What Is an Industrial Agreement?

Relations between employers and employees is seldom seamless. Thus, the stability of these partnerships has critical influence on the industries represented. Industrial agreements are one way for attempting to balance divergent interests and for making industries more effective and competitive.


An industrial agreement is often an accord reached between employers in a certain industry, their employees or employee representatives and, in some cases, the government. This term is used more often in Europe, Australia and other contexts than it is in the United States.


There can be a number of objectives involved with an industrial agreement. They can largely be seen as mechanisms for encouraging stable employer-worker relationships within an industry, promoting its competitiveness and managing related unemployment rates. One method of approach is to place controls over wages as a way to accommodate unions as well as to promote greater productivity.


In 2010, considerable attention in Sweden was been placed on the industrial agreement in their manufacturing sector. The agreement attempts to govern and facilitate wage negotiations and keep the domestic industry competitive in the international arena. The agreement has seen some difficulty as at least one major employer organization has departed the agreement, potentially influencing others to do the same.

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