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The Nordic model represents a partnership between employers, trade unions and the government, whereby these social partners negotiate the terms to regulating the workplace among themselves, rather than the terms being imposed by law.

Through collective bargaining, agreements are reached which apply industry-wide. Employers accept the trade unions' right to organise workers, while the trade unions accept that the employers have the right to manage and allocate the work.

The model assumes that both the trade unions and the employer organisations are representative. From an international perspective, the level of organisation among employees is extremely high in the Nordic countries, between 50 and 80 %.This is also the case among employers.

The Nordic model is supported by the state pursuing an active employment policy. It is based partly on keeping unemployment low and partly on improving the chances of the unemployed of finding a job through the provision of training.