, democratically taking collective decisions on workplace issues, and putting these views to the management.

It can be very difficult for employees to speak individually to the management about workplace problems and to resolve their difficulty individually even assuming that they have the confidence to raise the issue. Individual members usually elect someone to speak on their behalf (a shop representative) and to discuss their concerns with management, whereas the trade unions normally have regular formal discussions. These negotiations are referred to as ‘collective bargaining’.

Trade unions are financed through the individual contributions of their members. They continually seek to recruit members (encouraging new members to join by ‘organizing’) and to build an active membership, as this give unions stronger bargaining power in negotiations with the management.

Trade unions are important institutions in a steel plant organization and they play a vital role in providing proper working environment and congenial and harmonious industrial relations in the steel plant. The key role played by the trade unions in encouraging increased production, maintaining discipline and acting as agents of social welfare is well acknowledged both by the management and the employees of the steel plant. Trade unions work together with the employees and the management for a common purpose in a cooperative spirit avoiding conflicting situations. With a lot of technological developments taking place in recent years and with more competition which the steel plant has to face in present day scenario, trade unions have changed their approach and they have become now more innovative and creative. They have reoriented themselves towards employees’ based systems which focus on the employee’s motivation, empowerment, disciplined working and larger participation in the decision making processes.

In olden days, trades unions were being considered as trouble makers in the perception of some of the members of the management and hence they tried to keep the unions at an arm’s length generally adapting divide and rule policy. Management used to be shy in sharing information with them as well as to keep them away from the decision making process. Soon this perception changed and trade unions were considered to be institutions which are working for the interest of the employees with respect to compensation, benefits, welfare and their training and development.  But today this perception has undergone a further change. In the present day scenario, management realizes that the trade unions are effective partners for the achievements of the goals and objectives of the organization. They are considered to be a vital link between management and the employees. They are considered to be highly responsible bodies for the growth and progress of the organization. Hence large amounts of information are shared with them and their suggestions are not only welcome by the management but also are considered as vital inputs for taking decisions. Since the suggestions coming through trade represent employees’ opinion, they are seriously taken into considerations while developing policies for the organization. On other side trade unions also have changed their approach and are coming forward to provide very positive and valuable suggestion to the management for the growth and the progress of the organization. Today trade unions also consider themselves as one of the wheels of the vehicle which takes the organization forward.

In a steel plant organization where multiple of trade unions are functioning, and the entire work force loyalty gets divided into various unions, a democratic process is normally adopted at regular interval, to determine the trade union which enjoys the support of the majority employees. This trade union is given recognition by the management for the period till the next exercise of determining the majority union is repeated. Recognizing the majority trade union also means that there is a single point of contact for negotiating terms and conditions for the employees’ issues, which is simpler, more efficient for the management and fairer than dealing with many unions or the employees individually. Employees’ performance also improves where there is an independent means of dealing with the issues rather than leaving the issues unattended until they get worse.

Though officially it is the recognized union which discusses the employees’ issues with the management for finding amicable solutions, management do not ignore other major unions and do also take their opinions also into considerations while finding solutions for the employees’ issues.

Management in the present day scenario do understand that working with the trade unions bring many benefits to the organization. In particular, trade unions play an important role and help the management on the following issues.

