Public committee will evaluate collective bargaining system

In late May 1998, the Norwegian government appointed a public committee to review the workings of the present collective bargaining system and the framework for pay determination. The committee comprises representatives from all the major social partner organisations, and will submit its report at the end of 2000.

The Norwegian government appointed a public committee on 28 May 1999, to review the present system of collective bargaining and the framework for pay determination. The committee's mandate is to:

  • undertake a general analysis of the operation of the present system;
  • include in its analysis the private, municipal and state sectors; and
  • reveal weaknesses and strengths with regards to both the legal framework and collective bargaining arrangements and, if any weaknesses are revealed, to propose appropriate measures for improvement.

The committee has also been asked to consider the extent to which the existing report by the Labour Law Commission (Arbeidsrettsrådet) will contribute to the resolution of any problems which might be identified in the collective bargaining system. In 1996, the Labour Law Commission proposed several amendments to the Labour Disputes Act (NO9706112F), but the government has so far not taken any initiative to follow these up. The committee is also instructed to evaluate other alternative proposals for changes to the collective bargaining system which have been put forward during the last year (NO9811101N). It is stressed, however, that the committee is in no way bound by any of the previous proposals.

The committee has two neutral members, among them its chair, Ingse Stabell. The other committee members are drawn from social partner organisations, with five representatives from the employee side, and five from the employer side. All four main trade union confederations are represented, with the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO) allotted two representatives. In addition to the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO), there are also employer representatives from the Commercial Employers' Association (Handels- og servicenæringens Hovedorganisasjon, HSH), the state sector, the municipal sector and the employers' organisation representing independent public enterprises.

The committee is to submit its report at the end of 2000. If the committee find that there is a need for changes to the legal framework, it is asked to submit a proposal for a new legal text.

The Labour Law Commission is abolished

The new committee, which is only temporary, will replace the Labour Law Commission, which was not reappointed after its period of operation had expired at the turn of the year 1998/9. The Labour Law Commission, which was a permanent committee, had been in operation since 1960, and had as its main task to advise the government on issues concerning labour law, including matters concerned with the Labour Disputes Act. Only LO and NHO were represented on the commission. This practice was recently criticised by the other social partner organisations, which have gradually strengthened their position vis-à-vis LO and NHO in terms of membership.

The Labour Law Commission came to prominence during the summer of 1996, when it put forward a proposal for changes to the Labour Disputes Act. The Commission wanted to see a strengthening of the main confederations' formal role in the bargaining system. To achieve this, the Commission proposed that an employer could not conclude an agreement with an independent trade union which deviated from an agreement which had already been concluded with a trade union confederation (the principle of "inderogability"). The Commission's basic line of argument was that such legal changes would reduce the number of labour disputes in which one organisation resorted to strike action, in order to achieve a better agreement than that already agreed to by other organisations. The Commission paid particular attention to the municipal sector's system of collective bargaining. The new committee believes that these changes would also contribute to reducing the relatively high propensity to use compulsory arbitration in Norway, a practice which has been criticised by the International Labour Organisation (ILO) (NO9812104F).

Commentary

The decision to establish a new committee to review the present collective bargaining system was taken at a meeting between the government and the labour market parties in December 1998 (NO9812117N). The meeting also paved way for a revitalisation of the cooperative venture on income policy, the so-called social pact. The bargaining committee is but one of several which have been established during spring 1999 (NO9903123N) as a result. The new committees are characterised by a much broader representation from social partner organisations than previously.

The Labour Disputes Act came into being in 1915, and has not undergone significant changes since then. The Act regulates, in addition to labour conflicts, first and foremost the various industrial relations institutions, such as the role of the State Mediator and the Industrial Disputes Court. Many aspects of the system of pay negotiations are not regulated by law, but by agreements between the labour market parties, and by informal practice. This means that the bargaining arrangements in the relatively large municipal sector, for example, where negotiations take place between the employer organisation and the four union bargaining cartels, are based on voluntary agreements. The practice of compulsory arbitration is not regulated by the Labour Disputes Act, but is invoked by law in each individual case.

The Labour Law Commission justified its proposals on the grounds that the present collective bargaining system generates too many labour disputes, and too much compulsory arbitration, particularly in cases where several organisations compete with each other. The commission's report was met with criticism from those organisations which were not represented on the Commission. They argued that the proposals would strengthen LO and NHO at the expense of the other organisations.

The appointment of a new committee to review the bargaining system seems to indicate that the government does not intend fully to accept the advice of the Labour Law Commission, but instead to have the whole issue considered once more. The parties in the coalition government gave a lukewarm reception to the Commission's proposals, among other reasons because they are likely to strengthen the position of the main confederations at the expense of smaller independent organisations. At the same time, it will be difficult for the government to ignore the fact that the large organisations, such as LO and NHO, have already unanimously recommended changes to the present legal framework. The 1998 pay settlement directed attention towards the way in which the present collective bargaining system works, because it produced a much larger growth in pay than expected (NO9902116F). Several strikes also occurred in the municipal sector, where a number of bargaining cartels proved to be divided.

It remains an open question as to the extent to which the committee will find it necessary to propose changes to the present legal framework, or indeed to the collective bargaining system itself. The 1999 pay settlement indicated that it is still possible to pursue moderate wage settlements without resorting to industrial action (NO9904126F). Furthermore, the broadly representative committee will also have differing views about the problems of the present bargaining system. Many organisations believe that the increased propensity for conflict in the municipal sector can be explained by the fact that there is a weak formal recognition of some bargaining cartels. Others claim that the main reason is that the bargaining system discriminates against certain groups, particularly those with a higher level of education, which leaves them worse off. (Kristine Nergaard, FAFO)

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