Vertical New Knowledge Transfer and the Revival of Multi-Employer Collective Bargaining

Abstract

This paper addresses the puzzle of how and why multi-employer bargaining has revived as a policy idea given the apparent dominance of neoliberalism. Multi-employer bargaining has emerged as a solution to problems caused by failed neoliberal policies. These solutions have been generated and disseminated through a process of vertical 'new knowledge' transfer between international, regional and national governance levels, which local actors have mobilised to influence policy debates and outcomes. We develop these arguments using case studies of the Organisation for Economic Cooperation and Development's changing position on collective bargaining, the European Union Minimum Wage Directive 2022 that encouraged multi-employer bargaining, and bargaining reforms implemented in 2022-24 in Australia. We contribute insights to power resource theory regarding how new knowledge as a distinct form of ideational power is operationalised vertically across different governance levels to resolve localised labour problems.

Full text

Industrial Relations Journal
ORIGINAL ARTICLE
Vertical New Knowledge Transfer and the Revival of
Multi‐Employer Collective Bargaining
Søren Kaj Andersen
1
| Chris F. Wright
2
1
University of Copenhagen, Copenhagen, Denmark |
2
University of Sydney, Sydney, Australia
Correspondence: Chris F. Wright (chris.f.wright@sydney.edu.au)
Received: 4 February 2025 | Accepted: 28 February 2025
Keywords: collective bargaining | employment relations | knowledge regimes | policy transfer | power resource theory
ABSTRACT
This paper addresses the puzzle of how and why multi‐employer bargaining has revived as a policy idea given the apparent
dominance of neoliberalism. Multi‐employer bargaining has emerged as a solution to problems caused by failed neoliberal
policies. These solutions have been generated and disseminated through a process of vertical ‘new knowledge’transfer between
international, regional and national governance levels, which local actors have mobilised to influence policy debates and
outcomes. We develop these arguments using case studies of the Organisation for Economic Cooperation and Development's
changing position on collective bargaining, the European Union Minimum Wage Directive 2022 that encouraged multi‐
employer bargaining, and bargaining reforms implemented in 2022–24 in Australia. We contribute insights to power resource
theory regarding how new knowledge as a distinct form of ideational power is operationalised vertically across different
governance levels to resolve localised labour problems.
The claim that industrial relations systems have been
defined by a ‘common neoliberal trajectory’of expanding
employer discretion has been influential in comparative
industrial relations scholarship for the past decade (e.g.,
Baccaro and Howell 2017;Thelen2014). The continued
decline of collective bargaining coverage and trade union
membership and the spread of insecure forms of work have
provided support for this claim (Wright et al. 2021). Inter-
national organisations have influenced these developments
through their promotion of deregulatory ‘Washington Con-
sensus’policies (Silva 2023). However, recent support for
multi‐employer bargaining from international organisa-
tions, and the adoption of such measures at the regional
level by the European Union and at the national level in
various countries (Sisson 2024), challenge the notion of a
common neoliberal trajectory across industrial relations
systems.
This paper seeks to explain this puzzle of multi‐employer
bargaining reviving as a policy idea given the apparent dom-
inance of neoliberalism. We argue multi‐employer bargaining
has emerged as a solution to problems such as widening
inequality and political instability caused by failed neoliberal
policies. Moreover, multi‐employer bargaining can be re-
garded as important in the pushback against neoliberalism
given its potential capacity to constrain the exercise of em-
ployer power, enhance employee voice, produce fairer wage
outcomes and reduce inequality (Clegg 1976;Grimshawetal.
2024;Sisson2024;TraxlerandBrandl2009). These solutions
have been generated and disseminated through a process
of vertical new knowledge transfer between international,
regional and national governance levels. A key development
in this process has been the changed position of international
organisations generating labour market policy orthodoxy,
which includes the Organisation for Economic Cooperation
This is an open access article under the terms of the Creative Commons Attribution‐NonCommercial‐NoDerivs License, which permits use and distribution in any medium, provided the original work
is properly cited, the use is non‐commercial and no modifications or adaptations are made.
© 2025 The Author(s). Industrial Relations Journal published by Brian Towers (BRITOW) and John Wiley & Sons Ltd.
Earlier versions of this research were presented at the FAOS seminar series at the University of Copenhagen in 2024 and at the Association of Industrial Relations Academics of Australia and New
Zealand annual conference in 2024. The authors are grateful for audience feedback from those presentations.
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and Development (OECD) and the European Commission.
In contrast to their previous assessments that collective
bargaining generates negative economic outcomes, these
organisations have recently revised their positions and
identified its economic benefits (Janssen 2019;McBrideand
Watson 2019;Silva2023). We demonstrate the impact of this
‘new knowledge’at the international level and examine how
this knowledge has been mobilised by local actors at the
regional and national levels toinfluencepolicydebatesand
outcomes.
We draw on theories of knowledge regimes (Campbell and
Pedersen 2014), power resources (Arnholtz and Refslund 2024)
and policy transfer (Dolowitz and Marsh 2000) to address the
following question: How and why has vertical new knowledge
transfer relating to multi‐employer bargaining been generated
and disseminated between different governance levels?We
address this question with reference to three case studies to
illustrate the generation and dissemination of new knowledge
regarding multi‐employer bargaining across three levels—
international, regional and national—through a review of rel-
evant academic literature and primary sources. The first case
examines the changing position of international organisations,
particularly the OECD, on collective bargaining. The second
case examines the European Union's (EU) 2022 directive on
minimum wages that sets an 80% threshold for collective bar-
gaining coverage which inherently encourages multi‐employer
bargaining in EU member states not meeting this threshold.
The third case examines policy reforms in Australia, a liberal
market economy with institutional barriers to collective bar-
gaining but which between 2022 and 2024 strengthened
mechanisms to support multi‐employer bargaining, represent-
ing the most comprehensive suite of national‐level bargaining
reforms in recent years.
