Collective bargaining

From New World Encyclopedia

Collective bargaining is the process of negotiation between a group of employees (often represented by a labor union) and their employer. Collective bargaining works toward accords on issues such as wages, hours of work, working conditions, and grievance-procedures. The parties often refer to the result of the negotiation as a Collective Bargaining Agreement (CBA) or as a Collective Employment Agreement (CEA). The process of collective bargaining necessarily contains an element of negotiation and hence is distinct from processes of consultation, in which employers determine outcomes unilaterally. While collective bargaining is widespread and generally effective in developed nations, it is less so in those developing nations in which a large labor population exists.

Collective bargaining may take place through the vehicle of trade unions or representatives specific to the issue under debate. In either case, the smooth and efficient functioning of society requires that, as technological and other advances continually change the working conditions for employees, these conditions be continuously monitored and adjusted. The process to achieve this must harmonize the input of both management and labor representatives, in service of the common goal of achieving the purpose of the whole, while simultaneously taking care of the needs of individuals. When this is done successfully, the entire community operates harmoniously.


The British academic Beatrice Potter Webb reputedly coined the term collective bargaining in the late nineteenth century, using it in her 1891 publication Cooperative Movement to refer to the ongoing process of negotiation between representatives of employers and workers to establish conditions of employment. Webb aimed to characterize a process alternative to that of individual bargaining between an employer and individual employees. Others have emphasized the conflict resolution aspects of collective bargaining. The inclusion of a process of negotiation distinguishes collective bargaining from the consultation process through which employers determine outcomes unilaterally. In Britain, the most important refinement in usage defined collective bargaining as a process of rule-making, leading to joint regulation in industry.

The results of collective bargaining, known as the Collective Bargaining Agreement (CBA), may include changes in wages, hiring practices, working conditions and hours, layoffs and termination procedures, and benefit programs.

Collective bargaining existed in Britain throughout the nineteenth century, developing later in continental European countries. Samuel Gompers introduced its effective use in the United States during his leadership of the American Federation of Labor (1886 to 1924). Although a successful tool in the relationship between management and workers in developed nations, collective bargaining is less effective in developing countries that have a large labor population.

Collective Bargaining around the World

Collective bargaining is particularly effective in European nations, the United Kingdom, Australia, and the the United States. The agreements reached by this process vary in the extent of their influence. Thus, in certain countries in Europe, there may be requirements that the terms of the negotiated settlement be extended to all those involved in the industry, whereas in Britain, their application depends on the goodwill of those involved.

Similarly, there is variation in the particularity of agreements. In the realm of wages, for instance, a CBA may establish actual wages or merely set a minimum level. Contract negotiations may occur on the national level, or be confined to regional or local levels, depending on the structure of the industry involved.


In Australia, Collective Bargaining Agreements have been known as Enterprise Bargaining Agreements (EBA), consisting of an agreement between employers and groups of employees or unions. The industrial reform of 2005-2006, known as "WorkChoices" (with its corresponding amendments to the Workplace Relations Act of 1996) changed the name of such agreement documents to "Collective Agreement." State industrial legislation can also prescribe collective agreements, but the enactment of the WorkChoices reform has made such agreements less likely to occur. Parties to Australian federal collective agreements now lodge and certify these with the Office of the Employment Advocate. At the state level, the appropriate state Industrial Relations Commission certifies state agreements.

Unlike Australian industrial relations awards, which provide similar standards for all workers in the entire industry covered by a specific award, collective agreements usually apply only to workers for one employer, although on occasion a short-term collaborative agreement (for example, on a building-site) yields a multi-employer/employee agreement.


Many continental European countries, including Austria, Netherlands, and Sweden, have a social market economy where collective bargaining over wages is done on the national level between national federations of labor unions and employers' organizations.

United Kingdom

In the United Kingdom, collective bargaining has become, and has received endorsement for many years as, the dominant and most appropriate means of regulating workers' terms and conditions of employment, in line with ILO Convention No. 84. However, the importance of collective bargaining in the United Kingdom has declined considerably since the early 1980s. Its decline in the public sector stems in part from the growth of Review-Body arrangements provided through the Office of Manpower Economics for groups of workers.

Despite its significance in the United Kingdom, there has been no statutory basis for collective bargaining in the fields of learning and training. This situation attracted the attention of both the Trades Union Congress and members of the Royal College of Nursing, leading to the formation of a coalition to actively seek to remedy this situation.

United States

In the United States, the National Labor Relations Act covers most collective agreements in the private sector.

Notable collective bargaining agreements (CBAs) include those between owners and players in professional sports leagues. The National Football League (NFL), National Basketball Association (NBA), and National Hockey League (NHL) all have negotiated CBAs on issues such as percentage of revenues paid to players, salary caps, pay increases, number of teams in the league, and the ease with which teams can cut players.

Other examples of CBAs in the United States include those done by powerful unions like the United Auto Workers and the International Brotherhood of Teamsters. Jimmy Hoffa's work on the National Master Freight Agreement in 1964 led to similar wage levels and benefits for teamsters across the country, as well as the elimination of discrimination in pay based on race. The United Auto Workers has reached CBA agreements with large American automotive companies regarding the same issues.

CBAs in Society

CBAs have been used as an effective method of conflict resolution in labor disputes around the world. Their use has not come without controversy however. Putting the bargaining power of an entire group of people into the hands of a few limits the voices of members, some of whom may not be pleased with decisions reached by their leaders.

Additionally, as the power of organized labor has dwindled in many industrialized countries, the efficacy of CBAs has become more limited.

Nonetheless, an ongoing process whereby employers and employees can reach agreements over the ever-changing conditions of work in each industry is essential to the efficient functioning of any society. Whether labor unions can fulfill the role of monitoring conditions, raising issues and reaching agreements with management, or whether specific situations need ad hoc groups to further the issue, remains to be seen. In either case, successful negotiations depend on the ability of representatives of both management and workers to work together harmoniously for the benefit of all involved.

ISBN links support NWE through referral fees

  • Buidens, Wayne. Collective Gaining: A Bargaining Alternative. Phi Delta Kappan 63: 244-245, 1981.
  • DeGennaro, William, and Kay Michelfeld. Joint Committees Take the Rancor out of Bargaining with Our Teachers. The American School Board Journal 173: 38-39, 1986.
  • Herman, Jerry J. With Collaborative Bargaining, You Work With the Union—Not Against It. The American School Board Journal 172. 41-42, 47, 1985.
  • Huber, Joe and Jay Hennies. Fix on These Five Guiding Lights, and Emerge from the Bargaining Fog. The American School Board Journal 174. 31, 1987.
  • Liontos, Demetri. Collaborative Bargaining: Case Studies and Recommendations. Oregon School Study Council, University of Oregon. OSSC Bulletin Series, 1987.
  • McMahon, Dennis O. Getting to Yes. Paper presented at the annual conference of the American Association of School Administrators. New Orleans, LA, February 20-23, 1987.
  • Namit, Chuck and Larry Swift. Prescription for Labor Pains: Combine Bargaining with Problem Solving. The American School Board Journal 174: 24, 1987.
  • Nyland, Larry. Win/Win Bargaining Takes Perseverance. The Executive Educator: 9, 24, 1987.
  • Potter, Beatrice. 'The Co-operative Movement in Great Britain. London: Swan Sonnenschein & Co., 1891.
  • Smith, Patricia and Russell Baker. An Alternative Form of Collective Bargaining. Phi Delta Kappan 67: 605-607, 1986.


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