A CBA sits between statute and the individual contract. Unions negotiate it with employers or employer associations, and it then governs wages, hours, benefits, and procedures for everyone it covers. In much of Europe and Latin America, CBA coverage is the norm, not the exception.
How Coverage Arises
Coverage does not always require a signature. In France and several other countries, the state extends sectoral CBAs to every employer in the industry, so coverage begins with the first hire. Latin American systems work similarly through the convenio colectivo. Australia reaches a comparable result through modern awards. In the United States, by contrast, a CBA binds only after a workforce unionises and negotiates one.
What CBAs Regulate
Common subjects include minimum pay above the statutory level, mandatory bonuses, working time, extra leave, and enhanced dismissal procedures. Where a CBA applies, the employment contract must meet its terms, not only the law.
CBAs in International Hiring
Before hiring in a new market, check whether a sectoral agreement covers the role. The answer changes the cost and the contract. An Employer of Record identifies the applicable agreement as part of compliant onboarding.