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A labor union, (also called a labor organization or trade union), is a legal entity comprised of employees or workers having a common interest (such as all the assembly workers for one employer, or all the trades workers in a particular industry) who form a union for the purpose of collectively negotiating with an employer (or employers) over wages, hours and other terms and conditions of employment. Many people feel that it is only fair to allow workers to pool their resources in a special legal entity in exactly the same way that capitalists pool their resources in the form of corporations.

Companies that employ workers with a union generally operate on one of several models:

• In the closed shop, a business may only hire workers who already belong to the union.
• In the union shop, a business may hire anyone, but workers must join the union within a designated amount of time after they start work.
• In the agency shop, workers may choose to not join the union, but must pay a fee to the union for its services in negotiating their contract.
• In the open shop, a business may employ anyone it likes, regardless of their union status, and workers are not required to associate with a union at all.

The concept of labor unions began early in the industrial revolution. More and more people left farming as an occupation and began to work for employers, usually in appalling conditions and for very low wages. The labor movement arose as an outgrowth of the disparity between the power of employers and the powerlessness of individual employees.

The legal status of trade unions in the United Kingdom was established by a Royal Commission, which agreed that the establishment of the organisations was to the advantage of both employers and employees. Most British unions are members of the TUC, the Trades Union Congress.

Labor unions were illegal for many years in most countries. There were severe penalties for attempting to organize labor unions, up to and including execution. Despite this, labor unions were formed and began to acquire political power, eventually resulting in a body of labor law which not only legalized organizing efforts, but codified the relationship between employers and those employees organized into labor unions.

Some countries such as Sweden have strong, centralized unions, where every type of work has a specific union, which are then gathered in large national unions. The largest Swedish union is LO, Landsorganisationen. LO has over 2.1 million members, which is more than a fifth of Sweden's population.

Most labor unions in the United States are members of the AFL-CIO, or the American Federation of Labor-Congress of Industrial Organizations. The Taft-Hartley Act, passed in 1947 over the veto of President Harry Truman, severely limits the powers of unions in the United States, and remains in effect. Closed shops are forbidden; union shops are allowed only if a majority of employees approve. Jurisdictional strikes (where two unions dispute which may represent a given group of workers) and secondary boycotts (boycotts against an already organized company that does business with another company where a union is attempting to organize) were made illegal. Unions are no longer allowed to donate money to political campaigns, and union leaders are required to affirm that they are not supporters of the Communist Party.

Most importantly, the bill provided the executive branch of the Federal government with the ability to obtain legal strikebreaking injunctions if an actual or impending strike "imperiled the national health or safety", a test that has been in practice interpreted loosely by the courts.

American labor unions:

• make a list here

British trade unions:

• Rail Maritime and Transport Union

See also Salting, Labor organization, Labor law