The Indian Journal of Labour Economics, Vol. 49, No. 4, 2006

EMERGING TRENDS IN THETRADE UNION MOVEMENT

Kuriakose Mamkoottam*

The labour market perspective of the “mass worker” with a standard model of fulltime employment, firm-specific job security and limited scope for occupationaladvancement can no longer dictate the central content of bargaining policy for tradeunions. To construct trade union programmes with which vertically and horizontallydifferentiated groups of workers can identify requires a sensitive redefinition of whatinterests are represented. Unions that largely thrived in the public sector domainneed to respond wholeheartedly to the new future that is to be found largely in thenon-governmental and unorganised sector. Trade unions must reinvent themselvesto sustain their organisation in the years ahead. Most important challenge for unionsin the 21st century will be to shift from the old strategy of confrontation and conflictto one of cooperation and collaboration.

I. INTRODUCTION

Trade union history is as old as industrial society. As industrial society changed over the years interms of technology, work organisation and human resources so have the structure and strategy ofunions undergone changes in the past several decades. However, developments during the recentpast have posed serious challenge to trade unions across the world, including emerging economieslike India. Not only has the density of trade unions declined sharply in recent years, but also therationale of trade unions is faced with threats of survival in the new economic environment. Severalfactors, including globalisation, technological changes, emergence of a global market, public andpolitical perceptions about unions, may have contributed to the emergence of the new scenario.

Trade unions traditionally performed different roles in their relations with individualemployers, employer associations, the state and the public at large. Unions directly or indirectlyplayed an economic role of facilitating production and distribution in society. Unions playedthis role largely by promoting cooperation between capital and labour in production and inenterprise restructuring, to secure sustainable growth consistent with social equity, employmentopportunities, improved living and working conditions. Unions also have argued for ensuringan equitable distribution of the value-added by the production process. Unions perform thedemocratic and representative role by providing an identity to labour at the workplace, and insociety at large. Trade unions play this all important role through several processes includingcollective bargaining, tripartite negotiations and social dialogue at all levels of the economy.Unions play this role also by voicing the views of the labour force on macro-economic policies,fiscal and monetary policies. Trade unions attempt to strengthen the solidarity among labour indifferent sectors and occupational groups by providing an anchor for broad-based socialmovements through alliances with other social actors with shared values and goals, and byextending services to members of unions. Trade unions are also expected to strive to achievesocial integration by minimising the risk of social exclusion or marginalisation of vulnerable orminority groups, including migrant workers and ethnic communities.

* Keynote Paper. The author is Professor, Faculty of Management Studies, University of Delhi.

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II. NEW TECHNOLOGY, CHANGING BUSINESS ENVIRONMENT ANDOCCUPATIONAL STRUCTURE

Technology, occupational structure and skills have direct, though complex, relationships betweenthemselves. High levels of technological change is increasingly associated with hybrid skillswhereby workers and managers come to possess less specialised training, but broader ranges oftaught capabilities to cope with the evolving technological challenges. Low levels oftechnological change may be found with low skill levels. By far the most serious concern is forsuitable skills and expertise to support the application of new technology. In general, IT posesa number of challenges for new and broader skills both to support it directly and to superviseand manage systems based around it. Skills in systems analysis and programming to developnew applications, skills in maintaining and testing microelectronics, skills in managing theincreased flow of information made available to organisations, and greater interpersonal andcommunication skills are some examples.

There is a shift from operating skills to those of design, programming, analysis and diagnosison the one hand and inter-personal relations and team performance on the other. This change inthe demand of skill sets, while reducing the number (of employees), has at the same timeincreased levels of skills within enterprises. This trend has already created acute shortages ofskilled people to support the demand of the new work place, as already manifested in manycountries. Most developed economies have been wanting in adequate supply of such new skills,which in turn, lead to outsourcing as a major trend in recent times.

