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.