What is a Collective Bargaining Agreement?

By hrlineup | 21.12.2021

The purpose of a collective bargaining agreement is to help solve the problems in a work environment. There is a long negotiation process between the two parties. Indeed, it has been of great help to workers. Through this agreement, employees earn more. The employers are also able to provide a safe working environment and excellent benefits to the employees.

So, what is a collective bargaining agreement? A written contract between an employer and a trade union. They usually discuss the set terms of employment, wages, salaries, working hours, and rights of the trade union’s employees. There are also three categories of topics involved in the CBA.  These topics are:

Mandatory topics – What the law requires in favor of the employees, such as wage and salary terms, working overtime, discipline, rank, and safety in the working environment.

Voluntary topics – These involve the union’s internal affairs and decisions involving employers’ board of directors.

Illegal topics – These are subjects that are directly against the law. For example, an employer hiring only members of a particular trade union is acting on discrimination.

A collective bargaining process involves specific steps. See below.


An employer and trade union leaders’ legal duty is to bargain to conclude the collective agreement process. If involved parties do not reach an agreement, they can consider hiring a conciliation officer’s services.

However, in a scenario where they agree, it won’t be applicable just yet. Employee Bargaining agreement must be given formal consent.


A conciliation meeting is to ensure the employer and the trade union agrees. The ministry of labor appoints the conciliation officer to mediate disputes between employers and trade unions. He/she is also a public officer. Suppose there is an agreement at the end of the process, the conciliation officer has to notify the ministry. Before the new agreement becomes law, a vote of the agreement must be held between both parties.

The conciliation officer will still have to report back to the ministry if the meeting is not successful. The ministry will now send the employer and the union a notice. This notice will inform them of the board of conciliation’s appointment to solve the problem. The employer and the union, at this point, can continue bargaining to agree.

Strikes and lockouts

Strikes and lockout need to be legal. Therefore employers and trade unions cannot participate in such strikes unless the agreement binding them expires. They can also participate in strikes if the ministry fails to appoint a board of conciliation.

Interest arbitration

Interest arbitration involves a neutral arbitrator that both parties choose to reach an agreement in a bargaining process. Even though it can be costly, both parties guarantee that the arbitrator will be neutral and help them on matters that favor them all. Interest arbitration is an excellent process, especially for organizations that can not hold a strike, such as hospitals.


Before an employer considers getting into a negotiation process with a trade union, It is essential to understand the process. It is advisable to get legal counsel because both parties should uphold the agreement once the collective bargaining agreement becomes law.