Enforceability and Effect of a Collective Agreement

Enforceability & Effect of a Collective Agreement


A collective agreement is one made between an employer (or an association of employers) and a trade union or trade union(s). A collective agreement is assumed to be voluntary (i.e. not legally binding) unless it is in writing and contains a statement that the parties intend it to be of legal effect.

Collective agreements may be implied or expressly incorporated into individual employment contracts. Those that are expressly incorporated will normally take place by way of a reference to the collective agreement in the employment contract.

The employment contract should also state that terms in the individual employment contract may change in the event of a variation to a collective agreement.

The new employee must have a reasonable opportunity to read the collective agreement.

These principles apply whether or not the employee is a trade union member.

The agreement will be incorporated by implied means deriving from custom and practice in the industry.

If a collective agreement contains a no-strike clause (which restricts or prohibits industrial action), this will likewise not be considered binding on individual employees unless it is in writing,contains a statement that those terms are incorporated in such a contract, it is incorporated expressly or implied in the individual's employment contract and if it is readily accessible in the workplace.

Collective agreements which are legally binding are automatically transferred to the transferee on the transfer of an undertaking.

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