Employment Contract Collective Terms

Collective Terms and the Employment Contract


If all or some of your workforce are represented by a recognised independent trade union, their employment will be subject to certain collective agreements. A collective agreement is one made between an employer or employer's association and such a trade union and may cover or refer to terms in employment contracts with individual employees. However, a collective agreement will only bind the individual employer and employee if it is in writing, expressed to be legally enforceable and is expressly, or as a matter of practice, incorporated into the individual employment contract.

Some employers have sought to offer employees inducements to move away from collective agreements and agree to personal contracts. They then refuse pay rises to those who fail to agree. This practice has been held to be legally permissible (provided that such pay increases are not a term of the collective agreement), but specialist advice should be taken.

If your business is unionised, you will probably be well aware of the legal implications in this area. If it is about to become unionised, advice should be taken on the significance of collective agreements on your existing employment documentation.

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