Our analysis highlights the importance of new knowledge as a
distinct form of ideational power contingent upon the mobili-
sation of other power resources. We contribute to power
resources theory by demonstrating how ideational power can be
used to challenge existing orthodoxies in response to apparent
labour problems (Heery 2016; Kochan 1998) connected to wider
social, economic and political problems. We also demonstrate
how international organisations generate and disseminate ideas
and knowledge and how this affects policy engagement by local
actors at the regional and national levels.
1|‘New Knowledge’, Power Resources and
Vertical Policy Transfer
Industrial relations is fundamentally a ‘problem‐oriented’dis-
cipline with an overriding concern to understand and resolve
systemic ‘labour problems’at the organisational, sectoral and/or
societal levels (Kochan 1998). Clegg (1979) argued that the
‘problem of order’was the primary concern of industrial rela-
tions, which in the context in which he was writing—that is,
high levels of industrial action and inflationary wages in the
United Kingdom (UK) during the late 1970s—was generally
assumed to be a problem caused by unruly workers. However,
in more recent years, such challenges have been surpassed by
problems of unruly employers and markets, as reflected in the
decline of industrial action in many countries and emergent
problems of low wage growth and inequality (Nolan 2011). This
change in the underlying ‘problem of order’preoccupying
contemporary industrial relations has been characterised as
a shift from ‘problems of labour’to ‘problems for labour’
(Heery 2016;Wright2023).
Paradoxically, recent developments suggest that these problems
for labour should be understood as general problems for wider
society. This happens when low wages and insecure jobs trigger
social unrest and right‐wing populism. Further, national
economies have been challenged by diminished purchasing
power undermining growth strategies. Low investment in skills,
training and education have arguably reinforced these eco-
nomic problems especially given entrenched labour shortages in
many developed economies (Hassel 2023; OECD 2019). In
short, contemporary problems for labour are essentially about
clusters of interwoven social, political and economic problems.
1.1 | Knowledge Regimes
Various concepts can potentially help to explain how solu-
tions, or new ideas, to emergent labour policy problems are
generated and disseminated vertically between different levels
of government. Campbell and Pedersen's (2014)workon
knowledge regimes explains how institutional and organisa-
tional machinery constituted by a wide range of actors
produces ideas that influence the public policy process. This
literature offers two different explanations for how new
knowledge or new ideas are generated. First, existing knowl-
edge regimes can demise or break down. For example, policies
developed during the post‐war ‘golden age’evaporated in the
mid‐1970s to be replaced by neoliberal policies (Campbell and
Pedersen 2014). The ineffectiveness of Keynesian solutions for
problems relating to stagflation stemming from the oil crises of
1973–74 generated a loss of confidence in the orthodox policy
framework, resulting in an expansion of the ‘marketplace in
economic ideas’with state and non‐state actors actively
seeking credible policy alternatives and engaging in the
debates over their merits (Hall 1993). More recent scholarship
has considered the question of whether the neoliberal ortho-
doxy that, in many countries, replaced the post‐war Keynesian
orthodoxy has exhausted itself as a policy solutions frame-
work. The answer appears to be ambivalent. Crouch (2011)
speculated about the strange non‐death of neoliberalism but
has more recently argued that neoliberalism at least appears
dented (Crouch 2024). Several others have argued that the
neoliberal consensus has been under pressure and thereby
created room for alternative policy solutions (Carstensen
et al. 2022;Hassel2023;SchultenandMüller2021). Others
maintain that neoliberal policies have remained dominant and
tended to create convergence despite variations between dif-
ferent economies (Baccaro and Howell 2017).
The second potential explanation for why new knowledge or
new ideas emerge is that knowledge regimes are never one
dimensional or fixed in form and content but rather are
dynamic and therefore malleable depending on the specific
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circumstances. A key argument for the adaptiveness of knowl-
edge regimes is national diversity. Campbell and Pedersen
(2014) identify US competition, French statism and German
coordination as decisive for the specific character of national
knowledge regimes. Focusing more specifically on labour
market regulation, several authors have emphasised the ex-
istence of a variety of policy trajectories. Thelen's (2014) com-
parative study of Denmark, Germany and the US found
national institutions have channelled common pressures from
neoliberal policies in different ways. While national industrial
relations systems have moved in a neoliberal direction, this has
not led to convergence towards a single model from this per-
spective. Meardi's (2018) study of national industrial relations
responses to European integration finds minimal evidence
of neoliberal convergence, with differential institutions and
power relations producing different outcomes. Morgan and
Hauptmeier (2021) argue that knowledge regimes have shaped
the extent of influence of neoliberal ideas on national industrial
relations institutions. In sum, the literature suggests a certain
room for interpretation or reinterpretation of knowledge
regimes which can explain how ‘new knowledge’emerges.
1.2 | Power Resources
In terms of how new knowledge or new ideas are disseminated,
literature on how actors utilise various power resources available
to them is potentially insightful. Wright (2000) and Silver (2003)
developed the power resources approach by distinguishing
between ‘associational power’deriving from these actors' col-
lective power through industrial or political organisation and
‘structural power’deriving from workers' or employers' economic
position. Later writers built upon this framework by identifying
additional power resources (Arnholtz and Refslund 2024;
Schmalz et al. 2018), including ‘institutional power’deriving
from laws and other institutions that either enhance or restrict
actors' collective activity, ‘coalitional power’from cooperating
with other actors with certain shared interests or goals (Schmalz
et al. 2018; Tattersall 2010), and ‘ideational power’from
developing strategies to influence public discourse and opinion
(Carstensen et al. 2022; Hauptmeier and Heery 2014;
McLaughlin and Wright 2018) or presenting ideas as solutions to
policy problems (Heery 2016;Kochan1998). It has been argued
that that the mobilisation of the last of these power resources,
ideational power, is contingent upon other power resources
(McLaughlin and Wright 2024).
