Collective agreement

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A collective agreement, collective labour agreement (CLA) or collective bargaining agreement (CBA) is a written contract negotiated through collective bargaining for employees by one or more trade unions with the management of a company (or with an employers' association) that regulates the terms and conditions of employees at work. This includes regulating the wages, benefits, and duties of the employees and the duties and responsibilities of the employer or employers and often includes rules for a dispute resolution process.

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Finland

In Finland, collective labour agreements are universally valid. This means that a collective agreement in an economic sector becomes a universally applicable legal minimum for any individual's employment contract, whether or not they are a union member. For this condition to apply, half of the workforce in that sector needs to be union members, thus supporting the agreement.

Workers are not forced to join a union in a specific workplace. Nevertheless, with 70% average unionization, most economic sectors are under a collective labour agreement. An agreement does not prohibit higher wages and better benefits, but establishes a legal minimum, similarly to a minimum wage. Furthermore, a national income policy agreement is often, but not always reached, which includes all trade unions, employers’ associations, and the Finnish government. [1]

Germany

Collective agreements in Germany are legally binding. Germans pride themselves in a supposedly more cooperative spirit in industrial relations when compared to other countries, for example when contrasted to the historically more adversarial nature of industrial relations in the United Kingdom as described below. German workers by law have a right to representation on company boards. [2] Together, management and workers are considered "social partners". [3]

Italy

Like in Finland, collective labour agreement determinate a universal applicabile legal minimum wage, which is universally valid (in Latin: erga omnes), whether the worker is a member of a trade union or not.

In 1959, Vigorelli-type laws transferred the national collective labor agreements in force at the time into an ordinary law in such a way as to make the set of economic and regulatory rights established in these agreements universal and binding. [4]

For the first time in the history of Italian industrial relations, in December 2010, Marchionne decided to unilaterally let the Fiat group out of Confindustria and Federmeccanica. the Fiat group decided to start separate negotiations with some trade union organizations to define a specific company contract for the automotive sector in force within its plants, as an exception to and in lieu of the national collective labor contract. [5]

In 2013 the Italian banking association (ABI) was the first association to decide to cancel the national collective labor agreement of the banking sector and to adopt a separate negotiation with the trade union organizations. [6] In the subsequent contractual renewals of 2018 and 2022, the trade unions and bank's associations agreed on the right of withdrawal from the national collective labor agreement for both parties. [7]

Both employers'associations and trade unions of wage worker|wage workers of the public and private sectors have the right to unilaterally withdraw from the contract.

Sweden

In Sweden about 90 per cent of all employees are covered by collective agreements, in the private sector 83 per cent (2017). [8] [9] Collective agreements usually contain provisions concerning minimum wages. Sweden does not have statutory regulation of minimum wages or legislation on extension of collective agreements to unorganized employers. Non-organized employers can sign substitute agreements directly with trade unions, but many do not. The Swedish model of self-regulation applies only to workplaces and employees covered by collective agreements. [10]

United Kingdom

At common law, Ford v A.U.E.F. [1969], [11] the courts once held that collective agreements were not binding. Then, the Industrial Relations Act 1971, introduced by Robert Carr (Employment Minister in Edward Heath's cabinet), provided that collective agreements were binding unless a written contract clause declared otherwise. After the demise of the Heath government, the law was reversed to reflect the tradition in British industrial relations policy of legal abstentionism from workplace disputes.

The law is now contained in the Trade Union and Labour Relations (Consolidation) Act 1992 s.179, whereby In the United Kingdom, collective agreements are conclusively deemed to be not legally binding. This presumption may be rebutted when the agreement is in writing and contains an explicit provision asserting that it should be legally enforceable.

Although the collective agreement itself is not enforceable, many of the terms negotiated will relate to pay, conditions, holidays, pensions and so on. These terms will be incorporated into an employee's contract of employment (whether or not the employee is a union member); and the contract of employment is, of course, enforceable. If the new terms are unacceptable to any individuals, they can object to his employer; but if the majority of workers have acquiesced, the company will be able to sack the complainants, normally with impunity.

The British law reflects the historic adversarial nature of UK industrial relations. Also, there is a background fear by employees that if their trade union sued for breach of a collective agreement, the union could become bankrupt, leaving employees without representation in collective bargaining. This unfortunate situation may be slowly changing, partly through EU influences. Japanese and Chinese firms that have UK factories (particularly in the motor industry) try to imbue their workers with the company ethic.[ clarification needed ] This approach has been adopted by indigenous UK firms such as Tesco.

United States

In the United States collective bargaining agreements are recognised. [12] [13] [14]

See also

Related Research Articles

A trade union or labor union, often simply referred to as a union, is an organisation of workers whose purpose is to maintain or improve the conditions of their employment, such as attaining better wages and benefits, improving working conditions, improving safety standards, establishing complaint procedures, developing rules governing status of employees and protecting and increasing the bargaining power of workers.

