16 Advantages and Disadvantages of Collective Bargaining

Collective bargaining is usually part of a unionized workplace, though any employee can request to enter a CBA with their employer. It is a process that is designed to help employees earn better wages, benefits, and working conditions. It is also a process which can help an employer ensure that they get the best workers, consistency with productivity, and a set of standards that every worker can be held to while in the workplace.

The advantages and disadvantages of collective bargaining show that there can be several trade-offs for workers to accept to have such a structure. Here are some of the key points that are worth looking at.

What Are the Advantages of Collective Bargaining?

1. Collective bargaining gives workers a larger voice.
When workers are individuals, then it can be difficult to negotiate with an employer. Many non-union workers are faced with a “take it or leave it” type of offer. If an employee doesn’t take it, then the employer will hire someone who does. Collective bargaining allows workers to band together into larger groups, create a louder voice that can help provide one another with a mutually beneficial outcome.

2. Collective bargaining can improve a worker’s quality of life.
Collective bargaining agreements will usually result in a higher level of pay for a worker. There may also be improvements in the quality and cost of worker benefits. If neither is improved, then there is still the potential to improve the safety and working conditions that are found in the workplace. These can all contribute to workers with a valid CBA enjoying a higher overall quality of life.

3. Collective bargaining creates enforcement consistency.
Non-union workers are often hired in an “at-will” status. Unless there is an issue with discrimination, whistleblowing, or some other legally protected reason, a worker can be fired at the pleasure of the employer. This means there is no real job security in such an arrangement. Not only does collective bargaining provide this security, but it also puts everyone\ on a level playing field. Each worker and the employer is bound by the negotiated contract.

4. Collective bargaining encourages cooperation.
Many jurisdictions require that negotiations on both sides of the aisle be done in good faith. Both sides are compelled to negotiate with one another for the benefit of both. For employees, there is the need to earn a fair paycheck and benefits in an environment that is safe. For employers, there is a need to have consistent productivity and incoming revenues so the organization can remain in business. This need for balance is what encourages cooperation.

5. Collective bargaining creates a binding result.
Both parties are bound to a collective bargaining agreement. It is a legal standard that can be used as part of a legal defense. If one side or the other is not performing to the stipulations that have been set forth in the contract, then they can be held responsible to them by the injured party. This provides an extra level of security for employees and employers so they can defend their positions.

6. Collective bargaining creates relationships.
Many unions bring in members from all over their community to become part of the bargaining team. Employers will often do the same thing. This creates open lines of communication between all offices and parties involved, which can create beneficial community relationships over time. This, in turn, could be used to create political capital, perform philanthropic work, or benefit communities in a variety of other ways.

7. Collective bargaining must represent every member of the unit.
The process of collective bargaining is not exclusionary. Every member of the bargaining unit must be represented during the negotiation process. That means everyone has an opportunity to have their desires heard and represented during the contract creation process. Those ideas might be eventually rejected, but they will still be heard. In some jurisdictions, even non-union workers have the right to be represented by the collective bargaining process as the results can impact their employment as well.

8. Collective bargaining can be changed.
Maybe there was a bad deal that was struck. The good news is that the contract can be eventually changed. It is extremely rare for a CBA to not have an end date. This means a list of wanted changes can be developed over time and then negotiated into a new future contract. Sometimes there may even be a provision to change a CBA within its operational time if both parties agree to do so.

What Are the Disadvantages of Collective Bargaining?

1. Collective bargaining comes at a cost.
There are numerous costs that are often not considered when looking at the process of negotiating a contract. Workers may be involved with the union negotiations, but may be forced to take vacation time to do so. There is the cost of lost productivity as both parties sit down to hammer out a deal. Many CBAs are lengthy and require time to read, which further reduces worker availability. Employer representatives become less productive as well because they are part of this process.

2. Collective bargaining may require a dues payment.
Many unions fund their activities by soliciting dues from their members. Some unions have an annual flat fee for representation, while others may charge up to 2.5% (and sometimes more) of a worker’s salary every paycheck to generate revenues. Changes to a collective bargaining agreement may change the structure of the dues payment. Some workers may be exempt from this payment and still receive representation, but that tends to be an exception more than a standard.

3. Collective bargaining requires governance duties.
Workers who are involved with the negotiating process have governance duties that are performed outside of the regular work duties. This means parents are asked to take time away from their children, spouses and partners spend more time away from one another, and sometimes these duties are unpaid positions. This can cause some people to add speed to the negotiation process, which can result in a poor contract being struck.

4. Collective bargaining may require everyone to be bound by the contract.
Even if you are a non-union worker, you might be bound by the stipulations that are in a contract. Managers and administrators can also be bound by these contracts, even if they are not personally benefitting from their terms and conditions. This can make it difficult for some employees to get their work done. It can also mean that some non-union workers might find their employment in jeopardy at the cost of unionized workers under some contracts, depending on local laws and regulations.

5. Collective bargaining is not always a process of fair representation.
A growing trend in the United States is to force unions to represent non-union and unionized workers equally. This means a union worker must pay dues to receive representation, but a non-union worker receives the same benefits without paying any dues. They can even benefit from the deals that are struck between a union and their employee without be represented at the table. It presents a situation where a minority can consume a majority of the available resources, which creates the possibility of the union eventually imploding.

6. Collective bargaining highlights personal differences.
Unions operate from a group perspective, so it is quite easy for an individual perspective to get lost in the shuffle. Individuals, however, are responsible for the negotiation process that occurs when a collective bargaining deal is being struck. Because there is a shift from group thinking to individualistic representation during this process, there can be differences or even divisions that come up at the table which have never been discussed before. This can lead to feelings of betrayal for those that are present or targeted by those differences or divisions.

7. Collective bargaining can change the workplace environment.
Unionization is a politically-charged topic for many people and has been for some time. Many employers will actively discourage employees from taking steps to unionize. Union members may actively encourage workers to take the steps necessary to join the union. This creates an environment that is more than just uncomfortable. It means that the workplace might be more focused on who is or isn’t a union member than being productive for the employer.

8. Collective bargaining doesn’t guarantee a good deal for either party.
There are plenty of stories about unionized workplaces that highlight poor employee conduct and an employer’s inability to remove problematic workers. There are also stories where a poor CBA from the union side limited worker abilities to fight for better wages or benefits. Without a quality negotiator and an observant supportive backing group, it is possible for one group to create a one-sided agreement that does not balance the needs of all.

The advantages and disadvantages of collective bargaining show that it can be a beneficial practice, but it must be one that all sides are ready to take on. If this process isn’t taken seriously, someone can end up with a very bad deal and that won’t help anyone over a long-term period of time.

Blog Post Author Credentials
Louise Gaille is the author of this post. She received her B.A. in Economics from the University of Washington. In addition to being a seasoned writer, Louise has almost a decade of experience in Banking and Finance. If you have any suggestions on how to make this post better, then go here to contact our team.