A more thorough explanation:

Definition: A labor contract, also known as a collective-bargaining agreement, is a legal agreement between an employer and a labor union that outlines the terms and conditions of employment, including wages, benefits, and grievance procedures.

Example: A union representing factory workers negotiates a labor contract with the factory owner. The contract specifies the hourly wage, working hours, overtime pay, vacation time, and other benefits for the workers. It also outlines the process for resolving disputes or grievances between the workers and the employer.

Explanation: The example illustrates how a labor contract is a legally binding agreement between an employer and a labor union that sets out the terms and conditions of employment. The contract is negotiated through collective bargaining, which is the process of bargaining between the union and the employer to reach an agreement that is acceptable to both parties. The contract provides job security and protection for workers, while also ensuring that the employer can operate efficiently and profitably.