Much of the discussion of ideational power focuses on ‘ideo-
logical weapons to control public debate and frame meaning
[aimed] at advancing a particular set of interests’(McLaughlin
and Wright 2024, 113). By contrast, evidence‐based ideas, or
expert knowledge that can ‘lend authority to particular policy
positions’(Boswell 2008, 472), generated and disseminated by
knowledge regimes, may be a unique source of ideational power
that remains conceptually underdeveloped within the literature.
So too is the process by which such new knowledge is dissemi-
nated or transferred across industrial relations systems.
Knowledge regimes and power resources theories provide
alternative, yet not necessarily conflicting, perspectives on how
new knowledge and new ideas emerge. The former perspective
emphasises how ecosystems of actors and institutions produce
and reproduce knowledge. The latter perspective draws atten-
tion to how specific actors possess the agency to mobilise var-
ious resources to attain strategic objectives including through
policy influence. The primary unit of analysis in both sets of
literature is the national level. There is relatively little attention
to the role of international actors in generating or disseminating
new knowledge vertically that local actors may utilise as idea-
tional power resources to influence policy at the regional or
national levels. The policy transfer literature within political
science is potentially instructive for addressing this gap.
1.3 | Policy Transfer
Policy transfer refers to processes by which ‘knowledge of policies,
administrative arrangements, institutions and ideas in one politi-
cal setting (past or present) is used in the development of policies,
administrative arrangements, institutions and ideas in another
political setting’(Dolowitz and Marsh 2000,5).Accordingto
James and Lodge (2003, 182), the concept of policy transfer
‘attempts to subsume concepts about the alteration of domestic
policy by external influences and “convergence”of policy in dif-
ferent countries’. Dolowitz and Marsh (2000) argue that the policy
transfer process involves actors in a certain political setting
searching for solutions,includingideas sourced from other policy
settings—international, regional, national or subnational—to
resolve new or changing problems.
International organisations can play a key role in this policy
transfer process as ‘diffusers, transmitters and …makers’of
new knowledge aimed at ‘teaching states their interests’
(Park 2006, 43; see also Béland and Orenstein 2013). Policy
transfer can occur either horizontally within the same gov-
ernance level—for example, one national government sour-
cing ideas from another national government—or vertically
between different governance levels—for example, a national
government being influenced by policy ideas propagated by an
international organisation. The policy transfer process is not
necessarily top‐down, but rather a multi‐directional and
dynamic one characterised by feedback mechanisms that en-
able the uploading and downloading of ideas about policy
problems and potential solutions (Benson and Jordan 2011).
That is, international organisations are not simply producers of
the ideas that can lead to policy generation and dissemination
but are also consumers of them (Park 2006).
Policy transfer between different governance levels can occur
either through hard or coercive means or through soft or vol-
untary means. Hard forms involve the imposition of certain
policies and principles typically in exchange for assistance. The
structural adjustment programs of the International Monetary
Fund (IMF), the World Bank and the European Commission are
examples of this, whereby national governments are given
financial support during periods of crisis on the condition that
those governments implement certain neoliberal economic re-
forms to enhance labour market flexibility. By contrast, soft
policy transfer involves the successful exercise of ideational
power whereby international organisations promote certain ideas
that national governments may adopt if those ideas align with
government agendas or help resolve policy problems (Silva 2023).
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Much of the work on policy transfer in industrial relations has
focused on the transfer of ideas within the same geographical
level. For example, Silva's (2023) work provides important
insights regarding the dissemination of ideas between inter-
national organisations. The comparative industrial relations
literature has examined how national‐level actors borrow
ideas from other national systems in response to particular
policy problems (Baccaro and Howell 2017;Bachand
Bordogna 2016; Meardi and Tassinari 2022). However, the
transfer of new knowledge and ideas vertically between dif-
ferent levels of government remains understudied within the
industrial relations literature. An exception is scholarship on
the so‐called ‘open method of coordination’in the EU's
employment strategy, with ‘policy learning’between diffe-
rent levels of government a highlighted mechanism (see
Hartlapp 2009;Zeitlin2009).
The following sections present three cases of the OECD,
EU and Australia to explain how multi‐employer bargaining
became a more attractive idea at international, regional
and national levels for solving labour problems.Itargues
that problems such as low wage growth, inequality and
political populism were uploaded from local levels leading
to new knowledge generation bykeypolicyactorsatthe
international level relating to multi‐employer bargaining as
a potential solution to these problems. This led to new
knowledge dissemination from international to regional
and national levels with local actors mobilising power
resources to enable this knowledge to be vertically trans-
ferred to these lower levels, that is, downloaded,toresolve
localised problems. In these ways solutions, or new ideas,
to emerging labour policy problems were generated and
disseminated vertically between different levels of govern-
ment, as the conceptual framework presented in Figure 1
illustrates.
2 | Case 1: Changing Views on Multi‐Employer
Bargaining Among International Organisations
In 2019, the OECD released a comprehensive report, Negotiat-
ing Our Way Up, which argued that countries with compre-
hensive coordinated multi‐employer bargaining systems had
better social and economic outcomes and more cooperative
industrial relations than countries with decentralised systems.
The publication of this report was significant since it marked
the most definitive and authoritative statement by the OECD in
support of multi‐employer collective bargaining. This stood in
marked contrast to the hostile position the OECD held previ-
ously towards multi‐employer collective bargaining, which had
legitimised neoliberal arguments favouring deregulatory labour
market policies that enhanced employer power and weakened
workers' rights. The OECD's analysis has been a key develop-
ment in the formulation of new knowledge relating to multi‐
employer bargaining.
