Collective bargaining and many of their underlying laws and institutions are the result of major crises, including the Great Depression of the 1930s, which became an inspiration for negotiations with several employers and the rules that, for half a century or more, allowed full coverage of collective agreements. In the United States, these were the years of the creation of industrial unions that were organized through companies in the mass production industry. In post-war Western Europe, negotiations on several employers at national and sectoral level became the cornerstone not only of wage-setting, but also of labour market regulation in general. After 1989, labour laws in post-communist Europe explicitly made way for negotiations with several employers. Although collective bargaining has changed in many respects, both in terms of content and structural, the multi-employer nature of the negotiations has remained remarkably stable, at least in continental-Western Europe and until the Great Recession. Decentralization has been the main trend in labour relations since the 1980s – reversing the long-term trend of recent decades, culminating in the energy and currency upheavals of the 1970s, when many countries attempted to respond to labour cost pressures through a wage policy based on central agreements and tripartite social pacts (Addison 1981; Armingeon 1982; Flanagan et al. 1983). Central, inter-professional wage agreements ended in the late 1970s or early 1980s in Austria, Denmark, the Netherlands, Spain and Sweden, then in Norway and in the form of centralized premiums in New Zealand and Australia in the 1990s. They continued in Finland, Belgium and Greece, usually with much help or pressure from the government. Tripartite social pacts and agreements became the format of wage setting in Ireland from 1987 to 2009, in a few years in Portugal in the 1980s and 1990s, in Slovenia from 1994 and in Romania from 2005. Major wage agreements have never been concluded in Germany, Switzerland, the United Kingdom, Canada, the United States, Japan and other non-European countries.
In the 1970s, the United Kingdom went through a period of “social contract” negotiations between trade unions and the government, and similar social pacts were put in place in Australia in the 1980s, South Korea during the Asian crisis (1997) and Chile after the end of the dictatorship in 1990. In the CEECs, pacts were rare and tripartite social dialogue on the national minimum wage, established in many CEECs during or after the transition, has sometimes served as a substitute for wage negotiations based on the bargaining power of employers and unions. Political and social considerations were often predominant, but employers could take revenge by not conducting minimum wages, or by reordling employment contracts outside the scope of the Minimum Wage Act, which was a common practice (EC 2004).