What is a Collective Bargaining Agreement?

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  • Written By: Mary McMahon
  • Edited By: Kristen Osborne
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  • Last Modified Date: 13 June 2019
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A collective bargaining agreement is a type of labor contract setting out the terms of employment in a company, as agreed upon during negotiations between labor unions and representatives of the company. Such agreements can include multiple unions in their negotiations and are typically set to expire after one year, at which point a new agreement will need to be negotiated. Collective bargaining agreements are one among numerous tools available to labor unions to help define and protect the rights of individual workers.

In the negotiations, members of the union authorized to negotiate on behalf of employees meet with authorized representatives of the company. Both sides lay out their needs and a series of talks is conducted to meet in the middle. It generally is necessary to make concessions to reach an agreement, and breaks may need to be taken to allow negotiators to bring proposals back to the side they represent to discuss the proposals and make decisions about whether to accept them.

If union representatives are not pleased with the way the talks are going, they may threaten to call for a strike until a collective bargaining agreement can be made. The government may become involved at this point if the company is working in an essential industry that would be disrupted by a strike, like the airline industry. Government representatives may offer to act as mediators to facilitate talks so a strike can be averted.


Once talks are concluded, a collective bargaining agreement is drawn up, articulating the agreed upon points. Such agreements include terms like salaries and wages, methods for dispute resolution, working hours, safety considerations, and so forth. The resulting labor contract is considered legally enforceable when it is signed by all parties involved. If one party reneges on the collective bargaining agreement, there can be legal penalties.

Union members are made aware of their rights and responsibilities under the agreement in documents published by the union. They can also be involved in the ongoing discussions about the agreement by speaking with union representatives and casting votes for union representatives and other officials. When negotiations begin for a new collective bargaining agreement, the process of soliciting input from employees and union representatives will begin again in order to bring new terms to the table.

Employees in unionized workplaces can join the union after paying dues. Joining the union gives people access to support provided by the union, from assistance with disputes in the workplace to compensation in the event of a strike. People working in union environments are often strongly encouraged to join the union to access the union's benefits.


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