Unions as representative of workers organizations bargain with employers or various such issues such as wages, allowances, bonus, hours of work, reinstatement etc. The unions have secure bargaining power by statute and bargaining is done with the presence of the third party.
Trade unions and its impact: It has been quite a longtime the discussion is going on that trade unions affect productivity of workforce individually or collectively in positive or negative way. Dipp, Lupton and Aslop (2000, 2002) indicate a fall in the extent, which employers regard unions as damaging to industrial relations. Impact of trade unions on productivity and the economic performance of organizations have long been debated. The UK firms are primarily using the latest equipment, automation and technology, resulting in high labor productivity and the ability to produce quality products to meet the requirements of EU and US markets. Differences in technology, automation, age of equipment, levels of employment, all affect labor productivity. Most of the EU producers have increased their productivity in recent years by increased automation, improving technology, and downsizing, instigating "cultural change" programmes, and bringing in productivity-linked incentive pay schemes. British political climate hostile to the trade unions has considerably weakened trade unionism. The received wisdom is that unionization rates have fallen rapidly as unions have failed to become recognized in newly setup work places (Machins, 2000). Throughout the 1980's a range of anti union legislative measures were introduced by conservative govt. and the seemed to have a particularly adverse effect on recognition in establishments' setup after 1978 (Disney et. al. 1995). As Wood et al. (2003:119) point out the true importance of the legislation is that "it transforms any negotiations about recognition they (unions) may have with employers, since both sides know that the union can resort to the legal machinery." In the UK influence of the unions is relatively weak, partly due to the highly competitive nature of the industry and its largely unorganized female workforce and most importantly the functions of unions has been taken over by the employers themselves. According to Metcalf (Kesselar and BayLiss, 1992:203) Britain was bottom in the 1960's still bottom and performing relatively even worse in the 1970's, yet top by a mile in 1980's. The improved productivity performance of the manufacturing sector in the 1980s was attributable to the interaction of greater product market competition, high unemployment and anti-union legislation (Metcalf 1990; Crafts, 1993). Greater unionization is found to be associated with higher unemployment, in common with the results of many other studies (Nickell, 1998; Nickell et al. 2001; OECD 2002a, b). This is most likely reflects the fact that higher level of unionization can give rise to less competition in labour markets, and correspondingly