What is a Collectively Bargained Plan?

Collectively bargained plans are agreements that are reached between employees and a group of employers. Typically, the process of collective bargaining is conducted through authorized representatives of the employees who interact with representatives of the employers. The collectively bargained plan often will relate to matters that are of common concern to both employees and employers, such as retirement plans, safety conditions and other benefits that are provided for the employee force.

Unions are often the mechanism that allows for the creation of a collectively bargained plan. A union will represent the interests of the member employees, and will engage the employers to establish what is considered an equitable package of benefits in exchange for labor services of the employees. The union will engage in negotiations with the employers to come to terms on the specifics of the plan. From time to time, the particulars of an existing collectively bargained plan will be reviewed and amended to allow for changes in the economy and other factors.

In many instances, it is possible for employees and employers to arrive at a collectively bargained plan without any interruption in the labor provided by the employee force. From time to time, negotiations for amendments or enhancements to an existing plan become difficult. When this takes place, the union may choose to call for a strike. Essentially, a strike means that the employees do not report to work until the union informs members that a new collectively bargained plan has been agreed upon with employers. During the strike, the union may supply the employees with limited benefits, depending on the structure of the union.

In the best of circumstances, a collectively bargained plan will create a balance between the desires of the employees and the ability and willingness of the employers to address those desires. A typical plan will usually address such factors as salary and wages associated with specific jobs and positions, the process for accruing vacation and sick days, retirement plan options, healthcare options, and other benefits that may be relevant to the industry involved.