# Collective bargaining agreement (CBA) > A collective bargaining agreement (CBA) is a written contract negotiated between an employer (or employer group) and a trade union, setting the terms and conditions of employment for covered workers. A collective bargaining agreement (CBA) is a legally binding contract negotiated between an employer or group of employers and one or more trade unions on behalf of workers. It sets out the terms and conditions of employment, including pay rates, working hours, holiday entitlement, sick pay and health and safety rules, that apply to everyone covered by it. CBAs operate at different levels: a single company, an industry sector or an entire national economy. In many countries, including France, Germany, Austria and Belgium, sectoral agreements are automatically extended to all employers in that sector, whether or not those employers are union members. This means a CBA can bind your business even if you have never signed it directly. When you hire someone in a country where a CBA applies to their role, its terms set a floor. Your employment contract cannot offer less. Teamed's in-house employment-law team checks which CBAs apply to each hire so the employment terms you put in place meet or exceed those requirements from day one. ## Which countries rely most heavily on CBAs? Countries with high CBA coverage include France, Austria, Belgium and Sweden, where sectoral agreements can cover almost all workers. Coverage varies widely globally, from close to 100% in some European countries to single digits in others, according to the ILO. ## Can a CBA set pay rates above the statutory minimum wage? Yes, and they often do. In Germany, for example, sector CBAs set rates above the statutory minimum of EUR 13.90 per hour (2026). Elderly-care qualified workers covered by a CBA earn EUR 21.58 per hour. The higher rate always takes precedence. ## What happens if a CBA changes during employment? CBAs are renegotiated periodically, typically every one to three years. When a new agreement comes into force, its updated terms apply automatically to covered employees. Teamed monitors CBA renewals in every country where it employs people on your behalf so your workers stay compliant without you tracking it yourself. ## Does a CBA override an individual employment contract? A CBA sets a floor, not a ceiling. An individual employment contract can give a worker better terms, but it cannot give less than the CBA provides. Where they conflict, the more favourable term for the worker usually applies under local law. ## Key facts - **Germany statutory minimum wage (2026):** EUR 13.90 per hour (Source: Playroll, Minimum Wage in Germany: Rates, Trends & Compliance, verified 2026-06-24) Sector CBAs frequently set higher rates. Qualified elderly-care workers covered by the care sector CBA earn EUR 21.58 per hour. - **France active collective agreements:** Over 700 (Source: Employsome, Minimum Wage in France (Updates for 2026), verified 2026-06-24) France has more than 700 active conventions collectives. CBA coverage is near 100% because agreements are routinely extended to entire sectors. - **Global collective bargaining coverage:** Around 58% of workers (Source: ILOSTAT, Beyond the numbers: exploring the relationship between collective bargaining coverage and inequality, verified 2026-06-24) The ILO estimates that roughly 58% of workers worldwide are covered by a collective bargaining agreement, though coverage ranges from under 2% in some countries to nearly 100% in others. ## Frequently asked questions ### Does a CBA apply to my company even if we are not a union member? In many countries, yes. Where a government extends a sectoral CBA to an entire industry, all employers operating in that sector are bound by it regardless of union membership. France, Germany, Austria and Spain all use extension mechanisms of this kind. ### What topics does a CBA typically cover? Wages and pay scales are the most common topics, followed by working hours, overtime rates, holiday entitlement, sick pay, health and safety rules and notice periods. Some CBAs also address training rights and dispute procedures. ### How do I know which CBA applies to a new hire? The applicable CBA depends on the country, industry sector and sometimes the worker's job category or location. Teamed's in-house employment-law team identifies the correct CBA before each hire and builds its requirements into the employment contract. ### Can we offer better terms than the CBA? Yes. A CBA sets the minimum floor for employment conditions. You are free to offer higher pay, more leave or additional benefits above what the CBA requires. The only constraint is that you cannot go below it. ## Sources - [Collective bargaining and labour relations](https://www.ilo.org/topics-and-sectors/collective-bargaining-and-labour-relations), International Labour Organization - [Minimum wages through collective bargaining](https://www.ilo.org/resource/32-minimum-wages-through-collective-bargaining), International Labour Organization - [Beyond the numbers: exploring the relationship between collective bargaining coverage and inequality](https://ilostat.ilo.org/beyond-the-numbers-exploring-the-relationship-between-collective-bargaining-coverage-and-inequality/), ILOSTAT - [Minimum Wage in Germany: Rates, Trends & Compliance](https://www.playroll.com/minimum-wage/germany), Playroll - [Minimum Wage in France (Updates for 2026)](https://employsome.com/blog/france-minimum-wage/), Employsome - [Extension of collective agreements](https://www.eurofound.europa.eu/en/european-industrial-relations-dictionary/extension-collective-agreements), Eurofound - [Collective Bargaining across Europe](https://worker-participation.eu/National-Industrial-Relations/Across-Europe/Collective-Bargaining2), Worker Participation _Last updated 2026-06-24. Reviewed by Teamed's in-house employment-law team. Source: https://www.teamed.global/glossary/collective-bargaining-agreement_