Collective Bargaining

Collective bargaining is the negotiation process that takes place between an employer and a group of employees when certain issues arise. The employees rely on a union member to represent them during the bargaining process, and the negotiations often relate to regulating such issues as working conditions, employee safety, training, wages, and layoffs. When an agreement is reached, the resulting “collective bargaining agreement,” or “CBA,” becomes the contract governing employment issues. To explore this concept, consider the following collective bargaining definition.

Definition of Collective Bargaining


  1. Negotiation of issues or conditions of employment by an organized body of employees and the employer.


First used in 1891 Beatrice Webb, founder of industrial relations in Britain

What is Collective Bargaining

The National Labor Relations Act, or “NLRA,” was established in 1935. The Act set the standards for U.S. labor laws, which guarantee employees certain basic rights, such as the right to organize into trade unions, and the ability to engage in collective bargaining negotiations. The Act requires officials elected to head a union to meet with the employer to negotiate conditions. Specific rules in support of collective bargaining include:

  • There is a limit of one representative for each unit of employees
  • All representatives must promote the practice, and follow all procedures, of collective bargaining
  • Employers must bargain with the employees’ representatives
  • Employees and their representatives have the right to discuss wage issues

Not all employers and employees are covered under the act. For example, independent contractors and government workers are excluded from the NLRA. However, the Act does stipulate that these workers cannot be prevented from joining labor unions if they wish to do so.

Unfair Labor Practices

Part of the National Labor Relations Act’s responsibilities includes ensuring employers do not engage in unfair labor practices. Under the Act, employers are obligated to follow certain laws, and are prohibited from certain actions, including:

  • Interfering with, coercing, or restraining employees’ right to form, join, or assist in the formation of labor organizations
  • Dominating or interfering with the formation of any labor union organization
  • Discrimination in hiring or tenure of employees in order to discourage participation in union organization
  • Discriminating against any employee who files charges or testifies against the employer
  • Refusing to bargain with the employee’s representative

The National Labor Relations Board

The National Labor Relations Board (“NLRB”) was formed in 1935 to oversee compliance with the National Labor Relations Act. This federal agency is charged with managing legal disputes between employees and an employer. The agency is also responsible for taking action against employers in violation of the NLRA.

Good Faith Bargaining

Both employees and employers are required to partake in good faith bargaining. While this term may involve many issues, it typically includes (1) refusal of either party to meet and attempt to bargain with the other party, (2) engaging in sham or misleading negotiations, and (3) making changes to the terms of an existing CBA without consulting the other party. The NLRB helps ensure all employers and employee representatives adhere to these conditions as, when principles of good faith bargaining are not adhered to, the negotiation process between employer and employees may be more difficult.

Mandatory Bargaining Issues

Employers do not have to engage in good faith bargaining over every issue that arises as some may be considered trivial and are not covered under the labor laws. There are some issues, however, that are considered mandatory bargaining issues for which employers must participate in collective bargaining, including wages, layoff procedures, and hours. When an employee group desires changes to be made in an issue subject to collective bargaining, it must give advanced notice to the employer. If the employer refuses to meet in collective bargaining over the issue, it may be charged with unfair labor practices, and the NLRB may step in. This often results in an investigation by the NLRB, and potentially in a labor strike.

collective bargaining process

Collective Bargaining Process

The collective bargaining process involves five core steps:

  1. Preparation – Choosing a negotiation team and representatives of both the union and employer. Both parties should be skilled in negotiation and labor laws, and both examine available information to determine whether they have a strong standing for negotiation.
  2. Discussion – Both parties meet to set ground rules for the collective bargaining negotiation process.
  3. Proposal – Both representatives make opening statements, outlining options and possible solutions to the issue at hand.
  4. Bargaining – Following proposals, the parties discuss potential compromises, bargaining to create an agreement that is acceptable to both parties. This becomes a “draft” agreement, which is not legally binding, but a stepping stone to coming to a final collective bargaining agreement.
  5. Final Agreement – Once an agreement is made between the parties, it must be put in writing, signed by the parties, and put into effect.