Labour laws, labour code or employment laws are those that mediate the relationship between workers, employing entities, trade unions, and the government. Collective labour law relates to the tripartite relationship between employee, employer, and union.

<span class="mw-page-title-main">National Labor Relations Act of 1935</span> 1935 U.S. federal labor law regulating the rights of workers and unions

The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, and take collective action such as strikes. Central to the act was a ban on company unions. The act was written by Senator Robert F. Wagner, passed by the 74th United States Congress, and signed into law by President Franklin D. Roosevelt.

<span class="mw-page-title-main">Strike action</span> Work stoppage caused by the mass refusal of employees to work

Strike action, also called labor strike, labour strike, or simply strike, is a work stoppage caused by the mass refusal of employees to work. A strike usually takes place in response to employee grievances. Strikes became common during the Industrial Revolution, when mass labor became important in factories and mines. As striking became a more common practice, governments were often pushed to act. When government intervention occurred, it was rarely neutral or amicable. Early strikes were often deemed unlawful conspiracies or anti-competitive cartel action and many were subject to massive legal repression by state police, federal military power, and federal courts. Many Western nations legalized striking under certain conditions in the late 19th and early 20th centuries.

Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The interests of the employees are commonly presented by representatives of a trade union to which the employees belong. A collective agreement reached by these negotiations functions as a labour contract between an employer and one or more unions, and typically establishes terms regarding wage scales, working hours, training, health and safety, overtime, grievance mechanisms, and rights to participate in workplace or company affairs. Such agreements can also include 'productivity bargaining' in which workers agree to changes to working practices in return for higher pay or greater job security.

Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any other entity, pays the other, the employee, in return for carrying out assigned work. Employees work in return for wages, which can be paid on the basis of an hourly rate, by piecework or an annual salary, depending on the type of work an employee does, the prevailing conditions of the sector and the bargaining power between the parties. Employees in some sectors may receive gratuities, bonus payments or stock options. In some types of employment, employees may receive benefits in addition to payment. Benefits may include health insurance, housing, disability insurance. Employment is typically governed by employment laws, organisation or legal contracts.

<span class="mw-page-title-main">United Kingdom labour law</span> Labour rights in the UK

United Kingdom labour law regulates the relations between workers, employers and trade unions. People at work in the UK can rely upon a minimum set of employment rights, which are found in Acts of Parliament, Regulations, common law and equity. This includes the right to a minimum wage of £10.42 for over-23-year-olds from April 2023 under the National Minimum Wage Act 1998. The Working Time Regulations 1998 give the right to 28 days paid holidays, breaks from work, and attempt to limit long working hours. The Employment Rights Act 1996 gives the right to leave for child care, and the right to request flexible working patterns. The Pensions Act 2008 gives the right to be automatically enrolled in a basic occupational pension, whose funds must be protected according to the Pensions Act 1995.

Featherbedding is the practice of hiring more workers than are needed to perform a given job, or to adopt work procedures which appear pointless, complex and time-consuming merely to employ additional workers. The term "make-work" is sometimes used as a synonym for featherbedding.

In labor law, a union shop, also known as a post-entry closed shop, is a form of a union security clause. Under this, the employer agrees to either only hire labor union members or to require that any new employees who are not already union members become members within a certain amount of time. Use of the union shop varies widely from nation to nation, depending on the level of protection given trade unions in general.

A union security agreement is a contractual agreement, usually part of a union collective bargaining agreement, in which an employer and a trade or labor union agree on the extent to which the union may compel employees to join the union, and/or whether the employer will collect dues, fees, and assessments on behalf of the union.

<span class="mw-page-title-main">United States labor law</span> US laws on fair pay and conditions, unions, democracy, equality and security at work

The rights and duties for employees, labor unions, and employers are set by labor law in the United States. Labor law's basic aim is to remedy the "inequality of bargaining power" between employees and employers, especially employers "organized in the corporate or other forms of ownership association". Over the 20th century, federal law created minimum social and economic rights, and encouraged state laws to go beyond the minimum to favor employees. The Fair Labor Standards Act of 1938 requires a federal minimum wage, currently $7.25 but higher in 29 states and D.C., and discourages working weeks over 40 hours through time-and-a-half overtime pay. There are no federal laws, and few state laws, requiring paid holidays or paid family leave. The Family and Medical Leave Act of 1993 creates a limited right to 12 weeks of unpaid leave in larger employers. There is no automatic right to an occupational pension beyond federally guaranteed Social Security, but the Employee Retirement Income Security Act of 1974 requires standards of prudent management and good governance if employers agree to provide pensions, health plans or other benefits. The Occupational Safety and Health Act of 1970 requires employees have a safe system of work.

Labor rights or workers' rights are both legal rights and human rights relating to labor relations between workers and employers. These rights are codified in national and international labor and employment law. In general, these rights influence working conditions in the relations of employment. One of the most prominent is the right to freedom of association, otherwise known as the right to organize. Workers organized in trade unions exercise the right to collective bargaining to improve working conditions.

