Parties to a Contract

There are at least two parties to a contract. For instance, with an employment contract for one executive the two parties are the employee (executive) and the employer. If a union represents a group of employees, however, the contract is called a collective bargaining agreement (CBA) and the parties are the union and the employer.

Collective bargaining is the process by which a union and employer meet and confer with respect to wages, hours, and other terms and conditions of employment. If the union is a recognized representative of the employees, the employer is required to recognize the union and bargain with the union in good faith. Here is an in-depth video about contracts.

Compare Contracts

Prior to negotiations both parties review the current contract (if there is one) and the contracts of other comparable employers. When reviewing contracts, you are looking at the contract language, wages and benefits for similar positions.

Let us take the example of a collective bargaining agreement (CBA) that is about to expire between a custodial union in Michigan and a public school district. Before negotiations begin the union and the employer would each take time to review these sites:

  1. Michigan School District Union Contracts (CBA)

  2. State of Michigan Employee Union Contracts (CBA)

Steps in Preparation for Negotiations

The steps included in preparations for negotiation are shown below. Click on any of the steps to learn more about each process. 

Both sides should  have basic understanding  of what a single employee  costs the employer under  the proposed CBA  (contract)

Costing out the  CBA 

See what specific  conditions were discussed  and agreed to by similar  organizations during  bargaining. 

Contract  Language  Comparables 

The changes in the cost of  living become an  important bargaining point during negotiations.

Calculating Cost  of Living  

The side side that is better organized will be more prepared for and more effective during discussion.

Dropbox and Organization

Once you have completed your research and drafted  the spreadsheets, you are  ready to begin planning  and creating your first  proposal.

First Formal  Proposal 

Each side must look at  similar contracts financial  proposals and other wage  reports to determine what  would be a fair wage for  their organization.

Financial  Proposals  Comparables 

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