What is a Collective Employment Agreement in England and Wales?

Your employees may belong to a trade union. A trade union is in place to help improve your employees’ conditions of employment. It consists of a group of employees and is usually independent of your business. Employers may, in some instances, engage with trade unions concerning the terms and conditions of their employees. This will occur where a collective employment agreement is in place. Where one is not, you generally cannot negotiate your employees’ terms with their union. This is a particularly complicated area of law. To help, this article will explain what are collective employment agreements, what terms it may cover, what else it may contain, as well as whether you need to have one and when.

What is a Collective Employment Agreement?

A collective employment agreement is where you as an employer have an agreement to allow for the negotiation of terms and conditions of your employee’s contract. This agreement is between you or an employers’ association with those who represent your employees, such as trade unions or staff associations. The representatives will try to achieve the best position for your employees.

This agreement is not usually legally binding between you or the employer’s association and those representing your employees, such as a union. However, where it is in writing and stated that it is legally binding, it will be. Also, if you incorporate the collective employment agreement into your employee’s contracts, it may be binding between you or your employer’s association and your employees.

You can do this by either:

• putting the agreement in their employment contract; or
• stating in the employment contract that a collective employment agreement is in place, indicating how to find this.

What Might a Collective Employment Agreement Contain?

This agreement covers the terms and conditions of employment and work that you want to cover. For example, you may wish to include any of the following:

• how you may hire your employees and how you may sack them;
• how you will distribute work;
• methods of disciplining employees;
• union membership; 
• facilities for trade union officials to use; and 
• union recognition.

Likewise, it might also include the:

• way you wish to organise negotiations;
• person or organisation who will represent your employee;
• names of the employees which the agreement relates to; and
• terms and conditions covered by the agreement.

Is This Agreement a Legal Requirement?

There are instances where you must have a collective employment agreement in place. These could be where:

• a specific number of employees want their union to be recognised; or
• the Central Arbitration Committee states that you must recognise the union.

In these instances, such an agreement would allow you to then discuss your employee’s terms and conditions with their union. This is called collective bargaining. 

Additionally, you may find that as an employer, your business is affected by national collective bargaining agreements. These can be in place to cover all employees nationally in a specific sector.

Whilst you do not always need to have this agreement in place, there are advantages to an employer for having one. For example, it means that you do not need to negotiate with a number of employees but instead with one body. 

Whilst you may not have a collective employment agreement in place through your employee’s contract, you may still be able to agree on any changes to your employee’s contract with their trade union. This is where the terms of your employee’s employment contract implies a collective employment agreement because you normally negotiate with the union or representative. 

Further, when you make changes to your employee’s terms and conditions with their union or representative, and you do not have a collective employment agreement in place, these changes are not lawful.

Key Takeaways

Employers need to be aware of whether or not they have, or even need to have, a collective employment agreement with their employees’ trade union or other representatives. This will influence whether or not you negotiate the terms and conditions of your employees’ employment with them or with their union. Additionally, you can incorporate this agreement into your employees’ contracts or include implied terms where you normally negotiate with the trade unions on certain terms. 

If you need help with understanding collective employment agreements in England and Wales, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. So call us today on 0808 196 8584 or visit our membership page.

Frequently Asked Questions