As products are customised using flexible technology, the ways in which the machines areused affects the occupational profile of the workplace. Highly skilled operatives backed up bytrained technicians and engineers have already become more predominant in the new work place,resulting in reduced division of labour. Technological changes alter the occupational structurein favour of higher skilled upper strata. Fewer people will be employed in the organised sectorand these will be white-coat labour forces. A mushroom shaped organisation profile in which asmall number of managers direct a much larger number of engineers supported by a much smallernumber of technicians and a diminishing number of other ranks seem to be replacing thetraditional pyramidal structure. The rapid growth of the services sector supported by the ITESsector in most economies, including India, bear witness to this phenomenon.

Changes in skill mix are likely to occur in the work place in two ways. First, there will beemployees with distinctly new skills represented in the workplace, and second, because manyworkers will have several new skills mixed with their existing ones, there will be hybridisationof skills (Campbell and Warner, 1992). While higher degree of specialisation of functions wasassociated with industrialisation and technological change in the past, the reversal of the trendseems to happen with the application of microelectronics. The single disciplined craftsman hasno foreseeable future, and the shift is to a multi-skilled professional worker. Maintenancecraftsmen may need to have a wider mix of engineering and electrical skills as well as newelectronic technician skills (Mamkoottam and Herbozeimer, 1990).

New technologies affect the structure of employment and the skill requirement at work.Differentiating skills into three categories of (a) cognitive, (b) interactive, and (c) motor skills,Howell and Wolf (1991) noticed a decline in the growth of cognitive skills and a slight declinein the rate of growth of interactive skills from the 1960’s to 70’s for professional, technical andmanagerial staff. They also observe that cognitive skill levels of job grew faster for non-supervisory workers than for supervisory workers, and interactive skills grew substantially fasterin the supervisory category. The shift in the skill levels has been attributed to the introduction

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of new technologies, which resulted in a reduced need for jobs with low cognitive skillrequirements in the manufacturing sector. The same reason leads to a relatively rapid growth inthe average cognitive skill level for non-supervisory occupations, as teamwork, inter-functionalco-ordination and integration were required in the new work environment. With the rapid growthof IT and Internet based knowledge economy, the value of cognitive skill has already seen aquantum jump. Burton-Jones (1999) argues that knowledge is transforming the nature ofproduction and thus work, jobs, the firm, the market, and every aspect of economic activity. Allsuch changes are ushering in a new worker as well.

Evidence from process industries, banking and finance, food processing, electronics,engineering and services show trends towards greater integration of tasks and a need for “cross-trading” and demand for multi-skills. The new technology calls for a new worker, who possessesnot only higher technical knowledge but also better adaptability to new situations, an ability torespond quickly to technical problems as well as a capacity for teamwork. The traditional orderof physical strength and individual work ability are no more sufficient. The new technologycalls for a polyvalent and professional worker, who should understand not only the basic processof production but should also possess knowledge about the basic functioning of the machinesand their operation. As the new machines are flexible and versatile, so should the new employeebe so that he would be able to operate them efficiently. It is also important that the employeesshould be competent both conceptually and in technical matters; he should be open-minded,and should be willing to learn and co-operate with others to work effectively in teams. The newemployee, in a way, is expected to be a superman who will function in a versatile, flexible andmulti-functional position.

The new polyvalent worker performs larger number of tasks. He occupies positions embodyingbroader job descriptions within a reduced hierarchy of division of labour. In general, this is reflectedin the overall reduction in the number of employees required to perform a given set of operations.Such a reduction would be more prominent in the categories of unskilled and semi-skilled levelsas these are easily mechanised and replaced by machines. The traditional three-tier categories ofunskilled, semi-skilled and the skilled are being replaced by the less skilled and the highly skilledcategories. The unskilled category would be gradually reduced and eliminated and merged withthe less skilled group, while the skilled category would increase in size and importance. Changein the structure of the organisation would become much more accentuated, as there would be anincrease in the number of skilled workers in the organisation. In fact, the IT industry, which employspredominantly knowledge workers, is already experiencing the need for a new organisationalstructure -a virtual organisation! (Mamkoottam, 2003)