Continuous Bargaining

Continuous bargaining is a method of collective bargaining in which ongoing negotiations between the employer and the union representative take place. This may occur when the employer and union representative have a good working relationship that enables them to continually make small changes to ensure positive employment policies.

Concession Bargaining

Concession bargaining is a method of collective bargaining that sometimes takes place when the employer is in distress. In this situation, the union may give the employer back a previous agreement in exchange for job security for the largest number of employees. For example, a union may give up paid time off in exchange for protection for layoffs.

Benefits of Collective Bargaining

According to studies, employees covered by collective bargaining often have better working conditions, higher wages, and better benefit packages than employees who are not members of a labor union. For example, union workers are more than 18 percent more likely to have affordable health insurance, and 22 percent more likely to have pension coverage. Wage advantages offered by collective bargaining mostly benefit earners of middle and lower wages, reducing wage gaps. Membership in labor unions and collective bargaining also benefits employees by decreasing the wage gap that exists between male and female employees.

Collective Bargaining in Education

Collective bargaining in education consists of a process in which faculty and the board of trustees at a school interact and negotiate terms of employment. The collective bargaining process in education, similar to other forms of collective bargaining, results in legally binding agreements that cannot be changed by only one side. If changes are needed, both parties must participate in negotiations to reach a new agreement.

Some reasons educational employees are encouraged to engage in the collective bargaining process include:

  1. It creates a feeling of shared control over employment issues and the decision making process.
  2. Clearly defined employment policies reduce uncertainty.
  3. A fair and effective grievance procedure increases faculty confidence that problem issues will be handled in a fair and timely manner.
  4. A negotiated agreement that addresses faculty concerns provides a sense of security.
  5. The policy of collective bargaining puts pressure on both sides to act in good faith in regard to employment practices.

Employer Duty to Supply Information

While the employer has an obligation to supply pertinent information to the union during the collective bargaining process, only certain information is required to be supplied. For example, if an employer claims it cannot grant a wage increase request due to financial problems, the union has the right to request documents supporting the employer’s claims. The employer must also provide the employees’ current salary rates and benefit information upon request.

Union Duty of Fair Representation

When an employee is a member of a union, the union has a duty to provide fair representation to the employee. While the union is not required to act on every request that an employee makes, it must treat each and every request fairly regardless of the employee’s race, age, sex, or education. If an employee feels that the union has breached its duty of fair representation, he may follow certain procedures to file a grievance. If there are no grievance procedures available, the employee may hire an attorney to help ensure his rights are protected. Because employment law can be complex, an attorney experienced with employment issues is best suited in this situation.

When a Deal is Not Reached

When a collective bargaining dispute cannot be resolved through ordinary means, the issue falls into the hands of the NLRB. The board investigates the claims over which a deal was not reached, and looks at information from both sides in determining whether future proceedings are necessary. The NLRB may make a decision siding with either party, as long as fair labor laws are not violated.

Paying for Representation

In many states, employee union members are required to pay for a portion of the cost of representation during the collective bargaining process. Employees may also be required to pay monthly dues, which may be equal to 1% or 2% of their pay. In some jurisdictions, the dues may not be used for representation during collective bargaining, while in other jurisdictions the dues are specifically for such representation.

International Collective Bargaining

Collective bargaining is an international human right recognized in Article 23 of the Universal Declaration of Human Rights. The right to international collective bargaining is promoted through international labor standards, and though not all countries recognize the National Labor Relations Act or National Labor Relations Board, many countries have their own associations or agencies that oversee labor rights.

Related Legal Terms and Issues

  • Coercing – persuading or forcing a person to do something through the use of manipulation or threats.
  • Dues – the cost of membership when a person joins a union or club. Dues many be required weekly, or annually.
  • Grievance – a formal complaint filed by an employee or agent. Some employers or agencies have specific procedures that must be followed.
  • Independent Contractor – a person who agrees to do work for someone else using his own methods.
  • Layoff – a permanent or temporary discharge of employees.
  • Strike – the act of employees organizing and protesting employment practices in an attempt to induce changes.
  • Union – an organized group of employees that is formed to protect workers from unfair labor practices.