The Benefits of a Collective Bargaining Agreement

Standardized Legal Documents The Benefits of a Collective Bargaining Agreement

What Is a Collective Bargaining Agreement?

Are you a member of any union? Workers in various companies form unions, so if you did not join one until now, maybe this is the right time for you. The union members should sign various contracts or other legal documents, but they can surely benefit from a collective bargaining agreement. If you want to know more about it, we’re here to help.

Why Would I Need a Collective Bargaining Agreement? 

A Collective Bargaining Agreement is a legal contract that helps the workers negotiate the terms of employment with the employers. The union acts as the chief negotiator representing the workers. The terms that the union and the employers discuss are:

  • Salary
  • Working hours
  • Workplace rules
  • Overtime pay
  • Holidays
  • Sick leave
  • Safety policies
  • Vacation time
  • Retirement benefits
  • Health care benefits

To be sure that your labor rights are fully respected, getting a collective bargaining agreement is the right thing to do.

How Do Negotiations on a Collective Bargaining Agreement Begin?

The employer or the union representatives should give the notice of bargaining a new deal at least 90 days before the current agreement expires. They can do so at any other time if it is stated explicitly in the agreement. The meeting should take place within 15 days of the announcement, or at some other point if both parties agree.

What Are the Benefits of a Collective Bargaining Agreement? Are There Any Drawbacks?

Workers can benefit from collective bargaining agreements since their working conditions will improve, and the dispute-resolution mechanisms between the employers and employees are usually clearly stated in such contracts. One disadvantage can be the negotiation period because it takes a long time to close the deal.

Employers can benefit as well since these mechanisms help reduce the need for strikes. In the event of a strike, the employers can rely on the union to resolve the issue since they have a mutually binding agreement. There is a chance that the gap between the employers and employees becomes wider with these agreements, which is a potential drawback.

We have summarized the pros and cons of a collective bargaining agreement in the table below.

  • Represents each employee in the workforce
  • Encourages economic growth
  • Gives workers a louder voice
  • Improvers the workers’ life quality 
  • Creates a binding outcome
  • Provides security and stability
  • Encourages cooperation
  • Personal differences are neglected
  • Every worker is bound by the agreement
  • Widens the gap between the employees and the employer
  • Takes a long time to finalize
  • Prone to inequality

Types of Collective Bargaining

Collective bargaining is the process of negotiating between the union representatives and the employers. There are different types of collective bargaining resulting in collective bargaining agreements:

  1. Distributive 
  2. Integrative 
  3. Productivity 
  4. Composite 
  5. Concessionary

Distributive Bargaining

Anything related to the transfer of money is considered distributive bargaining. In this type of bargaining, one side benefits, and the other doesn’t. It involves the redistributions of income in the form of higher wages, bonuses, or financial benefits. The union should have enough power to win the negotiation, and the best way to do so is to have 100 % of the workforce on board.

Integrative Bargaining

Both the union and the employers benefit from this type of bargaining. They bring a list of demands and reach an agreement. As a result, both parties lose or gain something in this process. For example, if the staff is supposed to get better training, this may cost the employers more, but they will benefit from higher productivity. In a similar way, the union may agree not to take yearly bonuses but manage to increase the annual salary.

Productivity Bargaining

In this type of bargaining, the two parties try to agree on specific changes that would increase productivity and the wages or some other benefits. The union may suggest higher salaries, whereas the employers can insist on target-oriented bonuses.

Composite Bargaining

Composite bargaining deals with the job aspects not related to the payment, such as:

  • Employee welfare 
  • Job security
  • Recruitment
  • Disciplinary processes
  • Working conditions

The idea is to create a long-term relationship beneficial for both employers and employees.

Concessionary Bargaining

The union gives back previous benefits to the employer. One example is the union’s will to lower the wages in return for job security. This is of great importance during an economic decline when job security takes precedence over pay. The key point is to strengthen the business and ensure the company survives alongside the employees.

Is a Collective Bargaining Agreement Legally Binding?

Yes, it is. As soon as the union and the employers sign the agreement, it applies automatically, and both parties have to abide by that agreement. A collective bargaining agreement can also contain a clause clearly stating the procedure if a party wants to complain and provide mechanisms for resolving disputes. 

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