Importance of the Collective Bargaining Process

Lesson Transcript
Instructor: Shawn Grimsley

Shawn has a masters of public administration, JD, and a BA in political science.

One of the primary advantages of unionization for workers is the collective bargaining process. In this lesson, you'll learn about collective bargaining and why it is important in labor-management relationship. A short quiz follows.

Unions and Collective Bargaining

Mary works at an airplane manufacturing plant. She's a member of a union, which is an organization of workers who act as a unit to advance their mutual interests and improve the terms and conditions of their employment. One of the most important tools in a union's toolbox is the right to collectively bargain with the company.

Mary doesn't negotiate with her employer on her own. Instead, she's a part of a group of employees, called a collective bargaining unit, that engages in collective bargaining. Collective bargaining occurs when employees are able to negotiate the terms and conditions of their employment with an employer as a unit rather than individually. Mary's unit will select a union representative to speak for all of the employees with one voice. Mary's collective bargaining unit will use its power and leverage to negotiate on Mary's behalf for better wages, benefits and other terms and conditions of employment.

A law that's near and dear to Mary's heart is the National Labor Relations Act. This law gives Mary and other workers the right to unionize and collectively bargain. If Mary or her union believes her employer is violating the Act, they can turn to the National Labor Relations Board, who is there to make sure that the rights afforded under the Act are honored.

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  • 0:03 Unions & Collective Bargaining
  • 1:23 Collective Bargaining…
  • 1:49 Limitations
  • 3:33 The Rules
  • 5:13 Importance
  • 7:03 Lesson Summary
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Collective Bargaining Agreement

The main goal of the collective bargaining process is the attainment of a collective bargaining agreement between the employer and the employees, like Mary. This agreement will govern much of the employer-employee relationship, including such things as wages, benefits, hours of work, grievance procedures and other terms and conditions of employment. Now, let's take a look at how the collective bargaining process works.


There are some important restrictions to collective bargaining. First, the company and union cannot enter into an agreement about something that is illegal under federal or state law. For example, a union cannot bargain away Mary's rights under workers compensation law or under the Civil Rights Act of 1964.

Second, rights and duties imposed by law cannot be waived. For example, Mary's union rep cannot agree to waive an employer's obligations under relevant Occupational Safety and Health Administration regulations and standards. Mary has a right to the safety and health regulations under OSHA, and those protections cannot be bargained away.

Third, the law allows a bit of legal coercion. Sometimes, one side can be pressured to involuntarily agree to a concession. Each party - employer and employees through the union - can employ certain tactics to involuntarily pressure the other side to a concession. A strike is an example of such a tactic. A strike can be very costly, and the threat of one may compel management to make a concession at the bargaining table to avoid the cost.

Finally, employers can bargain only with the bargaining unit's representative. Mary and the other members of the unit must pick a representative to negotiate with the employer on their behalf. Once the representative is selected, he or she has the sole authority to represent the bargaining unit in negotiations. Mary's employer cannot negotiate with anyone else, and Mary and her fellow employees cannot try to negotiate on their own behalf with the employer.

The Rules

The union representative and the negotiator for management must follow some basic rules while engaged in the collective bargaining process. Let's take a look.

The parties must bargain over mandatory subjects of bargaining. Mandatory subjects of bargaining include such issues as wages, hours, benefits and other terms and conditions of employment. These are subjects that are directly related to Mary and her work.

Parties are not required to negotiate over permissive subjects of bargaining. Permissive subjects are those issues that are neither mandatory nor illegal, such as the definition of the bargaining unit, internal union matters or the composition of the company's board of directors. Employees and unions can, and often do, negotiate over permissive subjects, but refusing to do so will not violate the law. In fact, it may be considered an unfair labor practice for an employer or the union to demand bargaining over permissive subjects.

The law does not require that an agreement be reached, but it does require that each side negotiate in good faith over the mandatory subject of bargaining until they reach a deadlock. You can think of acting in good faith as acting with sincerity and dealing with the other side fairly.

An employer cannot unilaterally change a term of employment that is a mandatory subject of bargaining if there is a collective bargaining in effect and the negotiations have not become deadlocked. However, if the negotiations become deadlocked, the employer is permitted to unilaterally make the change if it first presents the change to the union for consideration.

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