1997 Annual Review for Norway

This record reviews 1997's main developments in industrial relations in Norway.


In 1997, GDP growth stood at 3.9%, or 3.5% for mainland Norway (offshore sector excluded). The consumer prices index rose by 2.5%, compared with 1.3% in 1996. The 1997 unemployment rate was 4.2%, against 4.9% for 1996. In 1997, Norway had a central government surplus of NOK 65.8 billion (ECU 8.2 billion). However, if revenues from the petroleum sector are excluded, Norway had a public budget deficit of NOK 20.2 billion (ECU 2.5 billion). The surplus will be transferred to the Government Petroleum Fund.

Norway has seen a rapid growth in employment over the past few years, and the number of employed persons increased by 200,000 from 1993 to 1997 (according to Labour Market Survey figures). During the fourth quarter of 1997, 72.7% of the population between 16-74 years of age were employed, against 71.5% during the same quarter in the previous year. During the last quarter of 1997, the unemployment rate stood at 3.3%, compared with 4.2% during the last quarter of 1996. The number of persons participating in employment schemes has been significantly reduced, and at the end of 1997, "ordinary" employment schemes involved 25,000 persons (1.1% of the labour force).

During 1997, unemployment also fell for those groups with the most significant labour market entry problems (immigrants and young people). However, the unemployment levels for these groups are still significantly higher than the average. People below the age of 20 years have a right to either schooling or a placement in an employment scheme, while those below the age of 25 years are given priority in the employment schemes. In total, 18,000 persons, or 0.8% of the labour force, were registered as long-term unemployed (ie unemployed for six months or more) at the end of 1997. The unemployment rate amongst men is somewhat higher than amongst women.

Approximately one quarter of all employees, and almost half of all female employees, work part-time. The fact that many "typically female" occupations such as nursing and pre-school teaching is pervaded with part-time working is seen as a problem, since there is shortage of labour within these occupations.

Up until the parliamentary elections in September 1997, Norway had a minority Labour Party (Det norske Arbeiderparti) Government. After the elections, a new minority Government, representing the Christian Democratic Party (Kristelig Folkeparti), Centre Party (Senterpartiet) and Liberal Party (Venstre), took office. The new Government has not significantly altered labour market policies and has signalled that it wishes to continue to cooperate with the labour market parties (NO9710129N).

Key trends in collective bargaining and industrial action

Wage growth for 1997 was estimated at 4.25%, while the growth in real wages after taxes was estimated to be 1.8%. Most of the current wage agreements in Norway are of two years' duration and expire in 1998. The 1997 bargaining round was therefore a "mid-term" settlement in which the parties mainly negotiated over remuneration levels. In addition, an agreement was reached on the implementation of a 1996 accord making it possible to retire from the age of 62 years (NO9704108F).

Industrial relations, employment creation and new forms of work organisation

Issues relating to labour market flexibility are frequently discussed among Norwegian politicians and the labour market parties. Generally, Norwegian legal provisions within this area may be characterised as restrictive, though they do allow for a fair number of exemptions. Proposals to soften statutory provisions regarding the "leasing" of labour (NO9708118F), regulating overtime work, requiring employment relationships generally to be permanent, and restricting private placement services (NO9801144F) have so far not received sufficient political support in Parliament (NO9802151N).

The employers' organisations would like greater flexibility with regard to types of employment (permanent/temporary/leased) and working hours, mainly in order to utilise labour more efficiently and to reduce overtime costs. The 1997 congress of the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO) opened the possibility of the unions discussing more flexible hours arrangements, though stressing that these must be regulated through collective agreements (NO9705110F).

Developments in representation and the role of the social partners

The 1994 European Union European Works Council (EWC) Directive applies to Norway by virtue of its membership of the European Economic Area. It was implemented through a 1995 collective agreement which since has been supported by legislation (adopted in 1996). The principal elements of the EWC Directive are thus included in the Basic Agreement between LO and the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO) (Basic Agreements between the various confederations lay down the principles and procedures that regulate the relationship between the labour market parties). Some 20 Norwegian-based enterprises are required by the Directive to implement some sort of employee representation at the European level, and most of these had already established EWCs before the Directive became effective.

During the renegotiation of the Basic Agreement between LO and NHO which took place in 1997, new provisions regarding the rights of trade union representatives at the overall concern level ("concern representatives", who may be elected in concerns with more than 200 employees) were included in the Agreement. This means that concern representatives now have the same rights as other union representatives under the Basic Agreement (NO9711134F).

There was a discussion during 1997 regarding the proposed amendments to the Labour Dispute Act which were presented by the Labour Law Commission in 1996. The Commission proposed a strengthening of the confederations' role. One of the objectives would be to reduce the number of competing wage agreements. The proposal was strongly criticised by the majority of the organisations not affiliated to LO and NHO and the Government has so far not decided on how to follow up the Commission's recommendations (NO9706112F).

In the 1997 revision of the Basic Agreement between LO and NHO, the parties agreed to a provision stating that a minimum level of membership (10% of the workforce) is required before a union can demand a wage agreement. If there is already a wage agreement at the workplace concerned, the membership requirement for the new organisation is 30% of the employees (NO9711134F). The provision may entail that it will become more difficult to have competing wage agreements at the same workplace. NHO's request that similar provisions be included in the Basic Agreement between NHO and the Confederation of Vocational Unions (Yrkesorganisasjonenes Fellesorganisasjon, YS) succeeded only on the 10% threshold and not on the 30%, and the issue will probably be on the agenda in the spring 1998 wage negotiations (NO9802152N).

During autumn 1997, seven of the trade unions affiliated to the Federation of Norwegian Professional Associations (Akademikernes Fellesorganisasjon, AF) disassociated themselves from it and established a new confederation together with the independent Norwegian Medical Association (Den Norske Lægeforening) (NO9711133F). The new confederation - Akademikerne- aims to represent academics and professionals with university degrees. The year ended with a disagreement between AF and Akademikerne as to the latter's right to participate in bargaining in the spring 1998 wage settlement (NO9803158N.)

Industrial relations and the impact of EMU

Norway is not a member of the European Union and there has not been a major public debate regarding EMU. It is expected that the Government will review issues relating to EMU when presenting the revised national budget in the spring of 1998. The general impression so far is that Norway's compliance with EMU will not require significant changes in economic policies or industrial relations.

Conclusions and outlook

For Norway, 1997 was a year without substantial changes in industrial relations and labour market regulation.

There is a considerable amount of tension associated with the spring 1998 wage settlement, when the two-yearly wage agreements are to be renegotiated. The 1998 settlement in the private sector is to be conducted as a sector-level settlement (NO9802150F). A central question is whether or not the parties are willing and/or able to continue the line of moderation which has been followed over most of the 1990s. It is feared that the favourable economic climate and a tight labour market will unleash high wage increases which, together with planned social reforms, will be inflationary and weaken the Norwegian economy in the long run.

Another central question is the role the right to further training and education will come to play during the negotiations. This issue was much discussed during 1997 (NO9710127F), and it was for a long time expected that a reform in this area would be an important element in the 1998 wage settlement. The public committee which was commissioned to look into the question proposed a relatively moderate reform which was to be implemented gradually and in close cooperation with the labour market parties. The Government was due to present its White Paper on further education and training during the spring of 1998.

(Kristine Nergaard, FAFO Institute for Applied Social Science)

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