Collective Bargaining Agreements: Employers Guide


Clare Parkinson


05 Sep 2019


If you employ individuals who are members of a union, you’ve likely come across the term ‘collective bargaining”—this guide explores its purpose in the world of business.


What is collective bargaining?

It’s the process of negotiating with a trade union regarding employee wages and other terms of employment.


What is a collective bargaining agreement?

This is the name of any agreement that comes out of the negotiations with the union.

The purpose of a collective bargaining agreement is to establish specific terms for your employees. This could be in relation to anything in your employees’ contracts. Including, but not limited to:

You can choose not to recognise the union to avoid negotiation, but employees can apply for statutory recognition through the Central Arbitration Committee (CAC).

If you do reach a collective bargaining agreement with a union, just remember that sometimes one of these agreements can affect individuals not represented by a union.

For example, if the negotiations involve a ‘group’, i.e. contractors, then the agreement will impact all contractors within your business.


What’s the difference between collective bargaining and negotiation?

You’ll often hear people use the two terms interchangeably.

They’re essentially the same—collective bargaining is just a negotiation between a trade union and an employer—whereas negotiation can occur in other instances.


Different types of collective bargaining

Although this won’t impact your decision making too much, it’s good to know the different types of collective bargaining that can occur. Here’s the main four:

  1. Conjunctive: Both parties try to gain from the other’s loss, usually involving wages, bonuses, and other employee benefits.
  2. Co-operative: Both parties try to resolve a problem of their common interest, usually involving work terms and technology solutions
  3. Productivity: The employer trying to increase productivity through incentives or bonuses. Increasing productivity has the knock-on effect of increasing the company’s success.
  4. Composite: The employee expressing concerns regarding things such as working conditions, policies, recruitment, with the intention to safeguard employees working at the company.

Collective bargaining law

Are there regulations stating what you can and can’t do when negotiating? Well, there’s no legal requirement for you to negotiate with the union unless it’s been ‘recognised.’ Then, there are some rules of collective bargaining:

  • The union side must consist of full-time officials, workplace representatives, or a mix of both.
  • You must negotiate your side as the individual employee or your association.
  • Multiple unions can represent individuals on the union side.
  • The agreement has no specific time period—you can negotiate this.

Other than these, there aren’t many restrictions.


How does collective bargaining work?

In an ideal world, it’s a simple meeting between you and a trade union representative to discuss terms of employment for your workforce.

The end goal is a collective agreement where both you and the union is happy with a change to your employees’ terms and conditions. However, this doesn’t always happen.

Failing to reach an agreement can result in strikes, sit-ins and resignations, which can cause significant damage to your business.

So, finding a middle-ground is often in your interest.


Collective bargaining agreement sample contract

When negotiating it can be useful to have a collective bargaining model agreement to hand.

However, these agreements tend to be very, very large.

For this reason, we’ll just give a sample of a section of one relating to new terms for a grievance procedure:




SECTION 6.1 - ------------


Disputes relating to the interpretation or application of the specific provisions of this Agreement may be the subject of a grievance. Any such grievance shall be processed in the following manner:

Step 1. The employee shall first attempt to resolve the grievance with their immediate supervisor within seven (7) calendar days from the date of the occurrence of the event giving rise to the grievance, or within seven (7) calendar days of the date the employee knew or should have known of such event. The supervisor shall give their answer within seven (7) calendar days from that date, after receiving permission to resolve said grievance from either the applicable Operations Manager or Director.

Step 2. If the grievance is not resolved at Step 1 to the satisfaction of the grievant, the grievance shall be reduced to writing and presented to the designated representative of the Company within seven (7) calendar days after the receipt of the immediate supervisor's answer. The written grievance must state the nature of the grievance, the circumstances out of which it arose, the remedy or correction requested and the specific provisions of the agreement alleged to have been violated. The Company representative will give their answer to the grievant in writing with a copy to the Union within seven (7) calendar days after the receipt of the grievance.

Step 3. In the event the decision by the Company representative is unacceptable to the aggrieved employee or union, it may be appealed in writing to the designated representative of the Company within seven (7) calendar days of the receipt of the decision. The appeal must include a statement of the reasons the grievant believes the decision was erroneous. The Company's representative shall render a decision on the appeal in writing within seven (7) calendar days of receipt of the appeal. In the event the decision at Step 3 is unacceptable to the grievant, the Union may appeal to the System Board of Adjustment in accordance with Article 7 of this agreement.”


Expert support

Negotiating with a union can be a daunting and tricky task. Having a representative who is up to date in all of the latest employment law legislation is a big help. Luckily- that’s exactly what we do!

Get on-site support with one of our employment law experts today on 0808 145 3380.

About the Author

Clare Parkinson has over 20 years’ experience in the Croner Reward business. As Business Manager, Clare leads a team of Reward Consultants who specialise in the delivery of pay and grading related advice, including tailored pay benchmarking and gender pay reports.

Over the years, Clare has contributed to various industry publications on topics such as gender pay, executive remuneration and market pay trends.

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