Decentralization of collective bargaining has become widespread in developed economies, and EU policies have pushed this trend further. We use process-tracing methodology to explore the consequences of decentralization for the reproduction of partnership bargaining relations at company level. We compare two cases of decentralized bargaining in manufacturing, one in Denmark and one in Australia. Agreement-based decentralization seems to offer better process conditions for reproduction of local partnership compared to decentralization regulated by law. This implies that future decentralization measures should be negotiated rather than imposed.