Collective bargaining

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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. The collective agreements reached by these negotiations usually set out wage scales, working hours, training, health and safety, overtime, grievance mechanisms, and rights to participate in workplace or company affairs. [1]


The union may negotiate with a single employer (who is typically representing a company's shareholders) or may negotiate with a group of businesses, depending on the country, to reach an industry-wide agreement. A collective agreement functions as a labour 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, or, in some countries such as Austria, Sweden and the Netherlands, by an employers' organization) in respect of the terms and conditions of employment of employees, such as wages, hours of work, working conditions, grievance procedures, and about 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).


Beatrice Webb in 1894 BeatriceWebb.jpg
Beatrice Webb in 1894

The term "collective bargaining" was first used in 1891 by Beatrice Webb, a founder of the field of industrial relations in Britain. [2] It refers to the sort of collective negotiations and agreements that had existed since the rise of trade unions during the 18th century.

United States

In the United States, the National Labor Relations Act of 1935 made it illegal for any employer to deny union rights to an employee. The issue of unionizing government employees in a public-sector trade union was much more controversial until the 1950s. In 1962 President John F. Kennedy issued an executive order granting federal employees the right to unionize.

An issue of jurisdiction surfaced in National Labor Relations Board v. Catholic Bishop of Chicago (1979) when the Supreme Court held that the National Labor Relations Board (NLRB) could not assert jurisdiction over a church-operated school because such jurisdiction would violate the First Amendment establishment of freedom of religion and the separation of church of state. [3]

International protection

...where free unions and collective bargaining are forbidden, freedom is lost. [4]

Ronald Reagan, Labor Day Speech at Liberty State Park, 1980

The right to collectively bargain is recognized through international human rights conventions. Article 23 of the Universal Declaration of Human Rights identifies the ability to organize trade unions as a fundamental human right. [5] Item 2(a) of the International Labour Organization's Declaration on Fundamental Principles and Rights at Work defines the "freedom of association and the effective recognition of the right to collective bargaining" as an essential right of workers. [6] The Freedom of Association and Protection of the Right to Organise Convention, 1948 (C087) and several other conventions specifically protect collective bargaining through the creation of international labour standards that discourage countries from violating workers' rights to associate and collectively bargain. [7]

In June 2007 the Supreme Court of Canada extensively reviewed the rationale for regarding collective bargaining as a human right. In the case of Facilities Subsector Bargaining Association v. British Columbia, the Court made the following observations:

The right to bargain collectively with an employer enhances the human dignity, liberty and autonomy of workers by giving them the opportunity to influence the establishment of workplace rules and thereby gain some control over a major aspect of their lives, namely their work… Collective bargaining is not simply an instrument for pursuing external ends…rather [it] is intrinsically valuable as an experience in self-government… Collective bargaining permits workers to achieve a form of workplace democracy and to ensure the rule of law in the workplace. Workers gain a voice to influence the establishment of rules that control a major aspect of their lives. [8]

Empirical findings


In Sweden the coverage of collective agreements is very high despite the absence of legal mechanisms to extend agreements to whole industries. In 2018, 83% of all private sector employees were covered by collective agreements, 100% of public sector employees and in all 90% (referring to the whole labor market). [13] This reflects the dominance of self-regulation (regulation by the labour market parties themselves) over state regulation in Swedish industrial relations. [14]

United States

In the United States, the National Labor Relations Act (1935) 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 or to retaliate against them for engaging in organizing campaigns or other "concerted activities", to 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. [15] Unions are also able to secure safe work conditions and equitable pay for their labor.

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. Once the workers' committee and management have agreed on a contract, it is then put to a vote of 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 then renegotiated between employees and management. Sometimes there are disputes over the union contract; this particularly occurs in cases of workers fired without just cause in a union workplace. These then go to arbitration, which is similar to an informal court hearing; a neutral arbitrator then rules whether the termination or other contract breach is extant, and if it is, orders that it be corrected.

In 24 U.S. states, [16] employees who are working in a unionized shop may be required to contribute towards the cost of representation (such as at disciplinary hearings) if their fellow employees have negotiated a union security clause in their contract with management. Dues are generally 1–2% of pay. However, union members and other workers covered by collective agreements get, on average, a 5-10% wage markup over their nonunionized (or uncovered) counterparts. [9] Some states, especially in the south-central and south-eastern regions of the U.S., have outlawed union security clauses; this can cause controversy, as it allows some net beneficiaries of the union contract to avoid paying their portion of the costs of contract negotiation. Regardless of state, the Supreme Court has held that the Act prevents a person's union dues from being used without consent to fund political causes that may be opposed to the individual's personal politics. Instead, in states where union security clauses are permitted, such dissenters may elect to pay only the proportion of dues which go directly toward representation of workers. [17]

The American Federation of Labor was formed in 1886, providing unprecedented bargaining powers for a variety of workers. [18] The Railway Labor Act (1926) required employers to bargain collectively with unions.

