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The purpose of collective bargaining between employer’s organisations and organised labour is to conclude legal binding. A collective agreement is a written agreement that concerns the terms and conditions of employment or any matter of mutual interest that is concluded by one or more registered trade unions, and one or more employees, one or more registered employer’s organisation or one or more employers and one or more registered employer’s organisation. (Venter ; Levy, 2014)Collective agreements also has legal effects, collective agreements are where actual parties and their members are bind to the agreement. It is the agreements that relate to employment conditions, or it can be the conduct of employers and employees in relation to one another. It binds the members of trade unions and employer’s organisations that are party to the agreement.

(Venter & Levy, 2014)Agreements also bind employees who are not members of a trade union or trade unions party to the agreement as well as if a trade union is a representative of the majority of employees in the workplace. (Venter & Levy, 2014)Section 23 of the Labour relations act states that a collective agreement will vary any contract of employment where both the employee and the employer concerns are bound by the collective agreement and a contract of employment may not prescribe any terms or conditions that are worse than what is contained in the collective agreement. (Venter & Levy, 2014)

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