The OECD is one of several international organisations or actors
involved in global labour governance, that is, ‘the collective
efforts made by transnational and international actors to man-
age working conditions and employment on a worldwide scale’
(Silva 2023, 207). These include the World Bank and the IMF
whose objectives align with ‘Washington Consensus’principles
of improving nation states' economic competitiveness. These
principles have encompassed a policy agenda of promoting
labour market deregulation, including hostility towards multi‐
employer bargaining, through hard or coercive transfer mech-
anisms that have increased the spread of neoliberal policies at
the national level. By contrast, the International Labour Orga-
nization (ILO) has consistently advocated for labour standards
and decent work and mechanisms to sustain them, including
freedom of association and collective bargaining, as enshrined
in the Declaration on Fundamental Principles and Rights at
FIGURE 1 | Conceptual framework—Vertical transfer of new knowledge regarding multi‐employer bargaining in response to defined
labour problems.
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Work. The ILO has only soft or noncoercive policy transfer
mechanisms at its disposal to promote its objectives and has
struggled to achieve the same influence at the national level as
the World Bank and the IMF (Silva 2023; Thomas and
Turnbull 2021).
The labour market policy positions of OECD have been
more fluid than those of these other international organisations
but, nevertheless, has traditionally supported the neoliberal
positions of the World Bank and IMF. Like the ILO, the OECD
can only achieve influence through soft transfer mechanisms
namely through its successful deployment of ideational power.
A key instrument the OECD uses to this end is research and
analysis through its production of reports including Economic
Outlook and Employment Outlook published annually and its
Jobs Strategy reports published at 12‐year intervals. The OECD
also achieves influence through engagement with business,
trade unions and member states. However, unlike the other
international organisations mentioned, the OECD's geographi-
cal reach is formally restricted to 38 democratic advanced
economies (Silva 2023). Despite this limited reach, ‘because of
its reputation for expertise, the OECD is an influential actor
at both global and national policy levels’(McBride and
Watson 2019, 150). It therefore has considerable legitimacy
among other international organisations and nation states.
The OECD's initial adherence to neoliberal orthodoxy was
articulated in its 1994 Jobs Strategy, which encouraged countries
to dismantle collective bargaining based on the argument that it
stifled jobs growth (OECD 1994). According to Silva (2023,211)
the OECD's 1994 analysis ‘concentrated on high unemployment
in advanced economies, which was expected to be reduced by
eliminating “rigidities”and the adoption by governments of a
supply‐side approach’. The report was produced at a time of
declining collective bargaining coverage especially in countries
with uncoordinated and fragmented systems where collective
agreements were typically made without direct reference to other
agreements in the same industry or sector. During this period,
influential studies were published indicating that while
highly centralised and highly decentralised bargaining systems
could lead to good macroeconomic performance, systems that
were partially but not fully centralised or decentralised tended
to produce negative macroeconomic impacts (Calmfors et al.
1988). While these studies were questioned by subsequent
analysis finding that ‘coordination’rather than the degree of
centralisation mattered more for macroeconomic performance
(Soskice 1990), they nevertheless were influential including on
the OECD.
In the UK's collective bargaining system, for example, some
collective agreements covered whole sectors, while others only
covered a handful of workers in a single workplace. Bargaining
outcomes at the workplace level were not linked to broader
industry or national goals, such as inflation containment or
skills development (Finegold and Soskice 1988). This lack of
coordination in the bargaining system contributed to signifi-
cantly higher levels of industrial conflict in the UK than other
large industrial economies in the 1970s (OECD 2006). The
Thatcher and Major governments used leapfrogging and infla-
tionary wage rises associated with high industrial conflict to
justify their legislative assault on unions and collective
bargaining in the 1980s and 1990s (Wright and Brown 2014).
Examples such as this contributed to the OECD's antipathy
towards collective bargaining.
The OECD's Reassessed Jobs Strategy in 2006 represented a
more nuanced position regarding the socioeconomic impacts
of multi‐employer collective bargaining. It continued to
advocate for neoliberal policies based on the assumption that
deregulatory arrangements enhanced labour mobility and job
creation. However, the OECD conceded these arrangements
came at the cost of increased inequality and social exclusion.
It argued that alternative regulatory systems were also effec-
tive in securing job creation while reducing barriers to
workforce participation and inclusion among traditionally
marginalised groups such as women and those in long‐term
unemployment (Silva 2023). The OECD specifically drew
attention to the strengths of the Nordic models that combined
flexicurity with highly coordinated collective bargaining,
which produced employment outcomes that were as good as
or superior to neoliberal, deregulated systems (OECD 2006;
see also Andersen 2024). Its analysis reflected the findings of
other studies from this period identifying the positive impacts
of highly coordinated collective bargaining systems (Traxler
and Brandl 2009).
The OECD's 2018 Jobs Strategy marked another important shift
away from its earlier advocacy for neoliberal policies. It argued
for a suite of measures to improve job quality and labour market
resilience including flexicurity, strong and inclusive collective
bargaining, protections for workers engaged in non‐standard
employment, and ‘well‐organised social partners based on
broad memberships and, in the absence of this, the advantage of
the instrument of administrative extension of sectoral agree-
ments’(OECD 2018, 103). According the Janssen (2019, 223),
the last of these recommendations showed ‘how much this
narrative of the OECD has evolved’since the 1994 Jobs Strategy.
The position of the 2018 Jobs Strategy in support of collective
bargaining was reinforced by the OECD's Negotiating the Way
Up report published in 2019, which represented its most
comprehensive analysis of collective bargaining and its
impacts. According to the report: ‘collective bargaining and
workers' voice are …important labour markets institutions
that matter for job quality. Collective bargaining, providing
that it has a wide coverage and is well co‐ordinated, fosters
good labour market performance’(OECD 2019,14).Thisand
subsequent studies by the OECD (2023)andtheILO(2022)
found that coordinated bargaining systems had generally
positive impacts on employment and unemployment, infla-
tion, industrial conflict, procedural efficiency, inequality,
gender inequality, social cohesion, discrimination, skills and
training (see also Grimshaw et al. 2024).
