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What Is a Company Union?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 09 October 2014
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Sometimes known as a yellow union, a company union is a group of employees associated with one company that have organized into a union. This localized business union has no affiliation with any type of national trade union, but operates strictly within one company. It is not unusual for a union of this type to be proposed and initially organized by the owner of the company. Depending on the model for the union, management may or may not participate in the function of the group of employees.

While a company union is related to a single company, that union may in fact have several branches. This would be the case if the business operates multiple facilities in different geographical areas. As with any type of union organization, the idea is to provide employees with a unified voice and vote when it comes to matters that have a direct impact on their livelihood and general economic well-being. For example, the members of a single business union may petition for an across the board hourly wage increase, or present a unified demand for improved working conditions within the facilities operated by the company.

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There are both proponents and detractors of the company union model. Those who advocate this approach to employee organization hold that a localized association is in a better position to address the specific issues facing employees within the company. In addition, the familiarity of the members with the management and officers of the company is likely to be higher than in other types of unions. Purportedly, this means that negotiations on matters that are important to both the employees and the company have a greater potential for compromise and mutually agreeable resolution.

Detractors of the company union generally point to the areas where the organization is likely to be weak. Since some unions of this type allow managers to hold membership, it may be difficult to come to a consensus on how to present a particular grievance or demand to the company for negotiation. In addition, the lack of an affiliation with a national trade union means that the stand alone group of employees have far less resources to call upon, in terms of access to legal counsel, or funds to support families during a strike. The familiarity within a company union that is seen as a strength by proponents is viewed as a weakness by detractors, since close and cordial relations between company officers and the employees lacks the objectivity that a national trade union brings to negotiations.

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