While many OECD countries have taken steps towards decentralisation in the past two decades, recent OECD evidence (OECD, 2019[1]) has shown the benefits that a sector-based bargaining can have in labour markets, notably when they leave space and flexibility to adjust at firm-level (the so-called organised decentralisation systems).
The Fair Pay Agreements (FPAs) introduced in New Zealand in 2022 were about creating a new, modern, sector-based bargaining system that supports fair, safe, and productive workplaces. The FPAs model, which was built on the OECD evidence, provides important insights for introducing sectoral bargaining in Chile, notably the importance of Government financial and training support to each bargaining side and of providing a broad coverage of agreements, possibly through the use of extensions. On this latter aspect, the 2017 French labour market reform provides useful examples for limiting the potential negatives effects of administrative extensions. Finally, the existence of institutions, such as the mediation offices in Sweden, in mediating labour disputes or the New Zealand’s ERA tribunal in stepping into the bargaining process if no representation could be found for employers, or if agreements failed, can also provide further inspiration and insights for Chile.