Popular accounts of labour market reforms in Western Europe have identified a process of dualisation over the last three decades, whereby service sector employ-ment has been deregulated while workers in the core manufacturing sector still en-joy high levels of employment protection and high wages. Two different labour market logics are thought to be in place between core and peripheral sectors and to co-exist in a stable equilibrium nurtured by the co-incidence of interests between capital and labour in core manufacturing sector, who jointly acted to safeguard workers in core sectors at the expense of peripheral service sectors. Building on the case studies of labour market and vocational training reform in Germany, this ar-ticle challenges this account. It is argued that processes of dualisation are best conceptualised as the contested outcome of a political conflict between capital and labour. Dualisation is not a stable equilibrium but rather the result of bargain-ing processes between employers who push for liberalization and unions who try to prevent it or - at least - mitigate it.
Keywords: Trade unions, labour market, dualisation