Chapter 13: Working with Labour Unions

13.2 Collective Bargaining

Learning Objectives

By the end of this section, you will be able to:

  1. Be able to describe the process of collective bargaining.
  2. Understand the types of bargaining issues and the rights of management.
  3. Discuss some strategies when working with unions.

When employees of an organization vote to unionize, the process for collective bargaining begins. Collective bargaining is the process of negotiations between the company and representatives of the union. The goal is for management and the union to reach a contract agreement, which is put into place for a specified period of time. Once this time is up, a new contract is negotiated. In this section, we will discuss the components of the collective bargaining agreement.

Collective Agreement: A contract negotiated between the employer and union, identifying the terms and conditions of employment. Contracts are negotiated for a finite term and must be re-negotiated when they expire.

The Process of Collective Bargaining

In any bargaining agreement, certain management rights are not negotiable, including the right to manage and operate the business, hire, promote, or discharge employees. However, in the negotiated agreement there may be a process outlined by the union for how these processes should work. Management rights also include the ability of the organization to direct the work of the employees and to establish operational policies. As an HR professional sits at the bargaining table, it is important to be strategic in the process and tie the strategic plan with the concessions the organization is willing to make and the concessions the organization will not make.

Another important point in the collective bargaining process is the aspect of union security. Obviously, it is in the union’s best interest to collect dues from members and recruit as many new members as possible. A union shop requires a person to join the union within a certain time period of joining the organization. A closed shop means that a person must be a union member to be hired.

In a collective bargaining process, both parties are legally bound to bargain in good faith. This means they have a mutual obligation to participate actively in the deliberations and indicate a desire to find a basis for agreement.

Examples of Bargaining Topics

  • Pay rate and structure
  • Health benefits
  • Incentive programs
  • Job classification
  • Performance assessment procedure
  • Vacation time and sick leave
  • Health plans
  • Layoff procedures
  • Seniority
  • Training process
  • Severance pay
  • Tools provided to employees
  • Process for new applicants
Figure 13.7 Steps in Collective Bargaining

The collective bargaining process has five main steps; we will discuss each of these steps next. The first step is the preparation of both parties. The negotiation team should consist of individuals with knowledge of the organization and the skills to be an effective negotiator. An understanding of the working conditions and dissatisfaction with working conditions is an important part of this preparation step. Establishing objectives for the negotiation and reviewing the old contract are key components to this step. The management team should also prepare and anticipate union demands, to better prepare for compromises.

The second step of the process involves both parties agreeing on how the time lines will be set for the negotiations. In addition, setting ground rules for how the negotiation will occur is an important step, as it lays the foundation for the work to come.

In the third step, each party comes to the table with proposals. It will likely involve initial opening statements and options that exist to resolve any situations that exist. The key to a successful proposal is to come to the table with a “let’s make this work” attitude. An initial discussion is had and then each party generally goes back to determine which requests it can honor and which it can’t. At this point, another meeting is generally set up to continue further discussion.

Once the group comes to an agreement or settlement (which may take many months and proposals), a new contract is written and the union members vote on whether to accept the agreement. If the union doesn’t agree, then the process begins all over again.