Enterprise bargaining is an Australian term for a form of collective bargaining, in which wages and working conditions are negotiated at the level of the individual organisations, as distinct from sectoral collective bargaining across whole industries. Once established, they are legally binding on employers and employees that are covered by the Enterprise bargaining agreement. An Enterprise Agreement (EA) consists of a collective industrial agreement between either an employer and a trade union acting on behalf of employees or an employer and employees acting for themselves.

In Canadian labour law, the Rand formula is a workplace compromise arising from jurisprudence struck between organized labour and employers that guarantees employers industrial stability by requiring all workers affected by a collective agreement to pay dues to the union by mandatory deduction in exchange for the union agreement to "work now, grieve later."

<span class="mw-page-title-main">Labor relations</span> Study of work and workers

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<span class="mw-page-title-main">Fair Work Act 2009</span> Australian industrial relations law

The Fair Work Act 2009(Cth) is an Act of the Parliament of Australia, passed by the Rudd government to reform the industrial relations system of Australia. It replaced the Howard government's WorkChoices legislation, it established Fair Work Australia, later renamed the Fair Work Commission.

Israeli labor law provides a number of protections to workers in Israel. They are governed by the Basic Laws, the Hours of Work and Rest Law, as well as various other laws, statutes, and regulations.

Collective agreement coverage or union representation refers to the proportion of people in a country population whose terms and conditions at work are made by collective bargaining, between an employer and a trade union, rather than by individual contracts. This is invariably higher than the union membership rate, because collective agreements almost always protect non-members in a unionised workplace. This means that, rather than individuals who have weaker bargaining power representing themselves in negotiations, people organise to represent each other together when negotiating for better pay and conditions in their workplace. The number of people who are covered by collective agreements is higher than the number of union members, and in many cases substantially higher, because when trade unions make collective agreements they aim to cover everyone at work, even those who have not necessarily joined for membership.

The union density or union membership rate conveys the number of trade union members who are employees as a percentage of the total number of employees in a given industry or country. This is normally lower than collective agreement coverage rate, which refers to all people whose terms of work are collectively negotiated. Trade unions bargain with employers to improve pay, conditions, and decision-making in workplaces; higher rates of union density within an industry or country will generally indicate higher levels of trade union bargaining power, lower rates of density will indicate less bargaining power.

References

  1. ↑ "Enterprise Finland". Archived from the original on 2013-02-13. Retrieved 2016-04-11.
  2. ↑ "Collective Agreement Act celebrates its 50th anniversary - Eurofound".
  3. ↑ Cleverway. "Collective Bargaining / Germany / Countries / National Industrial Relations / Home - WORKER PARTICIPATION.eu". www.worker-participation.eu. Archived from the original on 2021-11-18. Retrieved 2014-01-12.
  4. ↑ "La necessaria riforma del diritto del lavoro" (in Italian).
  5. ↑ Pietro Inchino. "L'uscita della FIAT da Confindustria e la questione cruciale del contratto collettivo nazionale" (in Italian).
  6. ↑ "Bancari, Abi towards the cancellation of the contract. Unions convened on 16 September" (in Italian). Il Sole 24 Ore. February 11, 2013.
  7. ↑ "Banche, accordo ABI-sindacati su disdetta CCNL" (in Italian).
  8. ↑ Anders Kjellberg (2019) Kollektivavtalens täckningsgrad samt organisationsgraden hos arbetsgivarförbund och fackförbund, Department of Sociology, Lund University. Studies in Social Policy, Industrial Relations, Working Life and Mobility. Research Reports 2019:1, Appendix 3 (in English) Tables F-G
  9. ↑ Anders Kjellberg (2019) "Sweden: collective bargaining under the industry norm" Archived 2019-07-25 at the Wayback Machine , in Torsten Müller & Kurt Vandaele & Jeremy Waddington (eds.) Collective bargaining in Europe: towards an endgame, European Trade Union Institute (ETUI) Brussels 2019. Vol. III (pp. 583-604)
  10. ↑ Anders Kjellberg (2017) ”Self-regulation versus State Regulation in Swedish Industrial Relations” In Mia Rönnmar and Jenny Julén Votinius (eds.) Festskrift till Ann Numhauser-Henning. Lund: Juristförlaget i Lund 2017, pp. 357-383
  11. ↑ Ford v A.U.E.F. [1969] 2 QB 303
  12. ↑ LII Staff (6 August 2007). "Collective Bargaining". LII / Legal Information Institute.
  13. ↑ "U.S. Department of Labor - Office of Labor-Management Standards (OLMS) - Collective Bargaining Agreements File: Online Listings of Private and Public Sector Agreements". www.dol.gov.
  14. ↑ "Collective Bargaining Agreements - U.S. Department of Labor - Collective Bargaining Agreements - Cornell University ILR School". digitalcommons.ilr.cornell.edu.
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