In explaining why theOECD'spositiononmulti‐employer
bargaining shifted, Silva (2023) highlights the disruptive ef-
fects of technological change on work and labour markets and
rising inequality that fuelled the popularity of right‐wing
populist political movements. This is supported by McBride
and Watson's argument that the OECD's evolving position is
partly a reflection of shifting policy contexts and associated
policy problems. The OECD's greatest policy concern in the
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1994 Jobs Strategy was unemployment. In 2006, job creation
remained an important policy goal, but this was placed on
equal footing with labour market participation, as the OECD's
more nuanced position indicated. By 2018 and 2019, address-
ing inequality and improving social cohesion had emerged as
OECD policy priorities, as its emphasis on regulatory settings
enabling job quality and inclusiveness indicates (McBride and
Watson 2019,152).
In sum, the problems of inequality, social dislocation and right‐
wing populism were uploaded on the international organisa-
tions' policy agendas, with the OECD serving as an influential
actor with significant institutional power (albeit of the soft
variety) by virtue of its legitimacy. The OECD used its ideational
power resource of expert knowledge to produce new knowledge
relating to multi‐employer bargaining. As the following two
cases of the European Union and Australia illustrate, this new
knowledge was downloaded at the regional and national levels
as solutions to policy problems through a process of vertical new
knowledge transfer.
3 | Case 2: Promoting Multi‐Employer Collective
Bargaining in the European Union
Somewhat surprisingly, the European Minimum Wage Direc-
tive adopted in 2022 included a clear and potentially far‐
reaching promotion of multi‐employer collective bargaining.
The directive highlights that ‘sector or cross‐industry level
collective bargaining is an essential factor for achieving ade-
quate minimum wage protection and therefore needs to be
promoted and strengthened’.
1
Thus, the directive states that
strong and well‐functioning sector or cross‐industry collective
bargaining not only ensures decent living and working condi-
tions for workers in general but also strengthens the adequacy
and coverage of minimum wages. Furthermore, the directive
prescribes that any EU member state in which the collective
bargaining coverage rate is less than a threshold of 80% shall
establish so‐called action plans on how to increase bargaining
coverage. The member states must collaborate with the social
partners in developing action plans, which need to be reviewed
regularly and updated. All EU member states that meet the
80% threshold have well‐developed sector or cross‐industry
collective bargaining, that is, multi‐employer bargaining
systems. Therefore, the directive explicitly informs EU member
states that do not meet the 80% threshold that they need to
develop multi‐employer bargaining systems.
This development in European social policy marked a significant
breakaway from the previously dominant view among EU policy
makers. Strong institutions to support collective bargaining were
seen as hindering free markets and having largely negative effects
on growth and employment. This neoliberal narrative has domi-
nated many aspects of EU policies in recent decades. For example,
the EU policy response to the 2008–09 financial crisis mandated
the so‐called Troika of the European Commission, the European
Central Bank and the IMF to manage the bailouts of Cyprus,
Greece, Ireland and Portugal. This led to austerity policies that cut
social benefits, curtailed wages, decentralised collective bargaining
and rapidly decreased collective bargaining coverage in some
member states (Hassel 2023;SchultenandMüller2021).
This raises the question of what were the drivers behind this
significant policy change. We argue that the European trade
union movement was particularly successful in bringing for-
ward new knowledge not only regarding the need for regulation
of European minimum wages but also to promote multi‐
employer collective bargaining. In line with our guiding
assumption, this was only possible due to the European trade
union movements' ability to mobilise other power resources,
namely institutional and coalitional power.
The social dimension in European policymaking has been
revived since the mid‐2010s (Keune and Pochet 2023; Mailand
2024; Schulten and Müller 2021). There are several explanations
for this change. Schulten and Müller (2021) argue that the
neoliberal orientation of European labour policies have proven
to be dysfunctional in several ways. Socially, they have con-
tributed to more in‐work poverty and precariousness and to a
further increase in social inequality in the EU as a whole.
Political problems had become urgent as well. In several EU
member states, populist right‐wing parties based on nationalist
agendas, tough policies on immigration and anti‐EU policies
have gained political support, and in some states, were able to
form governments (Hungary, Poland and later Italy). The Eur-
opean Parliament has been influenced by the same political
trend. Since 1999, the share of populist parties has increased in
every election. The traditional dominant political blocs in Par-
liament, the Christian Democrats and the Socialist Group, have
lost their traditional majorities and have been under pressure.
Accordingly, the growing disaffection toward EU institutions
and integration revived the idea that the EU needs a stronger
social dimension.
Furthermore, and perhaps most importantly, Schulten and
Müller (2021) highlight the economic problems that have
emerged. The liberal macroeconomic regime with a hard focus
on cost‐cutting and containing wages and inflation to enhance
competitiveness has not only led to social and political prob-
lems but also raised questions about the economy itself. Hassel
(2023) argues that the success of export‐led growth based on
cost competition has had downsides. First, there has been un-
derinvestment in both the public and private sectors. The pat-
tern is diverse among EU member states, where some lack
investments in infrastructure, while at the same time many—
including large states like Germany—lack investments in digi-
talisation. This leads to a second point. The climate crisis, the
COVID pandemic and the unpredictable and rapid development
of digitalisation have demanded a completely new set of political
responses. For the first time, the European Union agreed on a
mechanism that made loans available for member states, the
Recovery and Resilience Facility, with a total funding of €723
billion (EU Commission 2020). The goal has been to enhance
investments to make EU states more sustainable and resilient to
handle both the green and digital transitions. According to
Keune and Pochet (2023), this emphasised the negative re-
percussions of austerity policies and market governance, which
led many actors including international organisations to re‐
evaluate and revise their policy recommendations.
