An agreement with employees or their representatives is binding for both the employer and the employees. It is the foundation upon which a solid relationship is built and it binds people together who have a common goal. Michigan employees would generally agree that employment contracts are final and have to be respected by all parties involved. Even if a company goes out of business, the agreement and the relationship should not fall apart.
In a recent case, Detroit entered into five-year agreements with unions that represent more than one-third of the employees in the city. This was revealed by mediators who are leading bankruptcy talks. The announcement of the new employment agreement has come about just as the judge ruled that the city should resolve disagreements with the residents in neighboring suburbs who depend on it for sewer and water services.
In the $18 billion bankruptcy case, Detroit and the surrounding suburbs are at odds over whether the sewage and water departments should be converted into regional bodies. The city would then have the advantage of claiming annual fees from the body. The bankruptcy judge feels that the new employment agreement would be in the best interest of everyone who is involved. When it comes to labor and employment agreements, the terms need to be respected by all parties involved. However, disagreements do happen sometimes. If a disagreement does occur, it may be wise to get the right information regarding issues pertaining to employment agreements so that everything runs smoothly.
Source: Bloomberg, “Detroit Mediators Say Unions Agree on Five-Year Contracts,” Steven Church and Steven Raphael, April 28, 2014