Society For Human Resource Management (SHRM) Certified Professional Practice Exam

What is an essential feature of a collective bargaining agreement?

1. A. Automatic renewal every year

2. B. Duration of the contract

3. C. Exclusion of management rights

4. D. Mandatory arbitration clauses

The correct answer is: B. Duration of the contract

An essential feature of a collective bargaining agreement is its duration, which specifies the timeframe during which the contract is effective. This duration outlines not only when the terms of the agreement apply but also establishes a clear schedule for negotiations in the future, helping both parties plan and manage their obligations. Including a defined duration is critical in collective bargaining as it provides stability for the employees represented by the union and allows the employer to understand the period of contractual commitments. After the expiration of the contract, both parties can engage in negotiations to either renew, amend, or replace the agreement, thus ensuring that labor relations remain active and up-to-date with current conditions or needs. While features like automatic renewal, exclusion of management rights, or mandatory arbitration may be present in some collective bargaining agreements, they are not universally essential elements. The defined duration is a standard and necessary characteristic that fundamentally shapes labor relations and agreements, making it a core aspect of any collective bargaining process.