Abstract: Developments in public‐sector industrial relations during 1993 have raised questions about unions, pay determination and conflict resolution. This review explores some of the tensions in these areas created by new restrictions on pay increases, changes in reward structures and further market‐testing across services. Where the different forms of pay determination buy industrial peace, the price may be too high in terms of the productivity and efficiency requirements gains now being demanded. But co‐operation is needed too, and the dilution of the Whitley system of collective bargaining may be more likely to produce the very co‐operation embodied in its philosophy, but not always present in its practice. The new ‘superunion’ UNISON will play a role here, as single‐table bargaining and even single‐union deals develop. These institutional developments will also be affected by pay flexibility measures which endeavour to improve individual performance at the front line of services, while in practice increasingly giving the reward