What is a Labor Union?

Definition: A labor union is an organization of workers whose main purpose is dealing with matters of mutual interests in front of employers. Mainly wages, benefits and working conditions. Labor unions have an active participation in negotiations with employers with the aim of improving workers’ rights.

What Does Labor Union Mean?

Labor unions are assumed to help employees, particularly less skilled workers, to obtain or maintain benefits through collective action since one single worker is presumed to be too weak to bargain with an employer on his own. Many unions are industry-specific and therefore represent all employees of that industry, no matter the company or location. Members pay a fee to support the union’s administrative expenses and its representatives act on behalf of all workers.

Agreements between the employer and the union are commonly written in a document signed by the two parties that is valid only for a specific period time, for example, two years. After that time, a new bargaining process is started and therefore a new document will be signed.


In a small country located in the Eastern Europe the fashion industry is rapidly emerging. There are five large firms and several medium and small companies that manufacture clothes for several markets. A labor union holding more than 500 members represents workers when bargaining new collective agreements. This year, the labor union’s representatives identified that most workers were women with children.

These mothers often faced strong difficulties trying to find affordable day care services during working hours. This situation caused stress to these female workers and even absences that affected productivity. The union decided to push a new benefit in the next collective contract. It will ask for an additional monthly benefit that helps mothers with day care payments. If is accepted by the employer, this added benefit would be included in the next agreement to be signed.