Collective bargaining is specifically an industrial relations mechanism or tool, and is an aspect of negotiation, applicable to employment relationship. As a process, the two are in essence the same, and the principle applicable to negotiations is relevant to collective bargaining as well. In collective bargaining the union always has a collective interest since the negotiations are for the benefit of several employees. Where collective bargaining is not for one employer but for several, collective interests become a feature for both parties to the bargaining process. In collective bargaining certain essential conditions need to be satisfied, such as the existence of freedom of association and a labor law system. Further, since the beneficiaries of collective bargaining are in daily contact with each other, negotiations take place in the background of a continuing relationship which ultimately motivates the parties to resolve the specific issues.

Collective bargaining is a process of negotiations between employers and the representatives of a unit of employees aimed at reaching agreements that regulate working conditions. Collective agreement usually set out wage scales, working hours, training, health and safety, overtime, grievances, mechanisms and rights to participate in workplace or company affairs. Ultimately the term “bargaining” implies that the process is one of haggling, which is more appropriate to one- time relationships such as a onetime purchaser or a claimant to damages. While collective bargaining may take the form of haggling, ideally it should involve adjusting the respective positions of the parties in a way that is satisfactory to all.