Disagreement over proposed amendments to the Labour Dispute Act

Download article in original language : NO9706112FNO.DOC

The Norwegian labour market parties have, during spring 1997, been commenting on the proposed principles for a revision of the Labour Dispute Act. The committee which reviewed the Act proposed a strengthening of the confederations' position with regard to collective bargaining. Although the Norwegian Confederation of Trade Unions (LO) and the Confederation of Norwegian Business and Industry (NHO) basically support the proposal, there is significant opposition to it, particularly from several employee organisations.

Proposed new principles for the Labour Dispute Act

In 1993 the Ministry of Local Government and Labour asked the Labour Law Commission to review the Labour Dispute Act, and in particular the fundamental principles on which the Act is based. The Labour Law Commission is a permanent committee with representatives from the Norwegian Confederation of Trade Unions (LO), the Confederation of Norwegian Business and Industry (NHO) and the Government. The Norwegian Labour Dispute Act regulates a number of questions related to collective agreements, collective bargaining and industrial conflicts. The Act contains detailed regulations regarding the obligation not to take industrial action (the peace obligation) and the circumstances in which industrial conflict may take place. However, the Act is not explicit with regard to who has the right to demand negotiations and be party to a collective agreement. The Ministry asked the Commission to focus particularly on those circumstances where there are competing trade unions within the same collective agreement area. The current review marks the first major debate regarding the Act's fundamental principles since it was passed in 1915.

Three years passed before the Labour Law Commission submitted its recommendation (NOU 1996:14). The most important proposals were as follows:

• collective wage agreements which are agreed upon by the employee confederations may not be derogated from by an independent union - ie an employer may not conclude an agreement with an independent employee organisation which deviates from an agreement which has already been concluded with an employee confederation. Agreements which are concluded in conflict with this principle of "inderogability" may be deemed as invalid;
• within the municipal sector, all employee organisations within a confederation shall be covered by the same ballot - ie trade unions may not on an independent basis take industrial action. This resembles the system which is in use in the state sector;.
• only the confederations on the employee side shall have formal rights to demand bargaining. Independent unions could, however, participate where bargaining had started; and
• for a confederation to have extended rights according to the Act - eg, to demand bargaining and conclude agreements from which agreements with independent union cannot derogate - it must represent at least 100,000 members covering more than one branch/sector and have the authority to represent the trade unions which are members of the confederation.

An important reason for the proposed amendments, is that Norway has been criticised by the International Labour Organisation (ILO) for having used compulsory arbitration in situations where it was doubtful whether the conflict put life and health in danger (the ILO sanctions such intervention only in such cases). The Labour Law Commission expressed concern about the use of the strike weapon by trade union federations to achieve better agreements than those already agreed upon by the employer and (the majority of) the confederations on the employee side. The Commission believes that by strengthening the authority of the confederations and by strengthening the principle of inderogability, there will be fewer industrial conflicts of this type. The wish to secure increased influence for the confederations also stems from the wish "to safeguard that wider societal interests are ensured in the wage settlements".

The comments from the labour market parties

The Labour Law Commission's recommendation was sent to the labour market parties in order for them to comment on the proposals.

On the employee side, LO and the Confederation of Vocational Unions (YS) support the central proposals in the recommendation. However, the recommendation has met with massive opposition from independent trade unions, from the Federation of Norwegian Professional Associations (AF) and from several unions affiliated to YS and LO.

On the employer side, NHO supports the main features of the recommendation. In the remaining employer organisations, the points of view vary somewhat. The Norwegian Association of Local Authorities (KS), which bargains on behalf of municipalities which employ approximately 350,000 persons, expresses support for the recommendation's proposals regarding the ballot system in the municipal sector. A number of smaller employer organisations are more sceptical about some of the major features of the recommendation, amongst others the emphasis which is placed on wage agreements concluded between the confederations.

Commentary

Even though the Labour Law Commission was unanimous in its recommendation regarding the principles which are to form the basis for a new Labour Dispute Act, it is far from certain that the existing Act will be significantly amended. A majority of the employee organisations not affiliated to LO oppose the Commission's proposals. In addition, several employer organisations are sceptical about parts of the recommendation. Significant scepticism from several of the political parties in the Norwegian Parliament is also anticipated.

Opponents criticise both the contents of the recommendation and the composition of the Labour Law Commission which delivered the recommendation. Many employer organisations are concerned that the proposal will entail a further centralisation of power; partly from independent trade unions to confederations and partly from individual unions to the confederation level. If collective wage agreements concluded between the confederations are given priority, there is a risk that the confederations will also be the dominant negotiating party for the union organisations' own agreement areas.

The recommendation is also criticised for showing particular deference to LO's and NHO's interests. LO already has the authority which is envisaged for the confederations in the proposals, while AF and YS must change their constitution to comply with the proposals. Such a change is not unproblematic. Many of AF's and YS's member organisations explicitly chose to join confederations which did not have such strong joint institutions as those in LO. For many observers, the resistance to the proposals among employer organisations not affiliated to NHO is surprisingly strong. One explanation could be a fear that the proposals will further entrench NHO's strong position at the cost of other smaller employer organisations. Several of the employer organisations which have concluded agreements with independent unions also express concern on behalf of their negotiating partner. Many organisations are also critical of the fact that it was only LO and NHO which held seats in the Commission which reviewed the Act, and emphasise that broader representation in the remaining process is needed.

One reason for the proposed amendments is the need to avoid the use of compulsory arbitration, a practice which has been repeatedly criticised by ILO. The logic is that by making it more difficult to take lawful industrial action, the need to use compulsory arbitration will decrease. In a recent judgment, the Norwegian Supreme Court ruled that current practice with compulsory arbitration was not in violation of Norwegian law nor of Norway's obligations vis-à-vis international law (NO9704109N). However, it is uncertain what effect this ruling will have on the further deliberations on the proposals. Many organisations, on both the employee and employer side, in addition believe that the principles of "representativity" and rules regarding inderogability outlined in the recommendation may be in conflict with the relevant ILO Conventions.

It is anticipated that the Labour Party will support the main principles in the recommendation, but that several of the other political parties will have reservations regarding the proposals which have been put forward. The political parties to the left of the Labour Party are generally sceptical about measures which entail a centralisation of power which benefits the confederations. Traditionally, the conservative parties have been opponents of measures which increase LO's powers relative to organisations not affiliated to LO. It is highly uncertain whether these parties will be influenced by the fact that the dominant organisation on the employer side, NHO, has supported the main features of the recommendation. Owing to the parliamentary situation, a revision of the Act will probably need the support of the political parties in the centre. Although these parties are also sceptical about centralisation, which the proposals will entail, the Labour Party has on several occasions sought and won support from these parties in its incomes and labour market policies.

Since the recommendation has basically focused on which sets of principles are to govern new legislation, the task remains to turn some or all of these principles into substantive legislative proposals. This will entail a new consultation round where the labour market parties may express their opinions. Several organisations have also demanded that the current Act be reviewed anew. A possible change in government following the parliamentary elections this coming autumn will also influence the future of the proposals. More time is therefore likely to pass before the current Act is revised, if it is revised at all. (Kristine Nergaard, FAFO Institute for Applied Social Science)