A labor contract or a labor agreement is a binding legal agreement between the employee and the employer. The contract lays out the terms on the rights and both the parties and the responsibilities they need to shoulder.
It also includes how one party can seek remedy if the other party doesn’t comply with the contract terms. A labor contract might be an agreement between an individual employer and an individual employee or a collective agreement agreed upon by a group of employers and a labor union.
What Are The Issues That A Labor Contract Addresses?
Labor contract covers numerous issues. One of the prime provisions discusses the salary that an employee is entitled to. Several contracts talk about the starting pay scale and share the details regarding the increase in living cost and merit over time.
Aside from the payment issues, the contract also lays out the terms regarding the employees’ benefits. This includes sick leave, access to health coverage, the accumulation or increase of vacation time, and retirement benefits. The contract terms will also discuss the minimum number of hours an employee needs to devote in a week to qualify as a full-time employee. That will make them eligible for any retirement plan or insurance coverage that an employer offers.
Agreements Between An Employer And An Employee
A labor contract establishes specific agreements between an employee and an employer. These agreements comprise a commitment to maintaining a proper work environment. It adheres to the regulations laid out by the government in connection to safety issues.
The employer also agrees to abide by the local jurisdictional laws, consisting of the termination procedure and the benefits an employee will receive after the termination. Provisions such as this properly define what both parties need to do. It also helps evaluate how far the employee and the employer have been able to meet the expectations.
The employee union in a company works on behalf of the employees and is a bargaining unit. The list of representatives in this union includes those who represent different departments and ranks within the company.
These unions fight for the employees’ rights and represent them in case of any issue or concern. They reserve the right to be a part of the management meetings, particularly those related to an employee or a whole department and the conditions they are working in.
What’s A Yellow-Dog Contract?
Previously, employees were barred by a labor contract from joining a trade union after they were employed. This labor contract, or yellow-dog contract, is now completely illegal in various parts of the world.
Additionally, any term that could go against the government’s regulations or deprive the employees of their basic rights is null and void. It is a solid ground for penalizing the employer who is looking for a commitment to these provisions.
Management Rights Clause
Amidst collective bargaining, the essence of a labor contract, the management has the right to run the business in light of the general business decisions. These decisions comprise the financial and organizational structure, executive leadership, and employment.
This particular section in a labor agreement is called the management rights clause. This clause happens to be the non-negotiable part of a collective bargaining agreement. The labor unions must also recognize and accept this clause to ensure that the company operates in the best possible way.
When employee issues crop up, a labor union member can get representation either from the labor union leader or a union steward—finding a solution to the workplace issue what you can call a grievance process.
A union member can find representation from a labor union leader or a union steward in case of a workplace issue. The labor contract will talk about the issue resolution under the section grievance redresal process.
These are some of the basic things that you would find in a labor contract. They are all about the understanding between an employee and an employer. However, these labor laws might change from state to state. So, it is always advisable to run the document through your lawyer before signing the dotted line! That will make sure you are on the safe side of the law and do not get into trouble for signing the contract.