  • Build trust among the employees – Trade unions provide a mechanism for formal dialogue between employees and management, which helps build trust and commitment among the employees. Employees get assured that their problems can be identified and resolved quickly and fairly. This brings significant productivity benefits for the steel plant since a peaceful and motivating working environment exist in the shop floor for the employees to give their best.
  • Ensure safety of the workplace – Trade unions help in improving the work environment of the employees. This helps in turn to lower the accident rates at work by ensuring safe and healthy working practices and also to reduce the stress-related ill health caused by, for example, working long hours or working in poor quality environments. Evidence shows that workplaces where unions have taken active interest are safer workplaces. This provides added benefit for the management in significantly reducing the costs of ill health and accidents.
  • Audit non-compliance with statutory requirements – Trade unions are a good source of information on workplace practices, and are well placed to work with the management to identify and address poor working practices, working conditions and non-compliance with statutory requirements. Trade unions play a key role in getting the regulatory requirements enforced. They act as auditors and project to the management the deficiencies of the work place with respect to regulatory requirements. Trade unions are placed in better position to get information through their member employees the workplace conditions. In this way trade unions help management in monitoring and improving the work environment. Employees working in the safe and healthy work environment perform better, give higher output and help in enhancing the productivity of the steel plant.
  • Improve staff retention – Trade unions negotiate on the behalf of the employees with the management to find solutions that meet organizational needs, while simultaneously ensuring that employees are treated fairly. By giving employees a voice and supporting them when they are unhappy at work, trade unions significantly improve staff retention and reduce absenteeism. Improved working conditions in workplaces also give employees a powerful incentive to carry out their jobs more efficiently, and to use their time at work more productively.
  • Improving shop floor performance – Trade unions act as a bridge between management and the employees. When they are explained about the intricacy of the productivity and cost data then through them management makes employees mind work towards improvement in the productivity and reduction in the production costs. These days enlightened management shares with the trade unions and through them with the employees the details of productivity measures and costing so as to get positive contribution of the employees towards cost reduction and productivity enhancement.
  • Helps making better decisions – A particular trade union represents the employees in a particular plant, while their counterparts represent employees in another steel plant. A good coordination between the two provides trade unions with a broad perspective on many work place issues as well as industry knowledge. This enhanced knowledge helps in taking better informed decisions which in turn helps both the employees as well as the management in improving the performance of the steel plant. Now a days many times management sponsor tours of union members to those steel plants which are performing better. Such visits change the outlook of the union members on several issues and this aids in the decision making process with respect to shop floor improvements regarding working environment, technology upgradation and productivity enhancements.
  • Promote equality – Trade unions actively fight discrimination and help to promote equal opportunities at work. Representatives of trade union are well placed to identify incidences of discrimination, and to take up with the management to ensure that anti-discrimination policies are properly implemented. This helps to make workplaces more attractive to the employees. It improves staff retention, absenteeism and productivity of the employees and saves management time spent on addressing the employees’ grievances.
  • Provide access to learning and skills – Trade unions take up the cause of employees’ training and education with the management. They ensure with the management that the skills of the employees get continuously upgraded and their knowledge get enhanced to suit the requirements of technology up-gradations in the steel plant. Well trained and educated employees become assets to the organization since they bring productivity benefits for the organization.  Such employees are better placed to make the work environment safer as well as hazard and stress free. This also helps the organization to have highly motivated and satisfied employees.
  • Cost reduction – Surveillance of the trade unions helps in the early identification of problems in the workplace and in turn helps in taking timely corrective actions. Trade unions have a strong record of working with management to identify deficiencies in the equipment and processes. Timely action by the management to remove these deficiencies helps in substantial cost savings for the organization. Further trade unions encourage employees to bring up to the management a large number of suggestions for improvement in the performance. Many of such suggestions are highly useful and when implemented by the management, bring cost and productivity benefits to the organization.
  • Increase productivity – Trade unions help build high-trust workplaces where employees are healthier, better skilled and more able to resolve grievances – all of which lead to a more committed and productive workforce. During the periods of technology upgradation there are possibilities of employees’ resistance which can be due to several reasons. Collective bargaining with trade unions at such occasions, provide an important means of consulting with employees over change and reduces the chances of such resistance. Ultimately a modernized plant utilizing latest technology brings productivity benefits to the organization and this productivity benefits are achieved only through cooperation and support of the trade unions.
  • Collective bargaining – There are several occasions during the functioning of the organization where there is a necessity of serious dialogue between the management and the employees. Such occasions may arise during the time of enhancement of wages, revision in the production incentives, increase of employees strength due to plant expansion, and special onetime welfare activities needed in case of a disaster etc. On such occasion it is not possible for the management to discuss these issues with all the employees. Hence such discussions take place through the employees’ representatives. These discussions are known as collective bargaining. Trade unions play a very important and responsible role in collective bargaining and projects and protects the interest of employees during such collective bargaining.

The above roles of trade unions are shown in Fig 1.

Role of trade unions

Fig 1 Roles of trade unions

Trade unions are essential institution in a steel plant organization since it forms a vital link between the employees and the management. The responsibilities of trade unions are quite large and they are ably discharging them in the steel plant environment. They are committed to the efficient working of the steel plant since they are aware that their existence is due to the efficient functioning of the steel plant. Some people in the management sometimes think that unions adopt agitational methods for making management to accept their demands. This is true in some cases but behind these agitations also lies unions desire to see that the employees get a fair treatment from the management and there is an amicable settlement between employees and management to have a cordial working environment at the work place. Even during agitation trade unions do not think ill of the organization. Trade unions also work for the growth and prosperity of the organization, only difference between them and management is that they see all the issues through the eyes of the employees and not through the eyes of the management. Hence more and better is the communication between trade unions and the management on the issues vital for the organization, more amicable will be union management relations and then both work as a team for achieving the objectives and goals of the organization.