What is collective bargaining?

Collective bargaining is a process for contract negotiation, generally reserved for union employees. Collective bargaining usually takes place between the employer and a representative of the group of employees. The representative presents the employer with a list of conditions from the group for the employer to consider and works with the employer to establish an agreeable contract.

Related: What Is the Cost of Hiring an Employee?

What is the purpose of collective bargaining?

Collective bargaining is used to ensure safe and fair working conditions for all members of the union or organization. Since the employees band together as a collective, they have a tremendous amount of power over the employer, allowing them to negotiate for certain terms that will apply to every worker’s contract. At the conclusion of a successful negotiation, the employer and the representative both sign a Collective Bargaining Agreement, or CBA. This document is often referred to as the “law” of the organization and guides workplace decision making until the next collective bargaining session.

Which employees can collectively bargain?

Most employees have the ability to collectively bargain if they choose to. Employees who can collectively bargain include:

• Most private sector employees:The majority of private sector employees, including railway and airline employees, can organize and collectively bargain.
• Federal employees:Federal employees can collectively bargain over a small set of subjects under federal law.
• Government employees:Government employees have collective bargaining power under their state laws.

Employees who do not have collective bargaining rights include:

• A few private sector employees:While roughly 85% of the private sector has the option to collectively bargain, farm workers, domestic workers and some others don’t have the right.A few statesdon’t allow collective bargaining for their private sector employees. Be sure to check your state laws for specifics.
• Independent contractors:Since independent contractors work for themselves rather than a traditional employer, they don’t have collective bargaining rights.
• Employees of extremely small businesses:Those employees who work for businesses with a very small number of employees don’t have the ability to collectively bargain.

What topics can employees bargain over?

Employees can collectively bargain over some employment related subjects, but not all. The National Labor Relations Board, with the help of federal and state courts, determines which subjects are open to collective bargaining. Following are details on those categories.

Mandatory bargaining

Employers must discuss and consider subjects in the mandatory bargaining category if presented by the employee representative. Common subjects for discussion in this category include:

• Wages and compensation
• Work hours
• Pensions
• Healthcare
• Working conditions and environment

Permissive bargaining

Some bargaining subjects are left up to the discretion of the employer. These permissive bargaining subjects are optional for consideration, and open to negotiation. Common permissive bargaining topics are less precise than mandatory topics. Usually, they include:

• The use of a union label or flag
• The union’s bargaining party make-up
• The employer’s bargaining party make-up
• Interest arbitration

Illegal bargaining

Illegal bargaining topics are strictly off-limits and not open to negotiation. Usually, they’re not open to negotiation because they would violate a state or federal law. Common examples of illegal bargaining subjects include:

• Closed shop provisions, particularly for a right-to-work state
• Discrimination against employees based on race, sex, age, religion or other factors

What does the collective bargaining process look like?

The collective bargaining process is somewhat ongoing, though there are consistent benchmarks throughout the year. Review a standard collective bargaining process, beginning just before negotiation:

1. Gather the union

The union usually gathers in advance of the annual, or regularly scheduled, contract negotiation to discuss the previous year’s contract and suggest adjustments or inclusions.

2. Determine priorities

After discussion, and potentially several meetings, the union leaders and employees determine their priorities for the new contract and establish a thorough proposal to present to the employer’s bargaining team.

3. Set a meeting

Once the union and employees are ready to negotiate the contract, they’ll request a meeting with the employer. Collective bargaining sessions are almost always held in person.

4. Establish representatives

Both parties, the employees and the employer, select representatives for the meeting. The employer usually attends the session with other members of the upper management team. The employees are usually represented by a combination of both union leaders and employees.

5. Attend an initial meeting

The initial meeting gives the union representatives and employees the opportunity to present their proposal and requests for the coming contract. Depending on the time frame and complexity of the negotiation, the employer representatives may respond immediately with a counteroffer or they may take the proposal for further review before creating a counteroffer.

6. Negotiate counteroffers

Either within the initial meeting or over the course of several additional meetings, the employees and the employer come to an agreement on the terms for the coming year’s contract. Usually, the employee representatives take the final contract back to the full group of employees for review and voting before agreeing to the terms.

7. Sign the CBA

Once all parties are satisfied with the terms, the representatives for both the employees and the employer sign the Collective Bargaining Agreement.

8. Assess the contract

The employees and employer meet the conditions outlined in the contract, and both parties assess any adjustments they’d like to make before the next round of contract negotiations begins.

Collective bargaining is an important process in the United States. It is designed to ensure equitable and safe working conditions and compensation for the majority of employees. Know what to expect when entering a collective bargaining negotiation for the best possible outcome for your company and your employees.