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Labor Union and Labor Law

March 4, 2020

Labor Union and Labor Law


Okay so, we’ve gone through the process of employment. Now, were going to dive into legal issues. It´s hard, but I’ll try to make it as simple as I can. Before studying the topic of labor union and labor law, I thought it’s going to be difficult and quite frankly that it´s a topic that is not related to me. I wasn’t interested in it enough to go ahead and read about it in my free time. But, I did. I found the subject to be closely related to almost everything I do and have done in my professional life. In this article we will go through legal environment, conflict´s, pitfalls, labor unions and different practices. The main goal of this article is to highlight the complexity of laws associated with HR. Hence, respectfully emphasizing the importance of it.



Legal environment


Nobody wants to get a lawsuit. Let it be the very minimum basis of interest for this article. However, familiarizing with the subject is also humane. Helping entrepreneurs and managers to realize their HR and legal departments limitations. Hence, avoiding liabilities. For example, HR department will take responsibility for applying good policies, documentation and monitoring firm´s decisions. Hence, supporting the corporation in conflict situations. Let’s take an example case. If an employee needs to be discharged, the manager can consult HR for a just cause to execute the discharge without a lawsuit. (Gomez-Meija, Balkin & Cardy 2016, 112.)


Understanding legal landscape of HR is complicated, because it’s a mix of laws, regulations and court decisions. The strategies for fair employment required by the law and regulations do not always go parallel. Hence, laws often have unintended consequences. Let’s take two strategies and demonstrate the point. First fair employment strategy which indicates that blind hiring should be applied, without discrimination based on race, sex, religion etc. Secondly, we have affirmative action strategy which indicates that certain minorities that where discriminated against in the past should be hired. Obviously these two strategies are against each other.  (Gomez-Meija, Balkin & Cardy 2016, 113 -114.)


Sound practices by employers can help to avoid many of the pitfalls associated with HR. Some of the practices are for example training, documentation, establishing a complaint resolution system, honesty and transparency in the organization. (Gomez-Meija, Balkin & Cardy 2016, 133-134.) At the end of the day the point is to be ethical and do the right thing.



Organized labor


As mentioned, let’s make it simple and assume that we don’t know what a union is. It´s basically bunch of people representing employee´s interests to management on issues like wages, work hours and conditions. Workers can participate in the union activities and receive services by paying a certain fee. Employees join unions for different reasons and of course depending on the country where you are working the laws need to be taken into consideration. Here I´ll lay out the common reasons to join a union: Dissatisfied with certain aspects of job, lack of influence to make a change, issues related to pay and benefits or/and any other problem that might occur in the future. (Gomez-Meija, Balkin & Cardy 2016, 493-494.)


Priorities of unions differ significantly by country, for example in U.S. the emphasis is on payment issues and in France on the other hand the emphasis is on political issues. In China unions impact is low both in political and economic issues. Swedish government is quite the opposite having higher involvement in both political and economic issues. These examples highlight the diversity of the definition of unions globally. (Gomez-Meija, Balkin & Cardy 2016, 500 – 502.)



Strategy and impact


Strategy for the organization to deal with union starts with deciding on whether the company wants to accept unions as a legitimate representative of their employees. Hence, accepting collective bargaining as an appropriate way for establishing rules in the workplace. This is called union acceptance strategy. Union avoidance strategy on the other side of the spectrum means that management takes steps to prevent its employees from joining a union by hardball or removing the incentive to unionize. Third type of strategy (Union substitution) is where management becomes responsive to employees, hence removing the incentive for unionization. (Gomez-Meija, Balkin & Cardy 2016, 504 – 506.)


After going through some of the definitions related to this topic, we can take a quick look at labor relations process. The process consists of three main steps: 1. union organizing, in which employees form a union. 2. collective bargaining, in which union and management negotiate a labor contract. And, 3. contract administration, in which labor contract is applied daily. A key feature here is the grievance procedure for settling employee disputes about contract interpretations. (Gomez-Meija, Balkin & Cardy 2016, 507 -517.)


The impact of unions on human recourse on company management decisions is significant. Union will affect staffing where decisions will be made based on seniority rather than merit. Training programs are emphasized, and unionized employees tend to receive larger compensation and benefit packages. Finally, unionized workplace is more structured. For example, an employee that is overlooked during a promotion can file a grievance and be reconsider for that promotion (Gomez-Meija, Balkin & Cardy 2016, 519 – 521.)



Unions in Finland


In Finland its voluntary to join a union. However, joining one will provide you with benefits that were also mentioned above. The right to join a union is protected by Finnish legislation and any restriction is a punishable offence. Most unions can be joined by filling in an application on their website.  The members usually pay a fee that is around 1-2% of their pay. And, as a member you can participate in trainings, ask for advice and support when needed. (info-Finland 2019.)


A large proportion of Finns are members of trade union, the estimation is around 75% and the International labor organization has ranked Finnish unions as among the most effective in the world. Finnish unions are occupation-based. (expat-Finland n.d.) Clearly Finland has a sophisticated labor movement that has an active involvement in the country. The purpose of unions in Finland are mainly to improve and protect right of its members, run unemployment funds and to provide earnings related benefits, help resolve disputes concerning the workplace and offer training. (Tehy n.d.)















Expat-Finland N.D. Trade Unions & Employee Representation in Finland. Trade Unions in Finland. URL: Accessed: 04.03.2020


Gomez – Meija L., Balkin D. & Cardy R. 2016. Managing human resources. Eight edition. Pearson.


info Finland 10 Jan 2019. Trade unions. General information about trade unions. Helsinki. URL: Accessed: 04.03.2020


Tehy N.D. Trade Unions in Finland. URL: Accessed: 04.03.2020


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