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Collective Agreement

Published May 16, 2017 (last updated on May 16, 2024) | Adam Wyatt - Copywriter and Content Creator

A new employee signing and employment agreement.

If more than two employees in your workplace are covered by a registered union, it is likely your employees will be covered by a collective agreement. A collective employment agreement is the formal employment agreement ratified and signed after a process of collective bargaining. Collective employment agreements cover similar points to individual agreements, but the terms are agreed between an employer and a union representing the group of employees. The group of employees will have the same agreement, usually with a pay scale for different jobs or different levels within jobs.

Who is covered by a collective employment agreement?

Collective agreements must cover at least two employees and is between at least one employer and one registered union. A collective employment agreement can cover permanent, full-time, part-time, fixed-term and casual employees, but it does not necessarily cover all the employees in your workplace.

Often, a collective agreement will have a clause outlining exactly which type of employee and the type of jobs covered. This agreement can extend to be joined by extra unions and employers, but only if the agreement stipulates this can happen.

Are non-union employees covered by a collective agreement?

No, while non-union members may bargain as a collective group with an employer, their negotiations cannot end in a ratified collective employment agreement rather, it is considered as an individual agreement. This is a slightly different agreement that may be subject to different rules. So, while non-union members can negotiate in a group with an employer, because they are not union members, it is not considered a collective agreement


Collective agreements must follow some simple guidelines. These guidelines are:

• be in writing
• be signed by employers and unions that are parties to the agreement
• include a coverage clause stating what work is covered by the agreement, including those on a casual employment contract
• have a plain language explanation of how to resolve potential disputes between employers and employees, including the 90 day trial period for a personal grievance
• outline how the agreement can be changed, usually done by including a clause
• indicate an expiry date or an event when the agreement will cease
• include a provision compliant with the Holidays Act 2003 requirement for employees to be paid at least time and a half for work on public holidays
• provide an explanation of how employees will be protected if the business is sold, transferred or contracted out

After the agreement is finalised it must be provided to employees, and employers must provide new employees a copy if they are covered by the agreement as outlined in the coverage clause.

The involvement of unions, and the strict guidelines can make the process of developing collective employment agreements difficult to navigate. For advice and support call Employsure  on 0800 568 012.

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