This refers to the common and distinguishing features of industrial relations in Denmark, Finland, Norway, and Sweden. At the heart of the model is a ‘basic agreement’ between the central confederations of business and labour, which provides far-reaching joint regulation of the labour market and reduces the need for an extensive statutory labour code. Further components include high levels of collective organization amongst employers and employees, centralized trade unions and employers' associations, and a three-tier system of wage bargaining at national, industry, and workplace levels. The Nordic system was associated for many years with low inequality, low inflation, low unemployment, strong welfare provision, and industrial peace. Greater exposure to world markets has placed the system under strain, however, and particularly in Sweden its future is in doubt. [See solidaristic wages policy.]
Subjects: Human Resource Management.