The Benefits of Collective Bargaining

By hrlineup | 21.12.2020

Collective bargaining is the negotiation between employers and employees who are represented by a trade union. The trade union directly bargains with the employer about the benefits and wages of the workers.

Benefits to workers

The outcomes of collective bargaining improve the way employers treat their workers. Provides better working condition and offer benefits that favor the employees. It also makes communication easier. The union and employers can communicate directly to employees through brochures, posters, or fliers.

Benefits to employers

Unions can provide employers with representatives that will be there to solve disputes as they arise. Having such representatives is one of the advantages of collective bargaining for employers. Through this agreement, employers will be able to plan better. Furthermore, they will ensure employees receive their payment on time, the work environment is favorable, and enjoys the benefits.

Even though most companies have embraced this process, others do not see the importance of collective bargaining. So, let’s look into the pros and cons.

Pros of collective bargaining

  1. Prevents strikes – Just like any other organization, it is normal for employers and employees to disagree. If the employer is not capable of solving the issue at hand, employees will go on strike. Collective bargaining is, therefore, going to cater to the needs of both the employer and employee. The union will appoint representatives to attend to any situations that may arise. As a result, strikes will rarely occur.
  2. Encourages cooperation – Through this agreement, employees get fair pay, great benefits, and a safe working environment. Employers, on the other hand, earn more due to an increase in production. Each party similarly plays its role for their benefit.
  3. Economic growth – Once an organization begins to generate more revenue, there will be an increase in labor force hence economic growth.
  4. Job security and stability – Many employers relieve employees of their duties as they please. With a collective bargaining agreement, it won’t be easy for any employer to terminate your contract. If they do so, the employee is entitled to certain benefits as agreed between the employer and the trade union.
  5. A better life for workers – Most collective bargaining agreements favor the employees. They get to enjoy higher wages and more benefits, such as healthcare and retirement. This wage and benefit advantage consequently improves their lifestyle.

Cons of collective bargaining

  1. Inequality – If a weak team represents the employer, they will likely incur more wages and employee benefits. On the other hand, employees may end up with payment they do not deserve if they receive a weak representation.
  2. It is biased – Arguments show that collective bargaining agreements mostly favor the workers.
  3. Long negotiation period – The process can last for months or even years to complete.
  4. Unfairness – Both the employees who have worked in a company for long and the newbies will enjoy the same pay and benefits. Equal pay seems not appropriate to the senior workers.
  5. It can widen the gap between the employer and the employee. When both parties fail to reach an agreement, it will be difficult for them to cooperate at work.


The importance of collective agreement depends on organizations’ goals. For as long as both parties agree, it is something that companies should embrace.