A collective agreement is a legal contract between an employer and a union representing the employees that documents agreements made between the parties. Prior to drafting and signing the agreement, company executive employees meet with union workers to discuss certain items such as wages, work hours, and benefits. Through these meetings, the parties are able to compromise to come to an agreement regarding how business policy can be modified to better serve employees. The resulting document that enforces these agreed-upon changes is the collective agreement.
The primary function of the collective agreement is to hold union representatives and company executives to follow through on the promises they make to one another during the bargaining process.
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