Collective Bargaining

What is 'Collective Bargaining'

Collective bargaining is the process of negotiating the terms of employment between an employer and a group of workers. The terms of employment are likely to include items such as conditions of employment, working conditions and other workplace rules, base pay, overtime pay, work hours, shift length, work holidays, sick leave, vacation time, retirement benefits and health care benefits.

In the United States, collective bargaining takes place between labor union leaders and the management of the company that employs that union's workers. The result of collective bargaining is called a collective bargaining agreement, and it establishes rules of employment for a set number of years. The cost of this employee representation is paid by union members in the form of dues. The collective bargaining process may involve antagonistic labor strikes or employee lockouts if the two sides are having trouble reaching an agreement.

BREAKING DOWN 'Collective Bargaining'

In the United States, there are unions in both the private sector and the public sector. As of 2009, about 7.2% of private sector employees and 37% of public sector employees were unionized. Categories of workers that belong to unions include grocery store employees, airline employees, professional athletes, teachers, auto workers, postal workers, actors, farm workers, steel workers and many more.

RELATED TERMS
  1. Organized Labor

    An association of workers united as a single, representative ...
  2. Labor Union

    An organization intended to represent the collective interests ...
  3. Terms Of Employment

    The conditions that an employer and employee agree upon for a ...
  4. General Employer

    An employer who loans an employee to another business, and who ...
  5. Taft-Hartley Act

    A Federal law that was enacted in 1947 that prohibited certain ...
  6. Workers' Compensation

    Workers' compensation is a publicly-sponsored system that pays ...
Related Articles
  1. Economics

    Unions: Do They Help Or Hurt Workers?

    Learn the pros and cons of these organizations and how they fit into today's economy.
  2. Personal Finance

    The Top 5 Most Unionized Industries

    Unions don't have the membership numbers that they once did, but they are still a vital part of several different important industries.
  3. Personal Finance

    Are Labor Unions Effective?

    This article examines some of the pros and cons associated with organized labor.
  4. Economics

    Are You the Victim of Unfair Labor Practices?

    If you are a union member, a union leader, or a manager at a company with an established union, you should understand unfair labor practices.
  5. Personal Finance

    Most Successful Unions

    Labor unions have existed in the U.S. for quite some time, but not all have been as successful as these three.
  6. Personal Finance

    The History Of Unions In The United States

    Although the overall power of labor unions may not be what it once was, they still maintain a great deal of influence in the United States.
  7. Professionals

    What Makes A Great Workplace?

    A happy workplace is a productive one, and these important qualities make a workplace good for both employees and companies.
  8. Retirement

    6 Things Putting Unions Under Fire

    We take a look at why unions arose and why things have changed.
  9. Professionals

    Top Job Perks You May Not Have Heard Of

    Companies are becoming increasingly creative with their benefits packages, in order to attract younger employees.
  10. Stock Analysis

    Avoid Unions At All Costs

    Misinformation thrown about in the auto bailout is a clear sign for investors to avoid companies with significantly unionized workforces.
RELATED FAQS
  1. Will a 10-99 form make my taxes higher?

    My employer is not withholding taxes each pay day. Will this increase my taxes because they will give ... Read Answer >>
  2. How does the Bureau of Labor Statistics define contingent workers?

    Discover how contingent workers are a significant part of the labor force and are defined as persons who do not expect their ... Read Answer >>
  3. When do I need to fill out an IRS Schedule H form?

    Learn what factors would require you to file a Schedule H Form with the IRS. Read Answer >>
  4. Are part-time employees eligible for fringe benefits?

    Learn how offering fringe benefits allows employers to entice new talent to join their teams, although part-time workers ... Read Answer >>
  5. What incentives does an employer have in offering fringe benefits?

    Learn how offering fringe benefits is a powerful business tool for employers to attract and retain quality employees while ... Read Answer >>
  6. Can LLCs have employees?

    Discover how limited liability corporations (LLC) can have an unlimited number of employees and the legal steps required ... Read Answer >>
Hot Definitions
  1. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  2. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  3. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  4. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  5. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  6. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
Trading Center