A labor contract is a binding legal agreement that establishes the rules and regulations that will govern the relationship between an employer and an employee. The terms of the contract include both the rights and the responsibilities of each party, and the opportunities to seek redress or remedy in the event that one party fails to live up to the obligations stipulated within the contract terms. A labor contract may be an individual agreement between an employee and an employer or a collective agreement that is arranged through a labor union with a group of employers.
