What is a Collective Bargaining Agreement?

As the name implies, collective bargaining involves negotiating (bargaining) on behalf of a group (collectively). In other words, it’s negotiating for changes for a group—in this case—employees of an organization or industry. The term “collective bargaining” usually refers to the negotiations that ensue between a union (representing the employees) and the representatives of the employer (or employers). What is the usual topic of negotiation? Changes in working conditions.

A “collective bargaining agreement,” by extension, is the agreement reached at the conclusion of these negotiations. It is considered to be legally binding when agreed upon by both parties.

A collective bargaining agreement might include provisions related to:

• Wages
• Overtime
• Pay scales
• Working hours
• Training provided
• Benefits provided, including things like health insurance or retirement savings plans
• Vacation and holidays
• Disciplinary procedures (possibly including provisions for termination)
• Safety policies
• Processes for promotions, seniority designations, work assignments, transfers, etc.
• Other relevant working condition negotiations
• How to resolve future issues or disputes (employee grievances)
• Rights and responsibilities of all affected groups (employees, employers, unions, etc.)

At the end of the day, a collective bargaining agreement is a form of employment contract that governs actions between the employer and unionized employees. It may also be called a labor agreement or union contract. It typically is valid for a specified time frame (such as one year), after which it must be renegotiated. It’s important to note that while it may contain provisions related to discipline and termination, it’s not a guarantee of employment unless there is a specific guarantee negotiated within the terms.

Collective Bargaining Right Stems from NLRA

 The right of employees to form a union and to initiate collective bargaining comes from the National Labor Relations Act (NLRA). The NLRA promotes the right to collective bargaining to allow employees a measure of control over the working environment. The National Labor Relations Board has a lot of resources explaining the history of the NLRA and the conclusions they found that led up to its enactment. They confirm:

“It is declared to be the policy of the United States to eliminate the causes of certain substantial obstructions to the free flow of commerce and to mitigate and eliminate these obstructions when they have occurred by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection.”[i]

The NLRA not only protects and promotes employee rights to collective bargaining. It also makes it illegal for employers to discourage such activity or to retaliate against anyone participating in such activity. In short, it protects the right to form unions and bargain for better working conditions. It’s a form of employee protection.

What has been your experience with collective bargaining agreements? Have you been an employer representative in the collective bargaining process?

*This article does not constitute legal advice. Always consult legal counsel with specific questions.

[i] https://www.nlrb.gov/resources/national-labor-relations-act

About Bridget Miller:

Bridget Miller is a business consultant with a specialized MBA in International Economics and Management, which provides a unique perspective on business challenges. She’s been working in the corporate world for over 15 years, with experience across multiple diverse departments including HR, sales, marketing, IT, commercial development, and training.