Major changes are taking place in the composition of work force particularly in terms ofgender, age and education across the world. Increasing number of women choose to enter thework force, especially in the developing countries, where relatively few women have beenabsorbed so far. Johnston (1991) has observed that the trend toward women leaving home-basedemployment and entering the paid work force is an often-overlooked demographic reality ofindustrialisation. As cooking and cleaning technologies ease the burden at home, agriculturaljobs diminish, and other jobs especially in the service sector proliferate, women would beabsorbed increasingly into the industrial sector. More than half of all women between the agesof 15 and 64 are now estimated to work outside the home; and women comprise nearly onethird of the world’s organised work force. Women in the Scandinavian countries are reported tohold more than 50 per cent of the jobs. A larger presence of women at the work place will haveimplications on the working conditions and terms of employment, while it may create demands

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for new services. Demands for services such as fast food, day care for children, home cleaners,and nursing homes are expected to increase as more and more women join the labour force.

III. TRADE UNIONS IN A CHANGING W ORLD

The above mentioned changes have had not only profound impact on the political and economicenvironment, but have also negatively influenced the position and role of trade unions. Thesechanges have eroded stable employment relationships, the traditional basis for union strength.They have also led to demands to deregulate labour markets, and to change the balance andcontent of industrial relations systems in many countries. Globalization has led to intensifiedcompetitive pressures in product markets, accelerated mobility of capital, and increasedsegmentation of labour markets. Technological changes make it possible to reshape productionthrough new forms of industrial organization, including sub-contracting and the spatialreorganization of production systems. Commitment towards trade unions may have weakenedowing to an increasingly differentiated labour force and the rising individualism in a highlycompetitive environment. Increased customer consciousness has led to dramatic changes in publicperceptions towards trade unions and its leadership, particularly when the unions oppose changeswhich may benefit the customer directly or indirectly.

The impact and/or role of unions may be assessed in terms of several factors. Union density,which is reflected in the membership figures of trade unions, can indicate the strength of tradeunions. Second, the capacity of the unions to mobilize or to deliver successful outcomes for labour,irrespective of its numerical strength, is a strong indicator of union’s impact. Third, it is an importantindicator of the role of trade unions to assess whether the results of union action have beeninstitutionalized through labour legislation, collective agreements, and union participation in theadministration of welfare benefits. In more ways than one, the strength and influence of tradeunions are often seen in the institutions governing labour relations, including legislation andcollective agreements, social security systems, and minimum wage systems. Such institutions oftenreflect union capacity to influence public opinion and mobilize action in support of the rights andinterests of their constituents. Fourth, adaptation to structures like Works Councils or such otherjoint decision making bodies within enterprises at the local, regional or global levels, and emergenceof structures to deal with labour issues arising at different levels are indicators of union impact.Finally, union response to management initiatives especially in the area of Human ResourcesDevelopment as alternative to unions will be reflection of its role and relevance.

Traditional demands, which centred largely on wages, working conditions, non-wagebenefits, employment and social security were met mainly through collective representation.However, in recent years, unions’ ability to influence any of these issues has been seriouslyeroded. Globalisation and market forces combined with severe competitiveness in terms ofquality, price and customer focus have dramatically reduced the role of unions. While employeesin the organised sector may have gained from healthy economic conditions in terms of wages,better working conditions and non-wage benefits, the case may not be the same regardingemployment generation and social security matters.

Liberalisation and privatisation which followed closely the process of globalisation havegradually reduced the role of public sector which was the main stay of trade unions in mostcountries. At the same time, technological innovations and organisational re-structuring led towhat is often referred as ‘job-less growth”. Political parties and governments are no more ableto support either protected economies or redundant manpower, and without support from politicalparties and governments organised unions could do precious little.

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As mentioned above, changing nature of technology and business environment facilitated byglobalisation and economic liberalisation have brought about substantial changes in labour marketand the profile of employees, particularly in terms of their age, education, competency levels,degrees of flexibility in terms of tenure and nature of employment. The new labour market andthe new (profile of) employees have created newer demands such as gender equality in employmentand access to jobs, up-gradation of skills/ training (career needs) health issues, recreation, legalassistance etc., which are also areas to which trade unions have paid little or no attention.

