Collective Bargaining

Collective Bargaining -

Definition: Collective bargaining is the process by which workers, through their representatives or trade unions, negotiate with employers about the terms and conditions of employment. This can include wages, working hours, benefits, workplace safety, job training, and other employment-related issues.

Historical Background: Originating in the 19th century during the rise of industrialization, collective bargaining developed as a response to the power imbalance between individual workers and large employers. By banding together, workers sought to negotiate more favorable employment terms than they could secure individually.

Key Elements:

  1. Negotiating Parties: Typically involves a representative body (often a trade union) on behalf of the workers, and the employer or a representative of employer associations.
  2. Bargaining Unit: Refers to a group of workers represented by a union or other representative body in the bargaining process. The composition of this unit can be a point of contention and usually requires legal definition or certification.
  3. Collective Agreement: The outcome of successful collective bargaining is often a written contract (sometimes referred to as a collective agreement or a collective bargaining agreement) which sets out the agreed terms and conditions of employment for a specified period.
  4. Good Faith: Both parties are generally required to negotiate in ‘good faith’, meaning they should have a genuine intention to reach an agreement, avoid conduct that would undermine the bargaining process, and actively engage in constructive discussions.

Processes and Stages:

  1. Preparation: Both parties gather information, set objectives, and develop strategies before entering negotiations.
  2. Negotiation: Direct discussions between the representatives of workers and employers to reach mutual agreement.
  3. Mediation: If parties can’t reach an agreement, a neutral third party may be involved to help resolve differences without imposing a solution.
  4. Arbitration: When negotiations and mediation fail, a neutral third party (an arbitrator) might be called upon to make a binding decision for both parties.
  5. Implementation: Once an agreement is reached, the terms are put into effect, often requiring changes in company policies, procedures, or even restructuring.


  • For Workers: Achieve better working conditions, higher wages, job security, and improved workplace environment.
  • For Employers: Maintain industrial harmony, ensure stable labor relations, and predict labor costs for a specified period.

Challenges: While collective bargaining is instrumental in leveling the playing field between employers and employees, it can sometimes lead to industrial actions (like strikes) when negotiations break down. Moreover, global competition and changes in the economic environment can impact the bargaining power of both sides.

Legal Framework: The right to collective bargaining is recognized internationally by the International Labour Organization (ILO). However, the legal framework, rights, and obligations differ from one country to another, influenced by local labor laws, economic conditions, and cultural norms.

Q&A Section:

  1. What is the primary goal of collective bargaining? To negotiate and establish written agreements between workers and employers regarding terms and conditions of employment.
  2. Who usually represents the workers during collective bargaining? Trade unions or other representative bodies typically represent the workers.
  3. What happens if the two parties cannot agree during negotiations? They might seek mediation or, if that fails, resort to arbitration.
  4. Is the outcome of collective bargaining legally binding? Yes, the collective agreement reached is legally binding for both parties for its duration.
  5. What is the significance of the ‘good faith’ principle in collective bargaining? It requires both parties to genuinely intend to reach an agreement, avoiding behaviors that might undermine the negotiation process.


  1. Automotive Industry: In the U.S., the United Auto Workers (UAW) union has historically negotiated with major car manufacturers like General Motors, Ford, and Chrysler to set wages, benefits, and working conditions for their members.
  2. Public Sector: Teachers’ unions in various countries often engage in collective bargaining with school districts or government entities to determine salaries, class sizes, and other employment terms.
  3. Entertainment Industry: The Screen Actors Guild – American Federation of Television and Radio Artists (SAG-AFTRA) negotiates on behalf of its members with production companies over issues like pay rates, working hours, and residual payments.
  4. Healthcare: Nurses and other healthcare professionals might negotiate through their unions with hospitals or healthcare providers to address staffing levels, safety conditions, and pay scales.
  5. Airline Industry: Pilots, cabin crew, and ground staff unions often engage in collective bargaining with airlines to discuss contracts that cover wages, benefits, and working conditions.

Conclusion: Collective bargaining is a vital mechanism in the field of human resources, providing a platform for workers and employers to negotiate terms of employment. By facilitating dialogue and compromise, it seeks to balance the interests of both parties and contribute to a harmonious workplace environment.

Find this article useful? Fine more like it in our Top 50 HR Terms Every HR Professional Needs to Know series.

Article Written by Jacob Peebles, with research and assistance from chatgpt