Collective bargaining agreements allocate rights and obligations beyond wages and benefits. This column analyses 30,000 Canadian agreements from 1986 to 2015 for non-wage worker rights. Unions secure a wide range of enforceable rights, including scheduling protections, grievance procedures, and dismissal safeguards. Such clauses increase when income tax rates rise or outside job opportunities improve, showing that worker rights have measurable economic value. The findings suggest that policy debates should consider the full legal content of contracts, not just pay.
Unions are once again at the centre of political debate. In the US, President Trump’s executive orders ended collective bargaining rights for more than one million federal workers, a move that sparked widespread concerns about the future of worker protections. In the UK, the Employment Rights Bill promises to reverse many of the restrictions placed on unions in recent years and to expand union recognition and bargaining rights.
These flashpoints place a renewed spotlight on what unions and union contracts actually deliver. Past scholarship has focused heavily on union effects on wages, benefits, and employment (Freeman and Medoff 1984, Farber et al. 2021), but less attention has been paid to the legal text of collective bargaining agreements: the legal clauses including scheduling, grievance procedures, dismissal protections, vacation, and worker voice. This is potentially important because if contract terms do more than defining wage tables, then policy debates that focus solely on wages risk neglecting a central aspect of what unions actually do (Jaumotte and Buitron 2015, Blanchflower and Bryson 2024, Garnero et al. 2017, Medici 2025).
Collective bargaining agreements often run to dozens of pages. While wage tables are easy to identify, the legal clauses (such as “employees shall not be required to work more than eight consecutive hours without a break” or “the employer shall provide protective equipment at no cost to employees”) are less visible but may be equally consequential. Such clauses allocate enforceable rights and obligations between workers and firms.
Industrial relations research has long emphasised that unions affect workplace governance, not only pay (Farber 1986). More recent evidence shows that worker voice and representation can affect firm performance and worker welfare (Harju et al. 2021), and that workers attach value to dignity and procedural fairness in employment relationships (Dube et al. 2022).
These findings imply that work is more than just an exchange of time and wages. Workers may derive utility from having control over their work environment and from exercising voice and autonomy in the workplace. Union contracts can codify such forms of control by granting rights over scheduling, rest breaks, or work assignments – areas that may affect not only productivity but also well-being. A clause giving employees the right to refuse excessive overtime or to select shifts within agreed limits, for example, may directly shape their sense of agency and quality of life at work.
Yet, systematic measurement of these non-wage rights has been lacking, especially across large corpuses and over time.
In our recent paper (Arold et al. 2025), we analyse the legal content of collective bargaining agreements by examining 30,000 agreements negotiated in Canada between 1986 and 2015. Canada offers a rich setting, given the archived contracts, which allows us to build a broad sample covering firm-level bargaining across sectors. We apply a structural natural language processing approach combined with legal theory. Sentences are parsed into subject–verb–object structures. Modal verbs such as “shall” or “must” mark enforceable obligations (versus “may”, which indicates permission). Each clause is classified into legal categories, including worker rights.
Across the 30,000 contracts, we identify more than three million legally binding clauses. Worker rights are of particular interest as they represent entitlements that workers can enforce through grievance or arbitration procedures.
The contracts show that unions secure a wide variety of rights that go beyond wages and pensions. To organise the large set of clauses, we classify worker rights using topic modelling, which groups provisions into coherent clusters. One prominent set concerns scheduling and working time, such as limits on overtime and rules on daily breaks. Another set covers holidays and vacations, where contracts specify entitlements to paid leave. A further cluster relates to job security and due process, including seniority rules, recall rights after layoffs, and grievance and discipline procedures. Finally, many clauses address health and wellbeing, such as workplace safety and sick leave.
Among these categories, rights relating to scheduling and holidays together make up the largest share. This pattern is consistent with theories of the firm which suggest that decision rights should be allocated to the party best informed about them (Aghion and Tirole 1997). Workers typically have the best information about their own time constraints, so it is natural that contracts codify rights in these domains.
The key question is whether these rights are economically meaningful. We examine how contract rights respond to variation in tax policy and labour market conditions. First, when labour income taxes rise, cash wages become more expensive for workers and for firms negotiating with unions. We find that in Canadian provinces where income tax rates increase, new collective bargaining agreements include more worker rights clauses (Figure 1). At the same time, union wages fall relative to non-union wages. This suggests that rights serve as a non-taxed alternative margin of compensation (Gruber and Poterba 1994).
Figure 1 Event study: Effect of income tax increase on worker rights
Second, when outside employment opportunities improve (captured by sectoral employment gains), worker rights clauses become more prevalent. Stronger bargaining power translates into stronger rights in contracts. Together these findings indicate that worker rights in contracts behave like a true margin of compensation: they respond to economic incentives and play a role in the union firm bargain.
We estimate how much these rights are valued by workers by comparing how wages and rights move together. The calculation suggests that an increase of one standard deviation in the share of worker rights clauses in a contract is equivalent to about 5.7% of wages. In practical terms, this means that these rights – scheduling protections, grievance mechanisms, seniority, and recall rights – are far from incidental but have real economic value to workers.
Collective bargaining agreements are not just lists of wages and benefits. They are legal instruments that allocate rights and obligations. By analysing 30,000 Canadian contracts, we show that worker rights respond to taxes and labour market conditions and that increasing worker rights from an average level to a generous level is worth nearly 6% of wages.
Our work contributes to the growing literature using text as data in economics (Gentzkow et al. 2019, Ash and Hansen 2023). Legal contracts are particularly well suited for this kind of analysis because they encode real, enforceable rights and obligations. Our methods could be extended to other legal documents such as corporate contracts, international treaties, or environmental governance instruments.
Source : VOXeu
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