During the 1920s and 1930s the trades unions moved away from the idea of class struggle and towards cooperation with the peasants and middle classes.

A breakthrough in industrial relations came in 1937, with the signing of the so-called "peace accord" between employers and workers in the metal working industry, under which the two sides agreed to negotiate when they had disputes, rather than resort to strikes and lock-outs.

During the Second World War, unlike the First, men who were mobilised received compensation for loss of earnings - a system which laid the foundation for the system of social benefits in force today.