In 1931, the Supreme Court, in the case of Texas & N.O.R. Co. v. Brotherhood of Railway Clerks, upheld the act's prohibition of employer interference in the selection of bargaining representatives. [18] In 1962, President Kennedy signed an executive order giving public-employee unions the right to collectively bargain with federal government agencies. [18]

The Office of Labor-Management Standards, part of the United States Department of Labor, is required to collect all collective bargaining agreements covering 1,000 or more workers, excluding those involving railroads and airlines. [19] They provide public access to these collections through their website.


Only one in three OECD employees have wages which were agreed on through collective bargaining. The Organization for Economic Co-operation and Development, with its 36 members, has become an outspoken proponent for collective bargaining as a way to ensure that the falling unemployment also leads to higher wages. [20]

See also


  1. "BLS Information". Glossary. U.S. Bureau of Labor Statistics Division of Information Services. February 28, 2008. Retrieved 2009-05-05.
  2. Adrian Wilkinson et al. eds. (2014). Handbook of Research on Employee Voice. Edward Elgar Publishing. p. 227. ISBN   9780857939272.CS1 maint: extra text: authors list (link)
  3. Pynes, J.E. & Lombardi (2011) Human Resources Management for Healthcare Organizations. San Francisco, CA: Jossey-Bass
  4. "Labor Day Speech at Liberty State Park, Jersey City, New Jersey". Archived from the original on 2015-03-08.
  5. United Nations General Assembly (1948). "Article 23". Universal Declaration of Human Rights . Paris. Retrieved August 29, 2007.
  6. International Labour Organization (1998). Declaration on Fundamental Principles and Rights at Work . 86th Session: Geneva. Retrieved August 29, 2007.
  7. "C087 - Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87)". International Labour Organization. Retrieved 24 October 2013.
  8. Health Services and Support – Facilities Subsector Bargaining Assn. v. British Columbia [2007] SCC 27 Archived July 12, 2007, at the Wayback Machine .
  9. 1 2 3 4 Toke Aidt and Zafiris Tzannatos (2002). "Unions and Collective Bargaining".
  10. Tangian, Andranik (2009). Towards computer-aided collective bargaining: Enhancing the trade unions position under flexicurity. WSI-Diskussionspapier. 165. Düsseldorf: Hans Böckler Stiftung. Retrieved 31 January 2021.
  11. Tangian, Andranik (2011). "Chapter 9: Flexicurity in collective agreements". Flexicurity and Political Philosophy. New York: Nova. pp. 113–126. ISBN   978-1-61122-816-8.
  12. Tangian, Andranik (2019). Composite indicators for computer-aided collective bargaining (PDF). ECON Working Papers. 133. Karlsruhe: Karlsruhe Institute of Technology. Retrieved 31 January 2021.
  13. Anders Kjellberg (2020) 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 2020:1, Appendix 3 (in English) Table F
  14. 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. 357-383 357-383ning. Lund: Juristförlaget i Lund 2017, pp. 357-383
  15. "Can I be required to be a union member or pay dues to a union?". National Right To Work. Retrieved 2011-08-27.
  16. "National Right to Work Foundation » Right to Work States".
  17. "Communications Workers of America v. Beck" . Retrieved 2011-08-27., 487 U.S. 735.
  18. 1 2 3 Illinois Labor History Society. A Curriculum of United States Labor History for Teachers Archived 2008-05-14 at the Wayback Machine . Online at the Illinois Labor History Society Archived 2007-09-27 at the Wayback Machine . Retrieved on August 29, 2007.
  19. "Collective Bargaining Agreements File: Online Listings of Private and Public Sector Agreements". Office of Labor-Management Standards (OLMS). Retrieved 1 May 2015.
  20. lars. "OECD: The crisis is over, but collective bargaining is needed for wage growth — Nordic Labour Journal".

Related Research Articles

A trade union, often simply called a union, is an organization of workers who have come together to achieve many common goals, such as protecting the integrity of their trade, improving safety standards, and attaining better wages, benefits, and working conditions through the increased bargaining power wielded by solidarity among workers. Trade unions typically fund the formal organization, head office, and legal team functions of the trade union through regular fees or union dues. The delegate staff of the trade union representation in the workforce are made up of workplace volunteers who are appointed by members in democratic elections.

Labour law mediates the relationship between workers, employing entities, trade unions and the government. Collective labour law relates to the tripartite relationship between employee, employer and union. Individual labour law concerns employees' rights at work also through the contract for work. Employment standards are social norms for the minimum socially acceptable conditions under which employees or contractors are allowed to work. Government agencies enforce labour law.

National Labor Relations Act of 1935

The National Labor Relations Act of 1935 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.

Strike action 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. In most countries, strike actions were quickly made illegal, as factory owners had far more power than workers. Most Western countries partially legalized striking in the late 19th or early 20th centuries.

