pattern bargaining

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Is a form of collective bargaining in which agreements negotiated in lead firms or in a leading sector provide a model or ‘pattern’ for agreements in other parts of the economy. There are two main forms of pattern bargaining. Inter-industry pattern bargaining arises when one industrial sector sets the rate for agreements in other industries. In many European countries, the engineering industry has traditionally played this role, with percentage increases in pay negotiated in this sector being followed elsewhere. Intra-industry pattern bargaining, in contrast, occurs where bargaining is decentralized to company level and lead firms in each sector negotiate pattern settlements with a trade union, which then seeks to spread the agreement to the other firms with which it bargains. Intra-industry pattern bargaining was for long characteristic of the industrial relations of mature manufacturing industry in the United States, where unions focused bargaining pressure on target companies with the aim of spreading concessions to other firms. It provided a means of coordinating bargaining within a decentralized system and hence reduced pay inequality. The weakening of trade unions since the 1980s has eroded pattern bargaining, though in the USA and other countries it remains that collective agreements within sectors tend to converge. [See coordinated bargaining, leapfrogging, shunto, and whipsawing.]

Subjects: Human Resource Management.

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