I think, at least traditionally, unions have tended to reward seniority over merit because seniority is something that can be tracked with relative objectivity, while merit is something a bit slippery to nail down.
Of course the business owner has strong opinions on what constitutes employee merit. To the business owner, the merit of an employee is largely a proxy for whatever is profitable for the business. That's fine for the business, but if the union uses that same metric as merit, they'd become little more than a proxy for the intention of the business owners. For a union to be merit-based rather than seniority-based, they'd need to find a measure of merit that was in the interest of the workers, not the business.
The job of the union is to take the business interests and then keeping that as a constraint, maximizing labor's share of income.
This usually directly means having the right people in the right places, to do an effective job, so there's not much time wasted. (Which is their time.) And so on.
Unions shouldn't try to keep everyone on board, they should simply counteract shareholder pressure to keep labor costs down.
Of course, the union should help members to retrain and then should help those members to find their place where they can contribute value.
Of course, the union can and should represent the political values of its members.
Of course the business owner has strong opinions on what constitutes employee merit. To the business owner, the merit of an employee is largely a proxy for whatever is profitable for the business. That's fine for the business, but if the union uses that same metric as merit, they'd become little more than a proxy for the intention of the business owners. For a union to be merit-based rather than seniority-based, they'd need to find a measure of merit that was in the interest of the workers, not the business.