In the context of U.S. labor politics, "right-to-work laws" refers to state laws that prohibit union security agreements between employers and labor unions. Under these laws, employees in unionized workplaces are banned from negotiating contracts which require employees who are not union members to contribute to the costs of union representation.

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.

United States labor law The rights of working people in the USA to fair wages, limits on working time, voice at work, equal treatment, and job security.

United States labor law sets the rights and duties for employees, labor unions, and employers 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 28 states, and discourages working weeks over 40 hours through time-and-a-half overtime pay. There is no federal law requiring paid holidays or paid family leave, and limited state laws. 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.

An open shop is a place of employment at which one is not required to join or financially support a union as a condition of hiring or continued employment.

The duty of fair representation is incumbent upon U.S. labor unions that are the exclusive bargaining representative of workers in a particular group. It is the obligation to represent all employees fairly, in good faith, and without discrimination. Originally recognized by the United States Supreme Court in a series of cases in the mid-1940s involving racial discrimination by railway workers' unions covered by the Railway Labor Act, the duty of fair representation also applies to workers covered by the National Labor Relations Act and, depending on the terms of the statute, to public sector workers covered by state and local laws regulating labor relations.

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." Historically, in some workplaces, some workers refused to pay dues to the union even after benefiting from wage and benefit improvements negotiated by the union representatives, resulting in friction and violence as they were seen as 'free-loaders;' at the same time, absence of a peaceful grievance settlement mechanism created industrial instability as union members often walked off the job. The compromise was designed to ensure that no employee will opt out of the union simply to avoid dues yet reap the benefits of collective bargaining, such as higher wages or health insurance. Supreme Court of Canada Justice Ivan Rand, the eponym of this law, introduced this formula in 1946 as an arbitration decision ending the Ford Strike of 1945 in Windsor, Ontario. The Canada Labour Code and the labour relations laws of a majority of provinces contain provisions requiring the Rand formula when certain conditions are met. In those provinces where the labour relations laws do not make the Rand formula mandatory, the automatic check-off of union dues may become part of the collective bargaining agreement if both parties agree. If there are religious objections to paying dues the dues may be donated to a mutually agreed upon charity.

Compulsory Check-Off

Union dues to be deducted

70. (1) Where a trade union that is the bargaining agent for employees in a bargaining unit so requests, there shall be included in the collective agreement between the trade union and the employer of the employees a provision requiring the employer to deduct from the wages of each employee in the unit affected by the collective agreement, whether or not the employee is a member of the union, the amount of the regular union dues and to remit the amount to the trade union forthwith.

Religious objections

(2) Where the Board is satisfied that an employee, because of their religious conviction or beliefs, objects to joining a trade union or to paying regular union dues to a trade union, the Board may order that the provision in a collective agreement requiring, as a condition of employment, membership in a trade union or requiring the payment of regular union dues to a trade union does not apply to that employee so long as an amount equal to the amount of the regular union dues is paid by the employee, either directly or by way of deduction from their wages, to a registered charity mutually agreed on by the employee and the trade union.

Designation by Board

(3) Where an employee and the trade union are unable to agree on a registered charity for the purposes of subsection (2), the Board may designate any such charity as the charity to which payment should be made.

Mexican labor law governs the process by which workers in Mexico may organize labor unions, engage in collective bargaining, and strike. Current labor law reflects the historic interrelation between the state and the Confederation of Mexican Workers, the labor confederation officially aligned with the Institutional Revolutionary Party, which ruled Mexico under various names for more than seventy years.

Canadian labour law

Canadian labour law is that body of law which regulates the rights, restrictions, and obligations of trade unions, workers, and employers in Canada.

Labor relations

Labor relations is a field of study that can have different meanings depending on the context in which it is used. In an international context, it is a subfield of labor history that studies the human relations with regard to work – in its broadest sense – and how this connects to questions of social inequality. It explicitly encompasses unregulated, historical, and non-Western forms of labor. Here, labor relations define "for or with whom one works and under what rules. These rules determine the type of work, type and amount of remuneration, working hours, degrees of physical and psychological strain, as well as the degree of freedom and autonomy associated with the work."

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 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.

NLRB v. Mackay Radio & Telegraph Co., 304 U.S. 333 (1938), is a US labor law case of the US Supreme Court which held that workers who strike remain employees for the purposes of the National Labor Relations Act (NLRA). The Court granted the relief sought by the National Labor Relations Board, which sought to have the workers reinstated by the employer. However, the decision is much better known today for its obiter dicta in which the Court said that an employer may hire strikebreakers and is not bound to discharge any of them if or when the strike ends.

South African labour law regulates the relationship between employers, employees and trade unions in the Republic of South Africa.

A master contract or master agreement is a collective bargaining agreement which covers all unionized worksites in an industry, market or company, and which establishes the terms and conditions of employment common to all workers in the industry, market or company.

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.

Saskatchewan Federation of Labour v Saskatchewan [2015] 1 SCR 245 is a Canadian labour law case on the right to strike.