A collective agreement, collective labour agreement (CLA) or collective bargaining agreement (CBA) is a written contract negotiated through

collective bargaining Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The ...

for employees by one or more

trade union A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and benefits ...

s with the management of a company (or with an

employers' association An employers' organization or employers' association is a collective organization of manufacturers, retailers, or other employers of wage labor. Employers' organizations seek to coordinate the behavior of their member companies in matters of mutual ...

) that regulates the terms and conditions of employees at work. This includes regulating the wages, benefits, and duties of the employees and the duties and responsibilities of the employer or employers and often includes rules for a dispute resolution process.

Finland

Finland Finland ( fi, Suomi ; sv, Finland ), officially the Republic of Finland (; ), is a Nordic country in Northern Europe. It shares land borders with Sweden to the northwest, Norway to the north, and Russia to the east, with the Gulf of B ...

, collective labour agreements are universally valid. This means that a collective agreement in an economic sector becomes a universally applicable legal minimum for any individual's employment contract, whether or not they are a union member. For this condition to apply, half of the workforce in that sector needs to be union members, thus supporting the agreement. Workers are not forced to join a union in a specific

workplace A workplace is a location where someone works, for their employer or themselves, a place of employment. Such a place can range from a home office to a large office building or factory. For industrialized societies, the workplace is one of th ...

. Nevertheless, with 70% average unionization, most economic sectors are under a collective labour agreement. An agreement does not prohibit higher wages and better benefits, but establishes a legal minimum, similarly to a minimum wage. Furthermore, a

national income policy agreement Finnish national income policy agreements or comprehensive income policy agreements (, often called ''tupo''; ) are tripartite agreements between Finnish trade unions, employers' organizations, and the Finnish government. They are policy document ...

is often, but not always reached, which includes all

s, employers’ associations, and the Finnish government.

Germany

Collective agreements in Germany are legally binding, and this is accepted by the population, and it causes no alarm. Whereas in the UK there was (and arguably still is) a "them and us" attitude in industrial relations, the situation is very different in post-war Germany and in some other Northern European countries. In Germany, there is a much greater spirit of cooperation between the two sides of industry. For over 50 years, German workers by law have had representation on company boards. Together, management and workers are considered "social partners".

Sweden

In Sweden about 90 per cent of all employees are covered by collective agreements, in the private sector 83 per cent (2017). Collective agreements usually contain provisions concerning minimum wages. Sweden does not have statutory regulation of minimum wages or legislation on extension of collective agreements to unorganized employers. Non-organized employers can sign substitute agreements directly with trade unions, but many do not. The Swedish model of self-regulation applies only to workplaces and employees covered by collective agreements.

United Kingdom

common law In law, common law (also known as judicial precedent, judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written opinions."The common law is not a brooding omnipres ...

, Ford v A.U.E.F.

969 Year 969 ( CMLXIX) was a common year starting on Friday (link will display the full calendar) of the Julian calendar, the 969th year of the Common Era (CE) and ''Anno Domini'' (AD) designations, the 969th year of the 1st millennium, the 69th ...

the courts once held that collective agreements were not binding. Then, the

Industrial Relations Act 1971 The Industrial Relations Act 1971 (c.72) was an Act of the Parliament of the United Kingdom, since repealed. It was based on proposals outlined in the governing Conservative Party's manifesto for the 1970 general election. The goal was to stabil ...

, introduced by

Robert Carr Leonard Robert Carr, Baron Carr of Hadley, (11 November 1916 – 17 February 2012) was a British Conservative Party politician who served as Home Secretary from 1972 to 1974. He served as a Member of Parliament (MP) for 26 years, and later se ...

(Employment Minister in

Edward Heath Sir Edward Richard George Heath (9 July 191617 July 2005), often known as Ted Heath, was a British politician who served as Prime Minister of the United Kingdom from 1970 to 1974 and Leader of the Conservative Party from 1965 to 1975. Heath a ...

's cabinet), provided that collective agreements were binding unless a written contract clause declared otherwise. After the demise of the Heath government, the law was reversed to reflect the tradition in British industrial relations policy of legal abstentionism from workplace disputes. The law is now contained in the

Trade Union and Labour Relations (Consolidation) Act 1992 The Trade Union and Labour Relations (Consolidation) Act 1992c 52 is a UK Act of Parliament which regulates United Kingdom labour law. The Act applies in full in England and Wales and in Scotland, and partially in Northern Ireland. The law cont ...

s.179, whereby In the United Kingdom, collective agreements are conclusively deemed to be not legally binding. This presumption may be rebutted when the agreement is in writing and contains an explicit provision asserting that it should be legally enforceable. Although the collective agreement itself is not enforceable, many of the terms negotiated will relate to pay, conditions, holidays, pensions and so on. These terms will be incorporated into an employee's contract of employment (whether or not the employee is a union member); and the contract of employment is, of course, enforceable. If the new terms are unacceptable to any individuals, they can object to his employer; but if the majority of workers have acquiesced, the company will be able to sack the complainants, normally with impunity. The British law reflects the historic adversarial nature of UK industrial relations. Also, there is a background fear by employees that if their trade union sued for breach of a collective agreement, the union could become bankrupt, leaving employees without representation in collective bargaining. This unfortunate situation may be slowly changing, partly through EU influences. Japanese and Chinese firms that have UK factories (particularly in the motor industry) try to imbue their workers with the company ethic. This approach has been adopted by indigenous UK firms such as

Tesco Tesco plc () is a British multinational groceries and general merchandise retailer headquartered in Welwyn Garden City, England. In 2011 it was the third-largest retailer in the world measured by gross revenues and the ninth-largest in th ...

United States

The United States recognizes collective bargaining agreements.

References