What Are the Benefits of a Collective Bargaining Contract?
Collective bargaining is the process through which a company and a union negotiate the terms and conditions of employment. The bargaining process typically leads to a mutually acceptable memorandum of agreement between the parties, which sets out specific requirements for factors of employment such as wages, benefits and premiums.
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Salary and Benefits
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According to data gathered by the Bureau of Labor Statistics (BLS), full-time workers represented by a union earn substantially higher salaries than full-time workers who are not unionized. The median weekly salary of a union member in 2010 amounted to $917. The median earnings of workers who did not belong to a union were $200 lower, at $717 per week. According to Change to Win (a group of affiliated labor organizations), union members are more likely to have health benefits than nonunion workers, and the health benefits provided are less expensive for union members compared to nonmembers. Unionized employees are much more likely to have defined benefit plans than nonunion employees; however, this could also be a function of the increased union presence in the public sector (which traditionally is more likely to provide a defined benefit pension).
Consistency
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Having a union contract in place establishes consistent practices and procedures across all divisions, regions and offices within the company. All managers and supervisors of unionized employees are required to follow the contract, which typically contains strict instructions for company procedures such as premium assignments and transfer requests. The contract typically also regulates overtime, callback work and on-call pay, preventing any inconsistency in the application and payment of these activities by the employer.
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Disputes
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The union contract provides employees with an avenue to resolve and enforce disputes over terms and conditions of employment. The contract typically includes a grievance procedure, allowing the union to contest a management decision deemed to be in violation of the contract. If the grievance cannot be resolved within the company, a neutral external arbitrator can make a decision over the issues. The contract protects employees who might otherwise be unable to fight to protect their own interests.
Benefits for the Employer
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Collective bargaining also provides benefits for the employer. A multiyear contract allows for budget predictability and stability. It also provides labor peace and restricts the workforce from strikes and work interruptions during the term of the contract. Management can resolve issues at the lowest possible level through the grievance procedure, rather than facing a lawsuit from an issue that management might not have even known existed. Similarly, management can be more informed about employee morale and issues in the workplace with a union. This is because employees are more likely to report issues to the union than they are to the employer. Likewise, the union is more likely to inform the employer about -- and seek resolution for -- issues than employees, who could be reluctant because of concern for their careers.
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