The Anatomy of Two-tier Bargaining Models

Collective bargaining in most European countries takes the form of multi-employer collective agreements. In the three Scandinavian countries, a two-tier model of bargaining has developed in many sectors: sectoral agreements prescribe national standards and nationally agreed wage increases, but they also give procedural and economic guidelines or frameworks for local or firm-level pay arrangement. Dispute resolution procedures at local level are the crucial link between levels, and a variety of such procedures are discussed. Similar examples of two-tier models can be found in other European countries, but they seem to be more fully developed in the Scandinavian countries. Possible explanations are considered, together with a discussion of the different forms of variation in wages opened up by two-tier models.