Management: "7.2: Collective Bargaining"

Collective Bargaining

Collective bargaining is negotiation between unions and employers to come to an agreement on the conditions of employment.

Learning Objective: Outline the conditions and negotiation process between groups of employees (unions) and employers in the human resource frame.

Key Points

  • Collective bargaining is used to win terms of pay, benefits, and hours beneficial to employees.
  • The negotiations result in a collective agreement, which must be approved by the employees. If it is, the agreement becomes the union contract.
  • Workers' ability to collectively bargain is established by the National Labor Relations Act of 1953.


  • Arbitration: A process in which two or more parties use an adjudicator in order to resolve a dispute.

In collective bargaining, the process of negotiation between employees and employers, employees attempt to achieve employment conditions that serve their shared interests. Employees are commonly represented by the union to which they belong. The collective agreements reached by these negotiations attempt to establish:

    • Wages,
    • Working hours,
    • Training,
    • Health and safety,
    • Overtime,
    • Grievance mechanisms, and
    • Rights to participate in workplace or company affairs.

Process of Negotiation

  1. At a workplace where a majority of workers have voted for union representation, a committee of employees and union representatives negotiate a contract with the management regarding wages, hours, benefits, and other terms and conditions of employment, such as protection from termination of employment without just cause. Individual negotiation is prohibited.
  2. Once the workers' committee and management have agreed on a contract, it is then voted on by all workers at the workplace. If approved, the contract is usually in force for a fixed term of years, and when that term is up, it is renegotiated between employees and management.
  3. Sometimes there are disputes over the union contract; this often occurs in cases of workers being fired without just cause in a union workplace. These disputes then go to arbitration, which is similar to an informal court hearing. A neutral arbitrator makes a ruling as to whether the termination was unjust and whether other contract breaches occurred. If so, the arbitrator will order that the breach be corrected or remedied in some way.

Collective Agreement

The union may negotiate a specific agreement with a single employer, or it may negotiate with a group of businesses to reach an industry-wide agreement. A collective agreement functions as a labor contract between an employer and one or more unions. Collective bargaining consists of the process of negotiation between representatives of a union and employers (generally represented by management) in respect to the terms and conditions of employment, such as wages, hours of work, working conditions, grievance procedures, and the rights and responsibilities of trade unions. The parties often refer to the result of the negotiation as a collective bargaining agreement (CBA) or as a collective employment agreement (CEA).

Legislation Regulating Collective Bargaining

In the United States, the National Labor Relations Act of 1953 covers most collective agreements in the private sector. This act makes it illegal for employers to discriminate, spy on, harass, or terminate the employment of workers because of their union membership. It also makes it illegal for employers to retaliate against employees who engage in organizing campaigns or form company unions or to refuse to engage in collective bargaining with the union that represents their employees. It is also illegal to require any employee to join a union as a condition of employment. Unions are also exempt from antitrust law, in the hope that members may collectively fix a higher price for their labor.

Last modified: Monday, October 14, 2019, 12:00 PM