To understand the collective bargaining it is necessary to know about the various advantages of collective bargaining,

these are: 

• Collective bargaining has the advantage of settlement through dialogue and consensus rather than through conflict and confrontation. Agreement resulting from collective bargaining usually represents the choice or compromise of the parties themselves. 
• Collective bargaining agreements often institutionalize settlement through dialogue. For instance, a collective agreement may provide for methods by which disputes between the parties will be settled. In that event parties know beforehand that if they are in disagreement there is an agreed method by which such disagreement may be resolved. 
• Collective bargaining is a form of participation because it involves a sharing of rule making power between rule making power between employers and unions in the areas which in earlier times were regarded as management prerogative e.g. transfer, promotion, redundancy.
•  Collective bargaining agreements sometimes renounce or limit the settlement of disputes through trade union action. 
• Collective bargaining is an essential feature in the concept of social partnership towards which labor relations should strive. Social partnership in this context may be described as a partnership between organized employer institutions and organized labor institutions designed to maintain non- confrontational process in the settlement of disputes which may arise between employers and employees. 
• Collective bargaining has a valuable by- products relevant to the relationship between the two parties. 
• In societies where there is a multiplicity of unions and shifting union loyalties, collective bargaining a consequent agreements tend to stabilize union membership. 
• Collective bargaining is the most important and effective in improving industrial relations.