Trade unions are challenged by the need to maintain its existing constituency and mobilize(new) members in the changing context of the (new) labour force, especially the highly skilled(IT/ITES) workers of the services sector, women employees and contingent / part-timeemployees. Traditionally trade unions were shaped by the existence of a “normal” employmentrelationship, which involved a full time job with a specific employer and usually a degree oflong term stability. Part-time work, short-term and casual employment, agency work, self-employment, special government make-work schemes have increasingly become typical in recenttimes (Hyman, 1999, p. 2). Furthermore, changes in the structure of work and work organisationsoften result in challenges in working life as well (Watson et al., 2003).

The union response to the changing work environment and worker profile, especially therequirements of the knowledge workers and women in the labour market as a whole remainanything but satisfactory. Unions have largely confined themselves to traditional demands. Theirability to adapt to a changing environment by organizing new constituents, addressing newconcerns, developing new perspectives, and enhancing their image as major social actors areissues of great concern. Hyman (1999) makes an extremely important observation about thedwindling trade union membership in the traditional constituency, while there has been expansionat two extremes: those with professional or technical skills who may feel confident of theirindividual capacity to survive in the labour market; and those with no such resources but whosevery vulnerability makes effective collective organisation and action difficult to achieve orperhaps even to contemplate.

In recent years, the position of unions in traditional strongholds such as the public sectorand in labour-intensive (manufacturing) industries has been severely affected. Unions have beencalled upon to meet the pressing concerns of their traditional constituents, while anticipatingthose of their potential membership. Unions do not appear to have made much progress in relationto issues relating employment, conditions of work, training/career development, needs of theknowledge worker and those in the services sector.

The new entrants to labour markets include the highly skilled professional workers, whitecollar workers, and contingent workers. Union organizational strategies to address the concernsof workers at the higher end of the skill spectrum, in particular, the specific interests of knowledgeworkers have not proved successful so far. Measures addressed to the special concerns of women,including care for children and dependents, flexible working time arrangements, trainingfacilities, and representation of women in leadership positions of unions etc are also issues ofconcern. Strategies to address the concerns of contingent workers, including stability of job,access to training, benefits including health care and social security are also areas in whichunions have not made much progress. There is very little progress made to represent workers ofthe informal sector and those in rural areas, including home-based workers.

The new economic environment has necessitated the adaptation and reorganization of tradeunion structures and finances. Given limited human and financial resources, the trade unionswill have to evaluate trade-offs between organizing the new work force (including knowledge

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workers and women) and the provision of new services to the membership. Unions will have toadapt their organization to emerging global production chains and to new forms of industrialorganization which are often decentralised and globally networked at the same time. They willbe expected to devise modalities for networking among small and medium enterprises whichmay be spatially concentrated or dispersed. Moreover, unions have to choose between trendstowards centralization through union mergers at the sectoral, national, or international levels onthe one hand, and the demand to decentralise to respond to the regional and local structuresespecially at the enterprise level on the other hand.

In many countries there is a forceful trend towards decentralization, by which majority ofunion representatives prefer to engage in negotiation and enter into settlements at the local/enterprise level regarding basic pay and related issues. In the Czech Republic the figure is 70per cent, in Hungary, 65 per cent and in Slovakia, 60 per cent. Other components of pay, suchas productivity and shift and overtime, are even more decentralised and only holiday pay tendsto be regulated at higher levels. Neo-liberal governments and employers tolerate decentralisedbargaining as the most market-friendly and least state interventionist form of industrial relations.Decentralised enterprise unionism is further fractured by multi-unionism (Pollert, 1999).

The consolidation of product markets and labour markets at the regional level and even atinternational (global) level has created a need for unions to combine and function at levels beyondnational boundaries. While the unions have so far engaged themselves to promote and protectlabour standards within the region as a whole, they have to now begin to coordinate their actionson a broader scale going beyond national and regional levels and should be able to developcommon ground to coordinate their actions at the global level. Financial strength and viabilityare important concerns for all organisations and trade unions are no exception. The costs andbenefits of mergers, restructuring and provision of new services to members, are all issues whichmay demand strong financial wherewithal on the part of trade unions. Most unions in India, inparticular, are not known for their financial independence.

