Binding agreements: Collective Bargaining

ACT was jointly established by global companies and trade unions, founded on the recognition that lasting improvement of wages and working conditions are best achieved through collective bargaining supported by brand purchasing practices.

While collective bargaining structures vary across the world, they all rely on negotiations between the social partners – employers’ and workers’ representatives. These negotiations can take place at the industry, sub-industry, enterprise, regional, or national level, depending on national circumstances, industry dynamics, and existing labour laws. Collective bargaining frameworks may be based on mandatory or voluntary membership in professional representative organisations, established bargaining patterns, or government-supported legal extension mechanisms.

Fundamentally, collective bargaining enables employers and workers, through their representative organisations, to define priorities and negotiate solutions for the industry or enterprise. Guided by their knowledge of the industry’s economic situation and workers’ needs, the parties reach agreements that balance diverse interests and expectations. Negotiations can cover any issue the parties wish to include in an agreement, provided the final agreed terms comply with national law and, if applicable, exceed national standards. This can encompass a range of provisions, including dispute resolution and monitoring. 

Collective bargaining improves labour relations, prevents disputes, fosters workforce stability, boosts productivity, and sets clear, standardised terms for both parties. By negotiating binding provisions for employers and workers in factories, the social partners can ensure an equitable, innovative, and productive sector that maintains its competitiveness and strengthens its development.