Procedure whereby the Minister for Social Affairs and Employment is empowered to declare the provisions of an industry-level agreement generally applicable to the entire industry. This procedure is invariably applied for and granted. It means that the agreement in question is then binding on all employers in that particular industry, whether or not they belong to an employers' association. The procedure is intended to promote collective bargaining . It protects the agreement concerned against underbidding, more particularly by non-organized employers (who are not bound by the industry-level agreement itself), and so reduces wage competition in the labour market.

Such extension of the provisions of an industry-level agreement is subject to a number of conditions.

To qualify for extension, the agreement in question must be deemed sufficiently representative of the particular industry concerned (see representativeness ), defined by the Extension of Collective Agreements Act as meaning that it must already apply to a significant majority of the people working in that industry, i.e. the number of employees working for employers who are already bound by the agreement as against the number working for employers in the industry who are not bound by it.

Extension is possible only at the request of one or more parties to the agreement (whether individual employers or employers' associations or trade unions). Before proceeding with the matter, the Minister obtains the opinion of the Labour Foundation on this request.

Certain provisions which may otherwise be lawfully included in collective agreements may not be declared generally applicable via extension. These include provisions intended to: a) exclude a ruling by the courts; b) exert pressure on employers or employees to join an employers' association or a union; c) bring about unequal treatment of unionized and non-unionized employees.

The extension procedure is currently under review.

Please note: the European industrial relations glossaries were compiled between 1991 and 2003 and are not updated. For current material see the European industrial relations dictionary.