Positive impact of extended collective agreements on migrant workers

Eastern European workers at onshore petroleum installations in Norway are paid in accordance with the minimum wage provided for by collective agreements. This is the main conclusion of a case study published by the Fafo Institute for Applied Social Science in October 2007. With regard to health and safety issues, the report indicates that safety is not given the same level of priority among eastern European workers as is the case for Norwegian citizens working at these sites.

Eastern Europeans working at onshore petroleum installations in Norway are paid in accordance with the minimum wage, as stipulated by the collective agreements covering the sector. This finding is seen as an indication that the introduction of a minimum wage by extension of collective agreements has proved effective. However, there is still a gap between the wage levels of eastern European workers and Norwegians working at these onshore petroleum installations. These findings are part of a report based on a case study of eastern Europeans working at two onshore petroleum installation sites in Norway, published by Fafo in October 2007 (Sikrer Norges framtid på minstelønn). The main topics covered by the case study relate to wages, employment conditions and health and safety issues.

Background

Onshore petroleum installations have provided employment for many construction workers in Norway. As new installations are being built and old ones maintained, several thousand construction workers may be working at these sites. Since the EU enlargement on 1 May 2004, labour and company migration from the new EU Member States to these installations has increased substantially. At the time of the study, about 20% of the total workforce at the surveyed sites consisted of eastern European workers, mainly Polish citizens.

The onshore petroleum installations were the subject of the first initiative to extend collective agreements in Norway, which came into force on 1 December 2004 (NO0411103F, NO0612029I). The decision covered seven installation sites and laid down minimum requirements for employees’ wages and employment conditions.

Wages

The case study shows that eastern European employees were mainly paid according to the generally applicable wage rates for unskilled construction workers. However, only 10% of those claiming to be skilled construction workers received a skilled worker’s pay. According to the Fafo report, this may be due to the fact that it is difficult for eastern European workers to obtain craft certificates from their home countries which will be recognised as being equivalent to the Norwegian certification of completed apprenticeship (fagbrev). Nonetheless, the report findings may also indicate that minimum pay is the new standard in the sector regardless of workers’ competences and experiences, and that significant pay differences exist between eastern European and Norwegian workers. The average pay in this sector of Norway’s economy is somewhere above the minimum rates provided for in the collective agreements.

Health and safety

Onshore installation sites are subject to a strict security regime similar to that found at offshore petroleum sites, while also adhering to health and safety rules found at traditional construction sites. The report shows that eastern European workers are not accustomed to the strict requirements regarding personal protection equipment, which are in force at the petroleum installations. Many of these workers consider productivity as being more important than security. Moreover, the report shows that migrant workers are not familiar with the authority of safety representatives (verneombud) in Norway. The study also reveals several factors related to the use of foreign labour that may serve to undermine workplace health and safety rules, as monitored by Norway’s health and safety administration.

Other issues

For an eastern European worker, a job at a Norwegian onshore facility represents a good opportunity to gain a higher income than that which could be obtained in their home country. Eastern Europeans working at the onshore petroleum installations rated decent wages, food and accommodation as positive aspects of the job. At the same time, the case study reveals that the great majority of eastern European workers did not enjoy their stay at the onshore installation sites. A possible explanation for this finding – as suggested by the report – may be that the eastern European workers did not feel that they were being treated like equals, neither by their Norwegian colleagues nor by company management. Other factors may relate to the fact that the work is often conducted in bad weather, far away from densely populated areas, and that workers are away from their families over longer periods.

Commentary

While this Fafo report shows that eastern European workers at onshore petroleum installations are mainly paid in accordance with the provisions of the extended collective agreements, it is not possible to conclude that this is also the case at more traditional construction sites. The building of petroleum installation sites is often considered to be a rather prestigious building activity, which is mainly carried out under the responsibility of large companies. These companies lay down a lot of resources, in order to ensure that all minimum requirements are complied with. The situation at traditional construction sites may vary far more considerably, particularly in relation to wage and employment conditions (NO0704019I).

Kristin Alsos, Institute for Applied Social Science, Fafo