What Is a Collective Agreement?

Collective agreements are commonly used between companies and the unions that represent their employees. They are the product of negotiations on wages, benefits, work hours and more. Collective agreements are called such because they are agreements negotiated by the representatives for all employees within the union.

Features

Collective agreements, or collective bargaining agreements, are not legally binding until they are written into the employee contract. They are renewed periodically. These agreements include the specific items that each side---employer and employee---have agreed to.

Significance

Collective agreements can often be the only way for a group of employees to get the wage increases or benefits that they want or need.

Misconceptions

Contrary to belief, if the employer is willing, a collective agreement can be struck in a non-union company. Union reps are simply skilled in bargaining and tend to be much more successful.

Considerations

Although these agreements are attractive, federal and state laws restrict them. If negotiating your own collective agreement, be sure to review the laws when planning your strategy. Collective agreements that do not comply with the laws are rendered ineffective.

Effects

The result of a collective agreement is often better working conditions for employees, but it can also lead to higher costs for the employer. These higher costs can aid in a collapse of a company.

References

• Collective Agreement