The social partners in several leading sectors in the Norwegian private sector had concluded new collective agreements by mid-May 1998. It is evident that spring 1998's settlements will result in higher increases in pay than the Government had expected.
Most of the national industry-level collective agreements in Norway were due to expire in the spring of 1998. In February, the general council of the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO) decided that pay settlement negotiations within the area covered by LO and the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO) should take the form of industry-level settlements, in which negotiations take place between the individual LO unions and the individual associations of NHO (NO9802150F). Consequently, a wide range of agreements were to be negotiated in spring 1998. Thursday 14 May witnessed the first labour dispute when bus drivers belonging to the Norwegian Transport Workers' Union (Norsk Transportarbeiderforbund, NTAF) and the Norsk Rutebilarbeiderforbund which is affiliated to the Confederation of Vocational Unions (Yrkesorganisasjonenes Sentralforbund, YS) took strike action. There are more negotiations to come - including those in the public sector.
Preliminary results of 1998's negotiations
Changes in rates of pay - some leading sectors
As is traditional, the year's pay negotiations began in the metalworking industry with the agreement between the Norwegian United Federation of Trade Unions (Fellesforbundet, FF) and the Federation of Norwegian Engineering Industries (Teknologibedriftenes Landsforening, TBL). It is the largest agreement within the LO-NHO area. The parties agreed on a general increase in pay of NOK 3.00 per hour. The minimum wage rate and the rates for shiftwork were also adjusted. Employees in metalworking have the right to additional workplace (company-level) negotiations, and as such the central negotiations will be supplemented by negotiations at company level. (NO9804162N)
Another major sector which arrived at a settlement was the retail and wholesale trade. The Norwegian Union of Commercial and Office Employees (Handel og Kontor, HK), which is affiliated to LO, and the Commercial Employers' Confederation (Handels- og Servicenæringens Hovedorganisasjon, HSH), negotiated an agreement allowing for a general pay increase of NOK 5.00 per hour. This industry is regarded as a low-pay sector.
Employees in hotels and restaurants do not have the opportunity of additional workplace negotiations. They received a general pay increase of NOK 3.00 per hour, and a low-pay bonus of NOK 2.00 per hour. For some groups, wage rates were increased even further, and the lowest-paid groups secured increases of approximately NOK 15,000 per year. Funds were also set aside to level out differences in pay between men and women. The allocation of these funds will take place at company level, and is dependent on the establishment of agreements on gender equality within the individual companies (NO9804163N).
Pay increases in the construction industry amounted to NOK 3.00 per hour. Minimum wage rates within this area, however, increased by approximately NOK 11.00. Such minimum wage rates in construction are of little significance at present, but may well play an important role in periods of slumps and recession.
Other issues
The wage negotiations have not led to any changes in working hours (NO9803157N). The bargaining parties in metalworking have, however, asked LO and NHO to consider new working time arrangements, in which the needs of employees for flexibility in their working life as well as the companies' needs for flexibility in the face of increasing competition are taken into account. This formulation has also been incorporated into other agreements. Employees in metalworking were given the right to paid leave of absence for the purpose of taking children to school or nursery on their first day. This provision has also been incorporated into other agreements in the private sector. The parties in metalworking would also like to see it made easier, both at central and local level, for immigrants to choose jobs in this sector. Similar formulations are incorporated into other collective agreements.
Prior to the industry-level negotiations, centralised negotiations between the LO and NHO were held on several joint issues, of which the most important related to continuing vocational training. The parties reached agreement on a joint plan of action on this issue (NO9804161F). Minor adjustments were also made to the industry-level funds for early retirement with a readjustment of company membership fees, and the introduction of a one-year pause before the early retirement scheme takes effect.
Remaining negotiations
The negotiations in the private sector, and especially the agreement reached in the hotel and restaurant sector, have served to raise expectations for negotiations in the public sector. The Federation of Norwegian Professional Associations (Akademikernes Fellesorganisasjon, AF) originally claimed that pay increases in the public sector should be 2% higher than in the private sector, and calculated that this would imply an average increase in pay of approximately NOK 25,000 per annum for its members. Claims submitted by the other main confederations are lower, but substantial gaps still remain between what they are claiming and the employer's first offer of approximately NOK 3,000 per year. The Prime Minister, however, has signalled that the public sector employers' offer is likely to be increased during mediation procedures. If the parties are then unable to agree, there may be a strike from midnight on 27 May 1998.
Several sets of negotiations remain to be concluded in the private sector, and they are expected to last throughout May and June. In many of these, however, the settlement in metal cases may influence the outcome. The parties may, however, decide to make adjustments to other parts of the agreement.
Commentary
Spring 1998's agreements at industry level have so far been concerned with pay increases, and there have not been any major changes to working hours and related issues. The agreement between the LO and NHO on a joint plan of action for continuing vocational training will not have any economic implications for the 1998 pay settlement.
Representatives from the employers' organisations fear that the 1998 pay settlement will undermine the competitiveness of Norwegian trade and industry. The settlement in the hotel and restaurant industry in particular has received much criticism. However, the employers' side seems to realise that the booming Norwegian economy, together with the present labour market situation, are important contributory factors to the high level of pay settlements this year.
It is already evident that the 1998 wage settlement will lead to a higher growth in pay than the Government estimated in the national Budget, in which it was stated that it should be limited to 3.5%. There has been speculation suggesting that this year's pay settlement will lead to a tightening of government expenditure, and both the Prime Minister and the Minister of Finance have expressed concern about the "overheating" of the Norwegian economy. Employers and trade unions in metalworking have minuted a statement into their new agreement which warns the Government against taking such restrictive measures on the basis of the pay settlements. FF and TBL argue that their agreement "is in line with the intentions of the solidarity alternative, and for that reason does not necessitate any tightening of present tax and revenue policies". There is a stronger statement in the agreement between HK and HSH which provides for the right of the union to demand renegotiations on pay if changes in rates of taxation exceed the levels set out in the 1998 government Budget. (Kristine Nergaard, FAFO Institute for Applied Social Science)