Freedom of association and collective bargaining are both fundamental labour rights and enabling rights, which allow for the enjoyment of other fundamental rights at work. Trade unions and collective bargaining rights are also powerful labour market institutions, as they shape wage formation, reduce inequality, sustain domestic demand, and help align productivity growth with social progress rather than capital concentration. This proposal therefore responds to the weakening of collective bargaining power, leading to wage inequality, labour market segmentation, precarious employment, and a growing gap between productivity and wages. Sectoral collective bargaining — defined as bargaining conducted at the industry- or economic branch-level — can address these structural challenges by establishing standards in wages and working conditions across firms. In opposition to current dynamics that encourage competition based on lowered labour costs, strengthened freedom of association and collective bargaining institutions can support fair competition while improving wage distribution and working conditions. The proposal suggests strengthening frameworks including: legal frameworks for sectoral bargaining that include SMEs; extension mechanisms; social partner capacity support; sectoral agreements; and coordination with public policy. Strengthened sectoral collective bargaining can increase wages, reduce inequality, improve working conditions, and help ensure that productivity gains are shared more fairly, whether economies are expanding rapidly or not.