Put differently, social, political and economic problems were
uploaded to European policy debates, highlighting the need
for new ideas and new knowledge. This emphasis on fair wages
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and working conditions and a new focus on re‐and up‐skilling
have formed part of a new growth strategy. This has only been
reinforced in recent years due to the surprisingly tight
European labour markets. Despite concerns about inflation
and war in Ukraine, unemployment at the end of 2024 was at a
historical low of 5.9% for the entire EU. Tight labour markets
and labour shortages in many industries have underlined the
need for investments in education and training while also
ensuring fair development in wages and working conditions.
Hassel (2023) argues that decent minimum wages and stronger
collective bargaining systems have thereby become part of the
EU's growth strategy in its efforts to master the transition to
both a carbon‐free knowledge economy and a digitalised world
of work.
Schreurs and Huguenot‐Noël (2024)showhowcoalition
building became decisive for the adoption of the EU Mini-
mum Wage Directive. They argue that a network of actors
organised via the Party of European Socialists (PES) and the
European Trade Union Confederation (ETUC) managed to
secure a directive and not just a Council recommendation,
paving the way for the strong support of collective bargaining
for the directive. They argue that these actors' ability to exercise
influence over the direction of policy not only depended on
their ‘strength in numbers’or formal political role, but also on
their ability to build and maintain coalitions. The ETUC
nursed multiple connections to the European Commission, the
European Parliament and the Council often via affiliated
national federations. The ETUC managed to expand its scope
for action as a lobbyist ‘from within’(Dølvik and Ødegård 2012)
to a position as ‘shadow legislator’that sat, informally, at
the table in the final negotiations (Schreurs and Huguenot‐
Noël 2024, 20).
Paradoxically, the emphasis on collective bargaining was grad-
ually strengthened in the negotiating process. The ETUC played
a dominant role in pushing this agenda to its conclusion partly
due to internal disagreements. Swedish and Danish unions, in
particular, were against any legal intervention in pay settle-
ments fearing this would undermine their collective bargaining
systems (Bender and Kjellberg 2021). In the second stage of the
consultation process, the European Commission supported the
unions' concerns and proposed several measures to promote
collective bargaining while largely ignoring employer criticisms.
Further, there was strong support for strengthening the role of
collective bargaining in the Parliament, which in the end led
the French—holding the EU Presidency that half‐year—to
propose an increase from 70% to 80% bargaining coverage to
secure the support of the Parliament for the directive (Schreurs
and Huguenot‐Noël 2024).
It appears likely that the somewhat puzzling strengthening of
collective bargaining in the final phase of the formation of the
directive also happened due to the broader and renewed focus
on collective bargaining systems, that is, new knowledge on
what collective bargaining potentially can deliver, as formulated
by international actors like the OECD. The European Council's
support for collective bargaining also went beyond the Mini-
mum Wage Directive as it subsequently adopted recommen-
dations to strengthen social dialogue both at European and
national levels (Council of the European Union 2023).
A remaining question is whether this is a permanent or para-
digmatic change in European policies on the settlement of
wages and conditions. Despite the relatively broad coalition of
actors in the European Commission, in the Parliament and the
European Council being positive towards promoting collective
bargaining, there have also been criticism and scepticism voiced
by other parts of the Commission and the employer organisa-
tions (Keune and Pochet 2023; Mailand 2024; Schreurs and
Huguenot‐Noël 2024). Accordingly, the new knowledge is to
some degree contested, which raises questions about how
robust the European trade union movements' institutional and
coalitional powers are.
4 | Case 3: Reforming Multi‐Employer
Bargaining in Australia
There are significant barriers to multi‐employer collective bar-
gaining in ‘liberal market economies’due to the absence of
institutions to support these arrangements (Wright 2024).
Business groups in these countries tend to fiercely resist at-
tempts to strengthen workers' rights and boost wage growth.
However, recent reforms strengthening multi‐employer bar-
gaining in Australia, a noted liberal market economy, challenge
these characterisations. We argue the Australian Labor gov-
ernment was able to draw upon new knowledge, including the
research and analysis produced by the OECD since 2018, as a
distinct type of ideational power to achieve policy change in
support of multi‐employer bargaining.
Wages have been regulated on a collective basis in Australia
for most of its postcolonial history. From the beginning of the
20th century, a system of compulsory arbitration was estab-
lished that involved unions and employers entering disputes
resolved by state arbitration tribunals that issued ‘awards’
prescribing minimum wages and working conditions for all
employees and employers in a given sector or occupational
group. Until the 1990s, most workers had their wages set by an
award. This system of collective regulation built on compul-
sory arbitration and comprehensive awards was eroded by
neoliberal reforms implemented at the turn of the 21st cen-
tury, which also had the effect of weakening unions' associa-
tional power significantly. Awards continued to exist but their
purpose was now to provide a safety net for the lowest paid,
replacing their previous standard‐setting function (Cooper and
Ellem 2008; Ellem et al. 2025).
These neoliberal reforms had been inspired in part by the
advocacy of international organisations for deregulatory
labour market policies. According to McBride and Watson
(2019, 153), Australia was one of the countries—along with
other liberal market economies—that ‘enthusiastically com-
plied with the recommendations’of the 1994 OECD Jobs
Strategy discussed above. Enterprise‐level collective bargaining
and individual contracts thereafter became the main mecha-
nisms through which wages were set. Union entry rights,
which were relatively extensive under the previous arbitration
and award systems, were restricted under the neoliberal re-
forms which limited the capacity of unions to bargain effec-
tively (Ellem et al. 2025;WrightandMcLaughlin2021). The
enterprise‐focused nature of the bargaining system made it
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hard for unions to negotiate new agreements in sectors with
low coverage rates, and relatively easy for employers to avoid
or opt‐out of existing agreements, for example, through out-
sourcing and subcontracting (Pennington 2018). These ar-
rangements contributed to low wage growth and associated
social and economic problems (Andersen et al. 2023).
