Collective agreement simply explained: What is a collective agreement and why is it important?

Collective agreement simply explained: What is a collective agreement and why is it important?

Collective agreement simply explained: What is a collective agreement and why is it important?

A collective agreement is a written agreement between a trade union or a trade union association and an employers' association or an employers' organization. In this article we will explain what a collective agreement actually is, what issues it regulates, what advantages it offers for employees and employers and why it is important for both sides.

What is a collective agreement?

A collective agreement is a binding contract that specifies the working conditions, working hours, wages, salaries and other labor regulations for a specific industry or sector of the economy. It is negotiated between the collective bargaining parties, i.e. the unions and the employers' associations. The collective agreement applies to all companies and employees who are members of the collective bargaining parties.

A collective agreement can apply to a single industry or to multiple industries. As a rule, a collective agreement has a certain term, usually a few years, and must be renegotiated after the agreement period has expired.

Topics that are regulated by a collective agreement

A collective agreement can regulate a variety of topics. The most important points are:

Wages and salaries

A collective agreement sets the minimum wages and salaries for certain jobs. It also regulates wage and salary developments over the term of the collective agreement.

Working hours

A collective agreement can specify daily and weekly working hours, regulations for overtime work, night work, weekend work and holiday work, as well as vacation regulations.

Social benefits

A collective agreement can regulate social benefits such as health insurance, pension insurance, accident insurance and additional insurance.

Protection against dismissal

A collective agreement can contain provisions on protection against dismissal and the notice period.

Initial and continuing education

A collective agreement can contain regulations for the training and further education of employees and provide for their support by the employer.

Working conditions

A collective agreement can set out regulations on working conditions such as workplace design, occupational health and safety, work clothing and hygiene regulations.

Advantages of a collective agreement for employees

A collective agreement offers employees a variety of benefits:

Security

A collective agreement gives employees security regarding their working conditions, wages and benefits. They know that they are guaranteed certain minimum standards.

Fair pay

A collective agreement sets minimum wages and salaries. This ensures fair pay for employees.

Working time protection

A collective agreement regulates working hours and protects employees from excessive weekly working hours, night work, weekend work and holiday work.

Social benefits

A collective agreement can specify additional social benefits that benefit employees, such as company pension schemes, health insurance and other additional benefits.

Co-determination

A collective agreement can also contain regulations for employee participation in certain issues of work organization or business management.

Advantages of a collective agreement for employers

Collective agreements also offer some advantages for employers:

Legal certainty

A collective agreement offers employers legal certainty because it contains clear regulations on working conditions, working hours, wages and social benefits.

Competitive advantage

An employer who adheres to a collective agreement can position itself as a responsible and fair employer and thereby gain a competitive advantage.

Smooth working relationships

A collective agreement helps avoid disputes and conflicts between employers and employees. This allows working relationships to run harmoniously and smoothly.

Retention of skilled workers

A collective agreement that offers attractive wages and social benefits can help attract qualified specialists and retain them in the company in the long term.

Why is a collective agreement important?

A collective agreement is important because it creates a fair and binding basis for working conditions for employees and employers alike. It has a positive effect on the working atmosphere, promotes a good employer-employee relationship and creates trust and security for both sides.

A collective agreement sets a minimum standard of wages and working conditions that goes beyond legal provisions. This increases the social security of employees and ensures appropriate pay.

A collective agreement also enables collective representation of employee interests by unions. This means that working conditions and wages can be negotiated together with employers in order to achieve the best possible result for everyone involved.

Frequently Asked Questions (FAQ)

What happens if an employer does not have a collective agreement?

If an employer does not have a collective agreement, the statutory minimum standards for working conditions, wages and social benefits apply. However, there is no binding set of rules that regulates the working relationship between employee and employer. Without a collective agreement, working conditions can be negotiated individually on the basis of employment contracts.

Can employers deviate from a collective agreement?

An employer cannot unilaterally deviate from a collective agreement. A collective agreement is binding for all members of the collective bargaining parties, i.e. the unions and employers' associations. If an employer wishes to deviate from a collective agreement, it must do so through negotiations with the union.

How long is a collective agreement valid?

The period of validity of a collective agreement is negotiated between the collective bargaining parties. As a rule, a collective agreement has a term of several years. After the agreement period has expired, the collective bargaining parties must negotiate a new collective agreement.

Is there a collective agreement for all sectors?

There are collective agreements for many different industries and sectors of the economy. However, there are also sectors in which there is no collective agreement. In some cases there are also declarations of general application through which a collective agreement becomes binding for all companies in an industry, regardless of whether they are members of the employers' association or not.

Conclusion

A collective agreement is a written agreement between trade unions and employers' associations that sets out the working conditions, working hours, wages and other labor regulations for a specific industry or sector of the economy. It offers various advantages to both employees and employers and is important for creating fair and binding working conditions.

A collective agreement increases the security and social security of employees, promotes a good working relationship between employees and employers and creates legal certainty. It also enables collective representation of employee interests through trade unions and promotes fair pay for employees.

Employers can benefit from a collective bargaining agreement because it provides a competitive advantage and promotes smooth labor relations. For employees, a collective agreement offers security, fair pay and various social benefits.

Ultimately, a collective agreement is an important part of labor law and contributes to the stability and fairness of labor relations.