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Bargaining Unit

Updated on April 14, 2024
Article byAswathi Jayachandran
Edited byAswathi Jayachandran
Reviewed byDheeraj Vaidya, CFA, FRM

Bargaining Unit Definition

A bargaining unit refers to a group of employees with similar interests being represented by a labor union. A business organization or an entity may have more than one such unit aiming to secure employees’ interests. These units are made up of workers who have similar job requirements, interests, and terms and conditions of employment.

Bargaining Unit

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A small unit may have less power but can present a cohesive front during negotiations. Conversely, a large unit may experience conflicts of interest but could leverage the threat of a strike effectively in discussions concerning benefit reduction. In firms with fewer than 100 employees, all eligible workers are organized into one unit.  

Key Takeaways

  • A bargaining unit comprises workers who are collectively represented by a labor union during negotiations. Factors like organizational structure, skill requirements, working environment, and job tasks shape it. 
  • The unit increases employee collective bargaining power for terms of employment, including benefits, working conditions, pay, and job security. 
  • The National Labor Relations Board (NLRB) determines if a private-sector union shares enough interests to be recognized by federal law.
  • A non-bargaining unit is an individual or group not represented by a labor union. They are unable to bargain over employment matters collectively and allow individual negotiation of salary and benefits.

Bargaining Unit Explained

A bargaining unit is a group of workers represented by a labor union that negotiates with the management on behalf of the employees and workers. Factors like organizational structure, working environment, skill requirements, and job tasks influence it. Labor relations bodies, such as the National Labor Relations Board (NLRB), recognize these units. 

The presence of a collective bargaining unit where an association represents and works for the welfare of people who devote the majority of their day to performing their duties and responsibilities for the employers secures the interests of the workers and staff members, thereby helping them have a safe and sound workplace. 

The bargaining power increases when negotiating collectively for terms of employment, including pay, benefits, working conditions, and job security. The union representing employees’ collective voice fights for their rights and promotes their interests.

Legal obligations and protections bind these units. Employers must engage in sincere negotiations with the union representing their workforce, but they must not participate in unfair labor practices, including preventing workers from supporting or joining a union, mistreating union members, or taking adverse action against workers who assert their rights.

It is crucial to consider whether all job titles are part of a community of interest when deciding which positions to include in a unit. The NLRB determines whether a private-sector union shares sufficient interests to be recognized by federal law. 

Some of the factors taken into account include the group’s relationship with the employer, comparable work kinds, contracts, shared supervisors, comparable settings, existing pay and benefits, previous experience with collective bargaining, and unit size and structure. NLRB makes the final decision on who is covered by a unit and how it is structured.

Examples

Let us look into a few examples to understand how people in bargaining unit positions work:

Example #1

Suppose Danny, a technician at a manufacturing company, and his colleagues face challenges like long working hours, safety concerns, and inadequate equipment. In response, Danny and his associates form a bargaining unit. They approach a labor union specializing in representing technicians in the manufacturing industry. The union negotiates with the company’s management on their behalf, gathering feedback and input from the technicians. They develop proposals to address issues such as better working conditions, fair compensation, enhanced safety measures, and training opportunities.

The negotiations span several rounds, with the union’s representatives supporting the technicians’ interests. They present the employees’ proposals to the management team. Eventually, a collective bargaining agreement (CBA) is formed that outlines the terms and conditions of employment for the technicians. It includes provisions for improved working hours, safety measures, fair compensation, and career development opportunities. This successful negotiation results in positive changes in working conditions.

Example #2

According to reports, on October 30, 2023, automaker General Motors (GM) and United Auto Workers, the umbrella organization for industry workers nationwide, reached a tentative agreement to terminate the six-week-long strike. GM agreed to give its workers a 25% increase in hourly compensation as part of the agreement. 

Additionally, the business guaranteed cost of living benefits to employees with more-than-four-year contracts. Moreover, it also committed to paying out five $500 payments to retirees and their surviving spouses. The contract also gave employees the ability to walk out in protest of plant closures, giving them more negotiating leverage in future talks.

Bargaining Unit vs Non-Bargaining Unit 

The differences between both the concepts are as follows:

PointsBargaining UnitNon-Bargaining Unit 
ConceptSuch a unit comprises employees who share common job characteristics.  It refers to individual employees or groups not represented by a labor union.
RepresentationThe bargaining unit employees are represented by a labor union and recognized by the National Labor Relations Board (NLRB).  Employees in this category lack union representation and are unable to engage in protected concerted activity. This prevents them from bargaining collectively over employment matters.  
NegotiationEmployees can negotiate deals collectively only.  Workers have the freedom to negotiate individual agreements with their employer regarding aspects such as salary and benefits.  

Frequently Asked Questions (FAQs)

Can employees choose not to join the bargaining unit?

Employees cannot individually decide to participate in the unit. The negotiations between the union and the employer leads to joining the union. Known as a closed shop, unions typically want every member of the unit to enlist. However, it requires permission from the union for an open shop where workers could elect to become union members.

How do you find the bargaining unit number?

The numbers or codes, along with names, are available on the official website of the Office of Personnel Management’s Federal Labor-Management Information System (FLIS). These details reveal the unit’s position within the company.

What are bargaining unit status codes?

The Office of Personnel Management (OPM) assigns Bargaining Unit Status (BUS) designations to identify agency components and associated labor groups. The first two letters indicate the agency, while the final four numbers denote the labor unit, revealing the unit’s position.

What are the four types of bargaining units?

Four widely accepted categories include:

1. Distributive or conjunctive bargaining
2. Cooperative or integrative bargaining
3. Composite bargaining
4. Productivity bargaining

This article has been a guide to the Bargaining Unit and its definition. Here, we explain its examples along with differences with non-bargaining units. You may also find some useful articles here –

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