How Collective Bargaining Agreements Work

By: Dave Roos

Terms of Collective Bargaining Agreements

Collective bargaining agreements are lengthy, detailed legal documents that cover every aspect of the working relationship between workers and management. Like a standard contract, a collective bargaining agreement is divided into articles and clauses. The following are considered "mandatory" subjects covered by all collective bargaining agreements:

  • Wages and hours -- Unions and management must agree on the hourly wages and overtime rules for each job position covered by the agreement.
  • Fringe benefits -- This section includes, but is not limited to, paid and unpaid vacation days, holidays, sick leave, jury duty, maternity leave, health care coverage, pension and other retirement savings plans.
  • Scope of work -- Many collective bargaining agreements go into great detail to describe the scope and responsibility of each job title.
  • Seniority and promotions -- Workers who have been on the job the longest may be entitled to greater benefits (more vacation time, first to be considered for promotion) and some protections (last to be laid off) defined by the agreement.
  • Grievance procedure -- The agreement outlines the dispute resolution process for matters like unfair firings and pay discrepancies. Grievances typically have to be in writing and arbitration, if necessary, is chosen by both parties or provided by the Federal Mediation and Conciliation Service.
  • Disciplinary measures -- Union membership doesn't mean you can't be demoted or fired. This section details the acceptable reasons and processes for disciplinary action or termination.
  • No strike/no lockout - Many collective bargaining agreements contain a clause preventing either side from participating in a strike or lockout while the contract is active. This clause does not hold in cases where one side accuses the other of unfair labor practices.
  • Union dues - Most agreements allow for dues to be automatically deducted from employee paychecks. In so-called "open shops," where union membership isn't mandatory for employment, even non-union workers pay a service fee, since they're also covered by union negotiations [source: Center for Labor Education and Research].

Keep reading for lots more information about labor relations.