What Is Collective Bargaining?

Collective bargaining is when a group of working people, assisted by their unions, negotiate their employment contracts with their employer. Terms discussed include salary, perks, working hours, vacation time, health and safety, and work-life balance.

The general aim of collective bargaining is to make a bargain or a deal with a company's managerial department that discusses a number of problems in a specific workplace. This deal is a form of labor contract and is also known as a "collective bargaining agreement" (CBA).

What Is a CBA?

A CBA is the result of collective bargaining and it is a legal agreement that specifies the policies that both parties have agreed to. This document usually contains a grievance procedure that details the steps aggrieved parties need to follow to resolve disputes over the contract, and in any event of employee discipline or termination.

Why Collective Bargaining?

Collective bargaining is widely-considered as being the best means for negotiating better wages in the USA. Through this method, union members have negotiated higher wages, improved benefits, and safer workplaces.

The Laws That Cover Collective Bargaining

Employees in various industries are entitled the right to collective bargaining under various laws:

  • The Railway Labor Act of 1926 (RLA) grants collective bargaining to railroad workers, airline workers, and many other transportation workers.
  • The National Labor Relations Act of 1935 grants rights of most other private-sector employees. It considers collective bargaining as the "policy of the United States."
  • The National Labor Relations Act (NLRA) states that employees have the right to join unions and collectively bargain. This act prevents employers from interfering with or preventing employees that want to form a union.
    • National Labor Relations Board supplements and enforces the NLRA.
  • Other state and federal law, administrative agency regulations, and judiciary decisions.

Collective Bargaining: Resolving Disputes

If there is a dispute between the employee and the employer, then arbitration is a common method used to resolve the problem. State and federal law governs the use of arbitration.

Although the Federal Arbitration Act does not apply to employment contracts, it is being increasingly applied to labor disputes by federal courts. Forty-nine U.S. states have set the Uniform Arbitration Act (1956) as state law. If labor disputes become legal battles, the National Labor Relations Board is the federal agency that deals with them. The board also takes enforcement action when violations occur.

When Does Collective Bargaining Occur?

Collective bargaining occurs when a group of employees enter a negotiation with their employer to negotiate the details of a new or existing employment contract.

Who Can Collectively Bargain?

Not all industry sector employees are entitled to collectively bargain.

Entitled to Collectively Bargain:

  • Private Sector Employees: According to the NLRA, the majority of private sector employees can organize unions and participate in collective bargaining. Railway and airline employees are also entitled, under the RLA.
  • Federal Employees: Many federal employees can collectively bargain over a limited set of concerns under federal law.
  • Government Employees: Entitled under state law.

Human Rights Watch considers collectively bargain to be a right and preventing bargaining would be a violation of international human rights law.

Not Entitled to Collectively Bargain:

Some people working in the private sector are not able to participate in collective bargaining. These include farm workers, domestic workers, independent contractors, supervisors, and individuals working for very small businesses

What Topics Can Employees Bargain Over?

Employees are entitled to bargain over subjects that are considered mandatory to their employment contract. These generally relate to salary, working hours, pension schemes, healthcare, and workplace conditions. Employees are not entitled to bargain over things that are not considered mandatory to their contract, or illegal subjects which violate the NLRA.

The Collective Bargaining Process

The collective bargaining process usually starts when employees meet as a union and make a list of demands. In the USA, this generally takes place between one employer and its employees.

If the bargaining is happening in an industry such as hospitality or trucking, then sometimes an industry-wide or regional negotiation is necessary. For example, the collective bargaining agreement may affect employers who are in a certain city or across a whole industry.

In the construction industry, collective bargaining shouldn't need to happen because a project labor agreement (PLA) is in place before hiring workers, which sets the terms and conditions of employment for the project.

What Happens When Management and Labor Don't Agree?

If the two parties cannot come to an agreement, they can participate in a mediation process where a federal or private mediator helps them. Economic pressure in the private sector usually results in a strike or a lockout, but in the public sector, workers can only strike if the relevant law says that they can do so.

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