The mobilisation of new knowledge designed to address labour
problems of low wage growth, rising inequality and a high
proportion of workers on insecure contracts played a critically
important role in the introduction of new laws to promote
multi‐employer bargaining, which the Australian Parliament
passed in December 2022. These laws removed barriers to
multi‐employer bargaining especially in low‐paid sectors and
made it easier to establish agreements covering multiple em-
ployers in the same sector, region or business structure
(Murphy et al. 2022). In December 2023 and February 2024, the
Australian Parliament passed further laws to provide institu-
tional support for multi‐employer bargaining including by
strengthening union workplace delegates' rights, extending
multi‐employer agreements to subcontractors and penalising
employers who evaded multi‐employer collective agreements
(Wright 2024).
The laws originated in the election of the Albanese Labor
government in May 2022 on a pledge to address the above-
mentioned labour problems which were seen as contributing to
a cost of living crisis. These issues were not simply sectional
concerns affecting workers and unions, but rather were con-
nected to wider economic problems. For example, the Gover-
nor of the Reserve Bank of Australia claimed the ‘crisis’of low
wage growth had ‘contributed to below‐average growth in
consumer spending’and stagnant economic growth (Reserve
Bank of Australia 2017, 42).
In August 2022, the government organised a national Jobs and
Skills Summit where unions, business groups, community or-
ganisations, the leaders of state and territory governments and
academics were invited to discuss the challenges facing the
Australian economy. There was broad consensus—including
from business—that creating secure, well‐paid jobs and
addressing inequalities were important goals for improving
productivity and inclusive growth (Treasury 2022). Soon after
the Jobs and Skills Summit, the government announced reforms
to strengthen multi‐employer bargaining as the mechanism to
achieve these goals and address the policy problems that had
been discussed and agreed upon at the summit. The Prime
Minister later credited union movement advocacy as a key
reason for the reforms, claiming:
The union movement came to the table at our Jobs and
Skills Summit with a plan to revitalise the broken bar-
gaining system. And our Government supported bar-
gaining reforms that created the framework for some of
the lowest‐paid workers in Australia to negotiate a better
and fairer deal.
Workplace Express 2024
The failings of the existing regulatory system provided evi-
dence in support of the multi‐employer bargaining reforms.
The proportion of workers covered by enterprise‐based bar-
gaining agreements had declined markedly over the previous
decade (Pennington 2018). The barriers to multi‐employer
bargaining encouraged businesses to outsource or ‘fissure’
(Weil 2014) their organisational structure to avoid enterprise
bargaining. For example, when the enterprise bargaining sys-
tem was first created in the early 1990s, the major airline
Qantas had five agreements for each of its subsidiary compa-
nies that broadly provided parity (Bray 1996). By 2022, Qantas
had 56 enterprise agreements because the company had used
outsourcing to fissure its organisational structures. ‘Enterprise
bargaining provided a vehicle for [Qantas] management to
fragment industrial negotiations across the workforce and
pursue different strategies among different work groups’
(Sarina and Wright 2015, 694). Declining bargaining coverage
was linked to low wage growth and increased inequality since
workers covered by collective agreements had higher wages
than those who were covered only by the legal minimum
standard contained in the relevant award. Barriers to multi‐
employer bargaining and union activity that limited wage
‘flow‐ons from market‐powerful to market‐weak sectors’
(Briggs 2001, 39) were identified as necessary to strengthen
wages growth and job quality (Stanford et al. 2018). A stronger
system of multi‐employer bargaining promised to address such
problems (Burke 2022).
Despite their support for addressing the labour problems of low
wage growth and insecure work, which had exacerbated
workforce shortages, business groups voiced strong and near‐
unanimous opposition to the proposed multi‐employer bar-
gaining reforms. They claimed the reforms would lead to
strikes, unemployment and economic decline. For example, the
Business Council of Australia (2022), representing large em-
ployers, claimed:
The new multi‐employer bargaining streams will leave
workers waiting longer for pay increase …There is also a
significant risk that this bill would see large competitors
forced into lowest common denominator wage settings …
The reintroduction of industry‐wide strikes …would
cripple supply chains, leave supermarket shelves empty,
commuters unable to get to work and lives disrupted.
These arguments rested on hollow foundations. Aside from
invoking fears of a return to stagflation‐era wage‐driven price
inflation and high unemployment, there was very little evidence
to support the business groups' case.
The government marshalled unions and sympathetic minor
parties and called upon researchers to provide evidence
in support of the reform agenda. These actors presented
evidence for why multi‐employer bargaining should be
strengthened. Australia's existing industrial relations system
disproportionately favoured employers and made it hard for
workers to bargain collectively. It was easy for employers to
avoid bargaining including in sectors where unions were
strong. Acknowledgement by the Reserve Bank of Australia
(2017) that the employer‐friendly system was contributing to
low wage growth and wider economic problems provided
further support for the government's case.
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New knowledge in the form of international evidence bolstered
the government's agenda. The government noted that countries
with coordinated multi‐employer bargaining systems typically
achieved better economic and social results than countries with
decentralised bargaining systems. According to the Senate
Committee inquiry recommending support for the govern-
ment's multi‐employer bargaining reforms:
A majority of OECD member countries bargain pre-
dominantly on a multi‐employer basis, and that inter-
national research, including from the OECD itself,
suggests this form of bargaining has significant benefits,
including improved employment outcomes and gender
equality; a fairer wage distribution; and better macro-
economic outcomes and worker training.