Unions may have to develop expertise to enter into multi-employer agreements onemployment, wages, working conditions, hours of work, and non-wage benefits of workers,and inter-sectoral coordination of collective bargaining. The unions may have to do much morein the areas of employment security, unemployment insurance, and special benefits on terminationof employment; and social security systems providing health care and pension schemes. Unioninvolvement in the design and administration of active labour market policies, and union abilityto influence economic and social policies through consultation and dialogue with employersand public authorities are likely to become key indicators of their appeal and relevance.

The public image of unions is a powerful force in determining attitude of workers in generalto trade unions and in the degree of influence unions have in social and political processes.Trade unions do not appear to have achieved much success to gain the confidence of womenand young workers, in particular, who constitute an important segment of the new work force.The styles and qualities of union leadership could play an important role in this regard.

IV. CHANGING PATTERNS OF EMPLOYMENT RELATIONS AND TRADE UNIONS

Thomas (1999) in his paper raises a number of issues which reflect on the role of the labourmovement in general and argues more specifically that unions need to play an active role in thedevelopment processes and broad transformation, particularly in the underdeveloped andemerging economies. Similarly, Hyman (1999) remarks that in many countries unions havecome to be perceived as conservative institutions whose concerns remain confined to defend

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the relative advantage of the elite among the workforce. Trade unionism, therefore, in the twenty-first century is confronted with the challenge to revive and re-define its role.

Trade unionism in recent years has undergone major changes and the unions, especiallythose in the organised (industrial sector) have experienced different kinds of stresses and strains.Trade unions had their strongholds among the unskilled/ semi-skilled workers in the large publicsector and traditional (manufacturing) private sector organisations. However, since the 1970s,strong (at times stronger than the blue-collar) trade unions and associations have been organisedby the white collar (including officers/managers) workers in the large public sector andgovernment organisations. In fact, in the recent years, unionism in India has become militantamong professionals such as University Teachers, Doctors, Nurses, and Lawyers etc. Whitecollar employees particularly in the banks, telecom and P&T etc. have demonstrated high levelsof bargaining power.

There is some evidence to suggest that unionism among the blue collar workers includingin the public sector has weakened since the 1980s. In fact, labour statistics indicate a markeddecline in the number of strikes in India in recent years. There is also hardly any evidence toshow that attempts are being made to organise the unorganised, home-based, part-time workers.Workers in general appear to be disenchanted by the traditional type of trade unions led fromoutside, often by political leaders driven by political objectives which have in many casesalienated the average worker from the trade union movement. Younger and more educated andcareer-oriented workers seem to be keen to support internal unions which focus on local/enterprise issues rather than national/ external issues. Instances that took place in Telco Pune,Maruti Gurgaon, etc. are examples of this trend. The gradual spread of market principles hasled to wide inter-regional and inter-sectoral differences in the levels of economic activity resultingin turn in considerable variation in the nature of labour management relations. Consequently,an erstwhile national IR system has given way to many “local” systems (Bhattacherjee, 2000).

Since 1991, employers and management (including the public/ government sector) in Indiahave taken several initiatives in terms of introducing professional management systems andpractices, particularly streamlining “Human Resource Management”. Performance/merit-basedrewards productivity-linked wages, team work etc. are becoming more and more popular. Managersare trained in people management skills, which in turn, have improved direct communication withthe workers, subordinate development programmes etc. Employers are concerned to build a workforce with close identity and greater commitment to the company and its goals.

However, the (national) trade union leadership has done precious little to address thechanging realities of the new work environment, except expressing helplessness in the losingunion membership. In fact, the anti-union sentiment is growing stronger among the public,particularly as the public is growing stronger in customer consciousness and consumer rights.The unions’ fight against the process of globalisation, introduction of technological change,etc, in the guise of job loss and unemployment have been often received little sympathy orsupport from the public at large. Such tactics have been viewed as reflection of an invert-lookingleadership that is often found to delay/ obstruct/ stop progressive change processes- be ittechnology, be it restructuring.

