In this paper, we analyse the effect of unionisation in the labour market on the growth rate of the economy in the presence of 'Efficiency Wage Hypothesis'. We use both 'Efficient Bargaining' model and 'Right to Manage' model to solve the negotiation problem. Unionisation raises the negotiated wage rate as well as the effort (efficiency) level of the worker. In the case of 'Efficient Bargaining' model, unionisation in the labour market in general lowers the number of workers if the labour union is not highly employment oriented. However, irrespective of labour union's orientation, it raises the effort (efficiency) level per worker. As a result, if the labour union is not highly wage oriented, effective employment measured in efficiency unit is increased ; and this leads to a rise in the growth rate of the economy. However, in the 'Right to Manage' model of bargaining, unionisation in the labour market raises worker's effort level but lowers the number of workers irrespective of the orientation of the labour union ; and raises effective employment and balanced growth rate if the exogenously given income tax rate is lower than a critical value.