Definition
The term collective bargaining is used to describe a process by which employees negotiate the terms and conditions of the workplace with their employers. Collective bargaining is used to negotiate hourly wages, payroll policies, employee benefits, as well as safety practices.
Explanation
Collective bargaining is a process used by employees to negotiate working conditions with their employers. The right to collectively bargain is provided by the National Labor Relations Act of 1935. Any group of employees can engage their employer in this process; however, collective bargaining typically occurs between representatives of an employer and those of a trade union.
Collective bargaining will address a large number of workplace conditions, including hourly wages, annual increases in pay, overtime policies, job specifications, promotions, transfers, bumping rights, vacation days, holidays, paid leave (jury duty, death in the family), personal days, drug testing, safety practices, dispute resolution, discipline and discharge, as well as retirement benefits (pension plans).
The outcome of these negotiations will usually result in a contract between the employer and bargaining unit. The duration of the agreement is typically two to four years. The agreed-to working conditions are documented in a collective bargaining agreement (CBA) or collective employment agreement (CEA).
Another round of negotiations will occur between representatives of the employer and bargaining unit leadership prior to the expiration of each contract. The CBA will also outline a grievance process, by which disputes between employees and employer are settled. When the bargaining unit and employer fail to settle a dispute as part of the grievance process, an arbitrator may be asked to render a final, and binding, decision.
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