Ramifications of a Bargaining Impasse

When the two parties are unable to reach consensus on the collective bargaining agreement, this is called a bargaining impasse. In BC, it is illegal for a union to go on strike while a collective agreement remains in force. If it expires before a new agreement is negotiated, the union is in a “strike position” and can ask members to vote on whether they could or should go on strike. This is called a strike mandate, and is often used to attempt to apply pressure on the employer. It should be noted that before a company can go on strike, they must provide the employer with a 72 hour strike notice. A lockout is a work stoppage that is initiated by the employer. The goal of a lockout, which prevents workers from working, is to put pressure on the union to accept the contract. A lockout can only be legally conducted when the existing collective bargaining agreement has expired and there is truly an impasse in contract negotiations. In summer 2011, the National Basketball Association locked out players when the collective bargaining agreement expired, jeopardizing the 2011–12 season [5] while putting pressure on the players to accept the agreement. Similarly, the goal of a strike is to put pressure on the organization to accept the proposed contract. Some organizations will impose a lockout if workers engage in slowdowns, an intentional reduction in productivity. Some unions will engage in a slowdown instead of a strike, because the workers still earn pay, while in a strike they do not. Some unions will engage in rotating strikes, where employees in a certain location will go on strike for a set period of time, then return to work and another work unit will go on strike. This can minimize the financial cost of a strike to workers, while still being disruptive to the employer. In 2011, Canada Post responded to a series of rotating strikes by initiating a lockout, in order to pressure the union to come back to the bargaining table. Sympathy strikes are work stoppages by other unions designed to show support for the union on strike. Sympathy strikes are prohibited by the Canada Labour Code, however provincially they may be permitted as a form of political protest.

Human Resource Recall

How would you feel about going on strike? What kinds of situations may cause you to do so?

Working with Labour Unions

First and foremost, when working with labour unions, a clear understanding of the contract is imperative for all HR professionals and managers. The contract (also called the collective bargaining agreement) is the guiding document for all decisions relating to employees. All HR professionals and managers should have intimate knowledge of the document and be aware of the components of the contract that can affect dealings with employees. The agreement outlines all requirements of managers and usually outlines how discipline, promotion, and transfers will work.

Because as managers and HR professionals we will be working with members of the union on a daily basis, a positive relationship can not only assist the day-to-day operations but also create an easier bargaining process. Solicitation of input from the union before decisions are made can be one step to creating this positive relationship. Transparent communication is another way to achieve this goal.

In HR, one of the major aspects of working with Labour unions is management of the union contract. We discuss the grievance process in Section 13.3 “Administration of the Collective Bargaining Agreement”.

How Would You Handle This?

Union Busting

The employees in your organization are unhappy with several aspects of their job, including pay. You have tried to solve this issue by creating new compensation plans, but with no avail. You hear talk of unionizing. When you bring this issue to your CEO, she vehemently opposes unions and tells you to let the employees know that if they choose to unionize, they will all lose their jobs. Knowing the CEO’s threat is illegal, and knowing you may lose your job if the workers decide to unionize, how would you handle this?

Key Takeaways

  • In a UNION SHOP, people must join the union within a specified time period after joining the organization.
  • A CLOSED SHOP allows only union members to apply and be hired for a job.
  • COLLECTIVE BARGAINING is the process of negotiating the contract with union representatives. Collective bargaining, to be legal, must always be done in good faith.
  • The collective bargaining process can take time. Both parties prepare for the process by gathering information and reviewing the old contract. They then set time lines for the bargaining and reveal their wants and negotiate those wants. A BARGAINING IMPASSE occurs when members cannot come to an agreement.
  • When a bargaining impasse occurs, a STRIKE or LOCKOUT of workers can occur.
  • Some tips for working with unions include knowing and following the contract, involving unions in company decisions, and communicating with transparency.


1: Research negotiation techniques, then list and describe the options. Which do you think would work best when negotiating with unions?

2: Of the list of bargaining issues, which would be most important to you and why?

[1] “Best Workforces Are in Right to Work States,” Redstate, June 30, 2011, accessed August 14, 2011,

[2] “Right to Work for Less,” AFL-CIO, accessed August 14, 2011,

[3] Dan Goldberg, “Verizon Strike Could Last Months,” New Jersey News, August 7, 2011, accessed August 15, 2011,

[4] Dan Goldberg, “Verizon Strike Could Last Months,” New Jersey News, August 7, 2011, accessed August 15, 2011,

[5] Steve Kyler, “Division among Owners?” HoopsWorld, August 8, 2011, accessed August 15, 2011,


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Introduction to Human Resource Management - First Canadian Edition Copyright © 2017 by Zelda Craig and College of New Caledonia is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.

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