Advantages and Disadvantages of Collective Bargaining

Collective bargaining has been around for a long time. Ever since industrialization, trade unions or labor unions, associations of employees and similar bodies have existed to pave the way for a better workplace where the interests of the employees, the employers and the quality of work done can all be attended to. From attending to the needs of the workplace to ensuring quality of the work done, from protecting the financial and other interests of the laborers to establishing communication between management and large groups of people, collective bargaining has played a significant role in the evolution of industries.

There are many advantages and disadvantages of collective bargaining. Here are a few of the most common pros and cons.


1. The biggest advantage of collective bargaining is that the management and the laborers are brought to the same platform where both parties can engage in discussions to solve problems, to address issues and both enjoying an equal footing can have a collective goal for mutual rewards.

2. Collective bargaining is a legally sound platform or mode of communication. It establishes workable bilateral relationship between the staff and the management. All the rights, that of the management and that of the laborers, are clearly stated and everyone knows their roles, duties, rights and limitations.

3. Collective bargaining allows for the protection of everyone’s rights and welfare. It is not heavily tilted either towards the management or the employees.

4. Collective bargaining allows management or the owners of a company to have predictability in their expenses or budgets such as controlling salaries and compensations in a preplanned manner. It ensures stability in the company finances.

5. Collective bargaining empowers the laborers and a healthy relationship is developed across all departments and hierarchal levels of an organization.


1. Collective bargaining stunts the free hand that managements usually like to possess. The authority and liberty of the owners or senior management would be limited and may be curtailed if the trade unions are far too influential and strong or consequential.

2. While collective bargaining was developed to bridge the communication gap between the employers and employees, they can easily create further rifts instead of bridging the gap. Vested interests of elected representatives or sabotage by competitive organizations and rivals can ruin the foundation of a company through collective bargaining.

3. Collective bargaining is time consuming, it slows down the decision making process and makes it all the more complicated since there is no authoritarianism. Instead, there is increased bureaucratization.