Senate Education and Employment Legislation
Committee 2022,31
This mobilisation of new knowledge generated by the OECD, an
organisation with significant legitimacy in public policy debate
in Australia as elsewhere, neutralised business group criticisms.
It allowed government leaders to successfully articulate why the
reforms would help address longstanding labour problems. This
helped the government to gain the parliamentary support
needed to pass its multi‐employer bargaining legislation,
including from minor parties and independent parliamentari-
ans who voted for it. For example, independent Senator David
Pocock, whose support was essential for the legislation to
become law, outlined the reasons for his support in the Senate
Committee inquiry report:
This bill introduces what are almost universally
viewed as extremely welcome and long overdue re-
forms…The single interest multi‐employer bargaining
stream [reforms] are significant reforms with wide‐
ranging impacts. That's not a bad thing. Big reforms
are needed to get a big increase in wages.
Senate Education and Employment Legislation
Committee 2022, 95, 98
Connecting economic problems to living costs and developing
an evidence‐based narrative underpinned by international
knowledge was critical for winning the battle of ideas over
how the Australian bargaining system should be regulated.
While successfully mobilising new knowledge as a particular
form of ideational power was critical to this outcome, this was
contingent upon deploying the institutional power of the
Australian state and coalitional power from unions and other
key actors including community and research organisations
who provided support for the reforms (Buchanan et al. 2024;
Ellem et al. 2025).
5 | Discussion and Conclusion
Until recently, collective bargaining coverage had been declin-
ing since the 1990s in most developed economies and even
before then in some others. These trends mirrored the adoption
of ‘Washington Consensus’neoliberal policy prescriptions by
dominant international actors, particularly the World Bank and
the IMF, but also the OECD and the European Commission,
supporting decentralised collective bargaining, company dero-
gations and flexible working arrangements.
Against this backdrop, the shifts in the OECD's policy recom-
mendations in support of multi‐employer collective bargaining
for resolving social and economic problems are significant. It
would be premature to conclude that neoliberal policies are
exhausted as neoliberalism arguably remains the dominant
policy paradigm and ambiguities in policy measures exist
(Janssen 2019; Silva 2023). Nevertheless, the OECD's changed
position is noteworthy since its positive view of what multi‐
employer bargaining can deliver, first, became a core element
of the EU Minimum Wage Directive, which has the potential to
create far‐reaching changes for European industrial relations
and, second, provided the ballast for reforms aimed at
strengthening multi‐employer bargaining in non‐EU countries,
most notably Australia.
In the case studies examined in this paper, changing circum-
stances in the form of shifts in the policy context challenged
dominant views regarding the impacts of multi‐employer bar-
gaining. However, the existing orthodoxy associating multi‐
employer bargaining with negative outcomes was successfully
contested by local actors utilising the OECD's analysis as new
knowledge, and thereby an ideational power resource, in con-
junction with other power resources to successfully advocate for
policy change. These findings are summarised in Table 1.
Two factors seem especially important for explaining the nas-
cent revival of multi‐employer bargaining as a policy idea. First,
multi‐employer bargaining presented a solution to labour
problems connected to clusters of interwoven social, economic
and political problems. Linked to this were observations about
existing neoliberal policies being under pressure due to their
failure to deliver acceptable outcomes. These localised problems
were uploaded by international actors involved in global labour
governance. The OECD used its soft institutional power to
present multi‐employer bargaining not an ideological solution,
but rather as a technical and evidence‐based one, to address
problems of low wage growth and inequality fuelling populism,
and which would help labour markets and by extension
economies to function more effectively. Previously scholarship
has highlighted how ideas can be used as ‘ideological weapons’
to advance interests (McLaughlin and Wright 2024). The anal-
ysis presented here shows how ideas can also be mobilised as
authoritative forms of new knowledge providing evidence‐based,
problem‐focused solutions (Boswell 2008).
Second, new knowledge generated by the OECD was down-
loaded through a process of vertical transfer to the regional
and national levels and utilised by actors to develop
evidence‐based cases for resolving localised labour problems.
As a form of ideational power, the ‘idea’of multi‐employer
bargaining was not inherently powerful but was contingent
upon the mobilisation of other power resources by local ac-
tors. Our analysis suggests that key actors in the European
decision‐making machinery and in the Australian govern-
ment utilised coalitional power resources by working with
other political parties, unions and researchers to challenge
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employer attempts to marshal existing neoliberal orthodox-
ies. Importantly, support for multi‐employer bargaining
was contingent upon the European Commission and the
Australian Labor government utilising their hard institu-
tional power to implement reform, while other actors like
the ETUC used tailwind from the European Commission to
mobilise coalitional powers vis‐à‐vis the European Parlia-
ment and the European Council. Further research on how
international new knowledge generated at the international
level is transferred and mobilised at the local level appears
an important agenda.
To summarise our argument: the generation of new knowledge
by the international actors enabled localised policy support for
multi‐employer bargaining, with vertical transfer between dif-
ferent governance levels playing a decisive role. These findings
represent a novel contribution to industrial relations scholar-
ship which has focused primarily on horizontal policy transfer.
In explaining how new knowledge is generated and transferred,
we have also contributed new insights to power resource theory
regarding, firstly, the mobilisation of evidence‐based, problem‐
focused ideas as a distinct form of ideational power, and, sec-
ondly, the vertical operationalisation of ideational power across
governance levels.
Acknowledgements
Open access publishing facilitated by The University of Sydney, as part
of the Wiley ‐The University of Sydney agreement via the Council of
Australian University Librarians.
Conflicts of Interest
The authors declare no conflicts of interest.
Endnotes
1
Directive (EU) 2022/2041 of the European Parliament and of the
Council of October 19, 2022, on adequate minimum wages in the
European Union, 275/35.
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