What is a Collective Bargaining Agreement?

By hrlineup | 17.12.2019

In businesses, there is often a challenge reaching agreements between employers and employees. Many times, it feels like there is a lack of balance, particularly when it comes to power and demands. Employers seem to have all the power, while employees appear to be making all the demands. Agreements that are born out of desperation or frustration often are not carried through adequately, leading to unhappiness within the organisation.

To resolve these types of scenarios, the collective bargaining agreement came to life. The employee collective agreement is a written agreement that spells out what has been agreed by both the employers and employees. It is a legal contract that covers a certain period of time and can be enforced if need be. The employees typically must get together as a union to approach the employers when negotiating for this agreement.

Components of the Collective Bargaining Agreement

Like any legal document, this agreement is divided into several sections, with each section outlining clauses that apply to both parties. For the HR Manager, this agreement is a literal guide on how the people within the organisation need to be managed. Here are some of the main components of a collective bargaining agreement: –

  1. Working hours and wages – The most essential part of any employment agreement. This part defines the wages that employees are able to earn based on their positions, and the number of hours worked. It also outlines overtime and how time off can be allocated.
  2. Grievance and dispute resolution – In the event an employee believes that they are being treated unfairly, or there are discrepancies with pay, this agreement spells out the best course of action to be taken for a resolution to be attained.
  3. Work Scope – To prevent overwork or being given responsibilities that are outside one’s job description, this agreement explores work scope in detail, including all the details and job descriptions of all employees.

How Collective Bargaining Works

At the surface, it may appear as though the agreement is skewed more towards employee demands than giving employers the power, they need to manage their organisations. This is not the case because collective bargaining works in two main ways: –

  1. The process results in the creation of a mandatory agreement for employers and employees, which nullifies individual agreements that may offer different terms to employees of the same grade. Amongst these terms are disciplinary terms, allowing the employer to demote or terminate employees as part of disciplinary action.
  2. It prevents employees from taking certain industrial actions like going on strike, or staging lock outs. This offers the employer some protection, as the employees are obligated to maintain peace in the event that there is any dispute.

Collective bargaining agreements are essential, especially for large companies that may require to manage hundreds or thousands of employees. With a guideline that spells of expectations, employees know what will happen if they do not toe the line and are protected from exploitation.