We brought this case here, 335 U.S. 869, 69 S.Ct. 166, to resolve a conflict of views between two Courts of Appeals in their interpretation of the rights given to veterans of World War II by § 8 of the Selective Training and Service Act of 1940, as amended, 54 Stat. 885, 890, 58 Stat. 798, 50 U.S.C.App. § 308, 50 U.S.C.A.Appendix, § 308. Three veterans brought this suit for compensation for the period of a layoff while employed at Lockheed Aircraft Corporation, a respondent here. The facts controlling the legal claims of all three may be represented by the circumstances attending Kirk's employment and layoff.1

The petitioner, Aeronautical Industrial District Lodge No. 727, was the duly recognized collective bargaining agent of the employees at Lockheed Aircraft Corporation. In September, 1941, the union had negotiated an agreement with Lockheed covering the range of subjects touching conditions of employment typical of such agreements in the aircraft industry. This agreement was in effect when Kirk was employed in August, 1942, by Vega Aircraft Corporation, which afterwards was merged with Lockheed. He joined the union and has remained a member throughout this controversy. He left Lockheed two years later to enter the Army, from which he was honorably discharged in January, 1946, and was restored to his job at Lockheed in accordance with § 8(a) of the Selective Service Act. 54 Stat. 885, 890, as amended, 50 U.S.C.App. § 308(a) 50 U.S.C.Appendix, § 308(a). While Kirk was in military service his union made a new agreement with Lockheed modifying the terms of the 1941 agreement in various particulars. Crucial to the issue here was a change in the seniority provisions of the former agreement. The change provided that 'Union Chairmen who have acquired seniority shall be deemed to have top seniority as long as they remain Chairmen.'2 In plain English this means that thereafter employees who served as union chairmen were entitled to be retained in case of layoffs regardless of their length of service in the plant.

In the latter part of June, 1946, and within a year after Kirk's reemployment, it was necessary to lay off employees in Kirk's industrial unit. These layoffs followed the conventional sequence of seniority, time for military service being duly credited, with the exception that union chairmen were retained in accordance with the 1945 agreement, even though they had less time with the company than those who were laid off, veterans or not. Kirk was among those laid off, and the retention as union chairmen of men who were junior to him is the basis of his claim that § 8 of the Act had been infringed.3 Kirk was brought back to work within a month, but Lockheed refused to pay him for the time he was laid off. For this sum he brought this suit. Petitioner Union was allowed to intervene in order to protect its labor contract. Judgment went for Kirk, and the Union alone took the case to the Court of Appeals for the Ninth Circuit. That court affirmed the judgment,4 169 F.2d 252, holding that § 8 of the Act forbade disregard of length of employment, so far as veterans are affected, in enforcing provisions in a collective agreement for the retention of union chairmen in the event of layoffs regardless of their length of service. In so holding it ran counter to a series of decisions in the Court of Appeals for the Third Circuit. Gauweiler v. Elastic Stop Nut Corp., 162 F.2d 448; Koury v. Elastic Stop Nut Corp., 162 F.2d 544; DiMaggio v. Elastic Stop Nut Corp., 162 F.2d 546, and Payne v. Wright Aeronautical Corp., 162 F.2d 549.

It is of the essence of collective bargaining that it is a continuous process. Neither the conditions to which it addresses itself nor the benefits to be secured by it remain static. They are not frozen even by war. Thus, under the Act the veteran accumulates time toward his seniority while in the service; he also becomes the beneficiary of those gains the achievement of which is the constant thrust of collective bargaining. In other words, the Act gives him the status of one who has been 'on furlough or leave of absence' but uninterruptedly a member of the working force on whose behalf successive collective agreements are made. In this way the Act protects the furloughed employee from being prejudiced by any change in the terms of a collective agreement because he is 'on furlough,' but he is not to be favored as a furloughed employee as against his fellows. This is the essence of our decision in Fishgold v. Sullivan Drydock & Repair Corp., 328 U.S. 275, 66 S.Ct. 1105, 90 L.Ed. 1230, 167 A.L.R. 110.

