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3 Things HR Should Know About Collective Bargaining

Everything HR professionals need to understand about the basics of collective bargaining

Jennifer Kiesewetter

by Jennifer Kiesewetter - February 17th, 2023


In 2022, 16 million workers were represented by a union, according to the U.S. Bureau of Labor Statistics. Public-sector workers enjoy a union membership rate of 33.1 percent, which is 5 times higher than those working in the private sector (6 percent). Additionally, protective services occupations have the highest union membership rates, followed closely by education, training, and library occupations.

This is interesting, especially in a post-Covid workplace where workers demand fair pay, benefits, and other employment rights (we’re looking at you, Amazon, and Starbucks). But why is this important to HR professionals?

Having employees that belong to a union (or want to belong to a union) often has great implications and responsibilities for HR professionals. So, understanding the basics of collective bargaining is critical for human resources teams. Read our HR Compliance Guide to learn more.

1. What Is Collective Bargaining?

Before HR professionals can understand their critical role in labor relations, they first must understand the basics of collective bargaining, such as: what is it?

According to the AFL-CIO, collective bargaining is “the process in which working people, through their unions, negotiate contracts with their employers to determine their terms of employment, including pay, benefits, hours, leave, job health and safety policies, ways to balance work and family, and more.”

Collective bargaining rights initially emerged from the Railway Labor Act, granting collective bargaining rights to railroad workers in the mid-1920s and later expanding to all transportation workers. In 1935, the National Labor Relations Act (NLRA) was passed, “making clear that it is the policy of the United States to encourage collective bargaining by protecting workers’ full freedom of association.”

Further, the NLRA “protects workplace democracy by providing employees at private-sector workplaces the fundamental right to seek better working conditions and designation of representation without fear of retaliation.”

2. What Is a Collective Bargaining Agreement?

The collective bargaining agreement (CBA) is the written, legal document that lays out the terms and conditions of employment between the union and the employer.

The CBA is typically a result of weeks (or months) of negotiations between the union and employer about wages, benefits, hours, overtime, and other employment terms and conditions. The contract’s term is usually for a set period of time, often falling between two and five years.

CBAs cover three categories: mandatory, voluntary, and illegal subjects. Mandatory subjects include those required by law, such as wages, overtime, workplace safety, grievance procedures, and layoffs.

Voluntary subjects include issues that may be negotiated but not required by law, such as who can sit on the employer’s board of directors. Illegal subjects are those that would violate the law, such as employment discrimination.

Once finalized, CBAs are binding for both unions and employers, meaning all parties must abide by the agreement.

3. What Is Good Faith Negotiation, and Why Is it Important?

When participating in union negotiations, HR professionals must have significant knowledge about what their employees want and need, as well as the company’s financials, management, and operations to help negotiate fair CBAs.

Of course, understanding the employees’ issues and grievances is the place to start. Understanding the union’s wishes and demands is another critical puzzle piece. Finally, HR professionals must understand where the employer stands – what does the company need and want?

As reported by SHRM, Richard Kreyer, vice president of labor relations at the Minnesota Hospital Association in St. Paul, says, “a common mistake with the HR professional’s hectic schedule is to come unprepared or underprepared. It’s a lot of work to be on a bargaining team and do your regular job. You have to balance the responsibilities and do your homework in advance.”

In addition to understanding what the parties want and need, here are some pro tips to consider:

  • Ensure you have all the correct information. For example, understand your benefits and how much they cost the employees and the company. Are these benefits in line with industry norms? Are they more or less generous? Having the exact offerings and numbers are critical to effective negotiations.

  • Understand what your competitors are doing. For example, in a post-Covid work environment, workplace safety has become paramount. How are your competitors addressing workplace safety in a post-pandemic world? What specifically are they doing to keep their employees safe?

  • Keep abreast of the economic changes – locally, nationally, and globally. Doing so can help HR professionals be better informed when negotiating cost-of-living increases.

Collective bargaining can be a long, drawn-out process. But when engaged in collective bargaining, HR professionals should do what they do best – protect the company’s interests while strengthening their relationship with employees and focusing on their satisfaction.

It’s often a well-informed, honest dance – one that HR teams perform daily. However, getting a little extra help here and there doesn’t hurt. Take a tour of GoCo today, knowing you always have current information at your fingertips.

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