Key terms – Managing Employee Relations


Trade union.
An organization that is independent of an employer and funded by member contributions, the function of which is to represent worker interests in relations between workers and employers.

Collective bargaining.
The process of negotiation between trade union representatives and employers, or employer representatives, to establish by agreement the terms and conditions of employment of a group of employees.

Collective agreement.
A written statement defining the arrangements agreed between a union and employer, and the terms that will apply. Such agreements are only legally enforceable if this is expressly stated or if the collective agreement is referred to in individual written terms and conditions of employment.

Psychological contract.
The obligations that an employer and an employee, or group of employees, perceive to exist between each other as part of the employment relationship, comprising both expectations of each other and promises made to each other.

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