In providing that a veteran shall be restored to the position he had before he entered the military service 'without loss of seniority,' § 8 of the Act uses the term 'seniority' without definition. It is thus apparent that Congress was not creating a system of seniority but recognizing its operation as part of the process of collective bargaining. We must therefore look to the conventional uses of the seniority system in the process of collective bargaining in order to determine the rights of seniority which the Selective Service Act guaranteed the veteran.

Barring legislation not here involved, seniority rights derive their scope and significance from union contracts, confined as they almost exclusively are to unionized industry. See Trailmobile Co. v. Whirls, 331 U.S. 40, 53, note 21, 67 S.Ct. 982, 988, 91 L.Ed. 1328. There are great variations in the use of the seniority principle through collective bargaining bearing on the time when seniority begins, determination of the units subject to the same seniority, and the consequences which flow from seniority. All these variations disclose limitations upon the dogmatic use of the principle of seniority in the interest of the ultimate aims of collective bargaining. Thus, probationary conditions must often be met before seniority begins to operate; sometimes it becomes retroactive to the date of employment; in other instances it is effective only as from the qualifying date; in some industries it is determined on a company basis, in others the occupation or the plant is taken as the unit for seniority determination; sometimes special provisions are made for workers in key positions; and then again these factors are found in varying combinations. See Williamson & Harris, Tren § in Collective Bargaining, 100—102 (1945); Harbison, Seniority Policies and Procedures as Developed through Collective Bargaining 1—10 (1941).

To draw from the Selective Service Act an implication that date of employment is the inflexible basis for determining seniority rights as reflected in layoffs is to ignore a vast body of long-established controlling practices in the process of collective bargaining of which the seniority system to which that Act refers is a part. One of the safeguards insisted upon by unions for the effective functioning of collective bargaining is continuity in office for its shop stewards or union chairmen. To that end provision is made, as it was made here, against laying them off merely on the basis of temporal seniority. Because they are union chairmen they are not regarded as merely individual members of the union; they are in a special position in relation to collective bargaining for the benefit of the whole union. To retain them as such is not an encroachment on the seniority system but a due regard of union interests which embrace the system of seniority rights.

These considerations are decisive of the case. The agreements made by the Union with Lockheed represent familiar developments in the process of collective bargaining which the Selective Service Act presupposes and in the context of which it must be placed. Kirk's rights, including seniority, before he entered the service were derived from the agreement of 1941. So, likewise, were his rights, including seniority, as an employee on furlough defined by the agreement of 1945, inasmuch as that agreement in no wise disadvantaged his position because he was in the military service.

In the ordinary and orderly course of formulating the terms of employment, the 1945 agreement between the union and Lockheed in some directions modified the provisions of the 1941 agreement. A labor agreement is a code for the government of an industrial enterprise and, like all government, ultimately depends for its effectiveness on the quality of enforcement of its code. Because a labor agreement assumes the proper adjustment of grievances at their source, the union chairmen play a very important role in the whole process of collective bargaining. Therefore it is deemed highly desirable that union chairmen have the authority and skill which are derived from continuity in office. A provision for the retention of union chairmen beyond the routine requirements of seniority is not at all uncommon and surely ought not to be deemed arbitrary or discriminatory.5 The fact that it may involve, as in Kirk's case, the temporary layoff of a veteran while a nonveteran chairman with less time at the plant is retained, is wholly unrelated to the veteran's absence in the service. Under the 1945 agreement chairmen were to be elected once a year, and unless the election occurred on the day before a veteran returned to the plant, his chance of election would be the same as that of persons who had been continuously at work in the plant.

Of course, the Selective Service Act restricts a readjustment of seniority rights during the veteran's absence to the disadvantage of the veteran. But it would be an undue restriction of the process of collective bargaining (without compensating gain to the veteran) to forbid changes in collective bargaining arrangements which secure a fixed tenure for union chairmen, whereby veterans as well as nonveterans are benefited by promoting greater protection of their rights and smoother operation of labormanagement relations.

All this presupposes, obviously, that an agreement containing the 1945 provisions expresses honest desires for the protection of the interests of all members of the union and is not a skillful device of hostility to veterans. There is not the remotest suggestion that the 1945 agreement was other than what it purported to be—the means for securing both to veterans and to non-veterans better working conditions through elected leaders not subject to the contingencies of a labor turnover.

Reversed.

Mr. Justice DOUGLAS concurs in the result.