Union leadership is often criticised for pursuing limited goals (self-interest and politicallymotivated behaviour) even sacrificing the larger interests of the members. Moreover, the largersociety often perceives unions as institutions which only protect the unproductive work force,hence characterised as institutions with no social responsibilities. Unions are increasingly seenas mere pressure groups confined to narrow interests of small sections of the workers in the

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organised sector, while the millions in the unorganised sector remain neglected. There is littleevidence to suggest that trade unions are changing their agenda beyond wage bargaining.Technological up-gradation, retraining, skill up-gradation, professional growth etc. have not asyet become important issues for trade unions in India.

The globalised world in general and the post-1991. India in particular have experiencedimportant developments in terms of more liberalised economy, greater thrust on privatisation,introduction of new technologies, organisational changes, and above all, a new awareness aboutcompetitiveness, quality and service among the consumer. These changes and developmentshave in turn introduced new challenges for the employer and products/services. In an increasinglycompetitive environment, quality, productivity, and cost saving measures have become extremelyimportant for survival. In the new environment of a demanding, quality conscious consumer/market driven economy trade unions will need to re-examine their roles, responsibilities andstrategy.

There is an urgent need to understand and appreciate the crisis of confidence that is facingthe trade union movement today. Detailed investigations at local levels can certainly throwup important findings on the challenges and future of trade unions. Specific focus on theresponse of trade unions to globalisation, competitive and customer driven market realitywill throw valuable insight on the role and relevance of trade unions in the 21st century.

Findings in CEE indicate that union membership had halved during early capitalisttransformation; bearing in mind that this survey covered unionised enterprises, this mustunderestimate losses within the active labour force as a whole (Pollert, 1999). Those countrieswith lowest union affiliation, such as Poland, also showed the greatest growth. Open confrontationwas rare everywhere (6–7 per cent of cases in CEE), suggesting that few unions challengedmanagement, and endorsing the general view that unions do not oppose the restructuring process.Findings indicate a more deregulated working environment in terms of hours and contractualarrangements the Czech Republic and Hungary than elsewhere (in CEE). This reflects the greaterlegal employment deregulation in these countries and unions inability to challenge this withworkplace collective bargaining. Over half the enterprises covered by collective agreements inthe Czech Republic on job security, and improvements on the labour code in paid leave andshorter working hours, but 40 per cent also with agreements underscoring employment flexibility.Hungary appears to have poorer employment and social protection, and also greater agreedflexibility. Where national legislation has deregulated the working environment, fragmentedworkplace bargaining has insufficient strength to challenge it.

V. CONCLUSION

The labour market perspective of the “mass worker” with a standard model of full timeemployment, firm-specific job security and limited scope for occupational advancement can nolonger dictate the central content of bargaining policy for trade unions. To construct trade unionprogrammes with which vertically and horizontally differentiated groups of workers can identifyrequires a sensitive redefinition of what interests are represented (Hyman 1999). Unions thatlargely thrived in the public sector domain need to respond wholeheartedly to the new futurethat is to be found largely in the non-governmental and unorganised sector.

One of the critical strategies that unions may want to examine would be to strengthen linkageswith other sectors of society. Recognising the many NGOs and action groups, trade unionsmay think of taking on the role of a mature NGO to act as a bridge between employers andemployees. Trade unions in Philippines use the strategy of establishing cooperation with new

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players (Peoples’ Organisations) and NGOs to address workers’ issues and concerns, andtherefore remain as relevant institutions of the present times (Bighay, 2004).

Trade unions must reinvent themselves to sustain their organisation in the years ahead. Mostimportant challenge for unions in the 21st century will be to shift from the old strategy ofconfrontation and conflict and to one of cooperation and collaboration. Education and humanresource development activities which have been often cleverly used by the management couldbe used by unions as effective policy instruments to reduce the vulnerability of informal sectorworkers. Trade unions in India, for example, could play an important role to re-train and re-habilitate the large number of workforce who will be he required to be separated from the Indianpublic sector enterprises and state establishments. Through special programmes, institutionalbuilding with an emphasis on training and education COASATU in South Africa or CUT inBrazil are examples of trade unions that have succeeded in playing a role in development as awhole (Thomas, 1999).

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—— and Herbolzeimer, E. (1991), “Human Resource Implications of New technology: A Case Study of Automobilesin Spain”, Indian Journal of Industrial Relations, Vol. 26, No. 3.

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