Collective bargaining

Collective bargaining is a way for groups of workers and their employers to talk and make agreements about important things like pay, working hours, and job safety. Workers usually have a group called a trade union that speaks for them during these talks. When they reach an agreement, it becomes a labour contract that tells both the workers and the employer what the rules are for working together.

These agreements can cover many topics, such as how much workers are paid, how many hours they work each day, and what to do if there is a problem at work. Sometimes, workers agree to change how they do their jobs in order to get better pay or more job security.

Unions can talk with one company or with many companies in the same industry, depending on where they live. The goal is to make sure that workers have fair treatment and good working conditions through these discussions.

History

The term "collective bargaining" was first used in 1891 by Beatrice Webb, who helped start the study of how work and unions work together in Britain. It describes the discussions and agreements that have happened since unions began in the 1700s.

In the United States, a law from 1935, called the National Labor Relations Act, said that employers could not stop employees from joining unions. Later, in 1962, President John F. Kennedy allowed government workers to join unions too. There were also some debates about whether unions could work in religious schools.

International protection

The right to collectively bargain is recognized in important international agreements. Article 23 of the Universal Declaration of Human Rights says that workers have the right to join trade unions. The International Labour Organization also states that the "freedom of association" and the right to collective bargaining are essential for workers. Several conventions, like the Freedom of Association and Protection of the Right to Organise Convention from 1948, help protect these rights by setting international rules that guide countries.

Empirical findings

Union members and workers covered by collective agreements usually earn a bit more—about 5 to 10 percent more—than workers who are not in unions. Unions also help make income more equal, especially between workers with different skill levels.

Unions can cause a small loss in the overall economy, about 0.2 to 0.5 percent of the total economy's output. This is similar to the effect of monopolies in product markets. Researchers have created models to study and support better collective bargaining using computers.

Internationally

OECD

Only about one-third of workers in countries that are part of the Organization for Economic Co-operation and Development have their pay set through group talks between workers and employers. This group supports group talks to help make sure that when jobs become easier to fill, pay also goes up.

Canada

In 2007, Canada’s highest court talked about why group talks between workers and employers are important. The court said these talks help workers feel respected and in control of their lives because they help set the rules at work. It also helps workers have a say in how things are run where they work.

Sweden

Sweden has many workers whose pay and work rules are set through group talks, even though laws don’t force all employers to join in. In 2018, most workers in private jobs and all workers in public jobs had their rules set this way. This shows how well workers and employers can work together without the government stepping in too much.

Australia

Group talks in Australia started in the early 1900s to help solve arguments between workers and employers. Today, laws make sure that talks happen fairly. These talks let workers and employers decide pay, work hours, and other important rules that fit their specific workplace.

United States

In the United States, laws protect workers who want to talk together about their jobs. These laws stop employers from treating workers badly for joining together or from refusing to talk with worker groups. When most workers choose to work together, they can talk with managers to set pay, hours, and other work rules. If they agree, everyone votes on the plan. If there are problems, like a worker being let go unfairly, they can ask a neutral person to help decide what’s fair.

The American Federation of Labor formed in 1886 to help workers have stronger voices, and laws in later years made sure employers had to talk with worker groups.