The 1998 bargaining round will be at industry level

Download article in original language : NO9802150FNO.DOC

At its general council meeting on 10 February 1998, the LO trade union confederation voted in favour of industry-level settlements in the spring 1998 bargaining round in Norway's private sector. In addition, LO wants to bargain with the NHO employers' confederation over the principles which are to apply to the forthcoming reform of further education and training. LO would like to see these negotiations finalised before the sectoral bargaining commences, but NHO has rejected such talks.

During the first half of February 1998, the social partners' central confederations decided on the principles which are to apply in the forthcoming collective bargaining round in the private sector (NO9801145F). This settlement covers approximately 300,000 employees in industry, building and construction, transport and the hotel and restaurant sector. Particular attention was given to the type of settlement chosen - ie if the wage agreements between the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO) and the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO) should be bargained over by the two confederations themselves, or if LO's affiliated union federations and NHO's branch associations should negotiate the sectoral wage agreements on a one-to-one basis. Another important question is what role questions relating to the forthcoming reform of further education and training (NO9710127F) should play in the wage negotiations.

LO favours industry-level deals

At its meeting on 10 February 1998, LO's general council voted in favour of industry-level settlements in the spring 1998 bargaining round. This entails that the trade union federations affiliated to LO and NHO's branch associations will negotiate separately over each agreement. However, LO would like to negotiate with NHO directly, at the confederation level, over the principles to apply to the further education and training reform. LO would like to finalise these negotiations before the industry-level bargaining commences and would also like to see these negotiations taking place under the terms of the peace clause - whereby the parties may not take strike action during the negotiations. In addition, LO would like to negotiate with NHO over the principles which should apply to apprentices' wages.

As is customary, LO's general council also voted over the guidelines which are to apply to the industry-level negotiations. LO is demanding increased purchasing power for all of its members, favouring groups which earn below NOK 250,000 per year. However, LO would still like to see moderate wage growth so as not to place the country "out of step with the rest of the world". LO will initiate discussions regarding flexible working hours, and would like the parties to examine more closely different types of arrangements covering holidays, shorter working hours, and leave for the purpose of childcare and education. LO is demanding a clause in the agreements ensuring the right to renegotiations if changes to fiscal policy (taxation) are introduced which have not already been foreseen in the 1998 state Budget.

LO would also like to see something done about "unreasonably high personal incomes". LO will initiate talks with the Government and propose that measures be introduced to increase employer's tax for the highest salary groups and increase income taxes for self-employed groups with high personal incomes.

YS stresses coordination

On 4 February 1998, the forthcoming wage settlement was on the agenda at the central board meeting of the Confederation of Vocational Unions (Yrkesorganisasjonenes Sentralforbund, YS). YS is demanding real wage growth for all of its member groups. It would like to see a levelling out of wage disparities between women and men, and believes that groups which stand to gain from this policy should receive higher increases compared with other groups. A fair proportion of those concerned are women employed in the public sector. YS would also like to see a reduction in working hours for parents with young children, and is particularly concerned about providing fathers with a real opportunity to spend more time at home for childcare purposes. YS is positive about further education and training reform, but is not willing to give this reform priority during the negotiations if the Government is not willing to make explicit what its contribution to the reform will be.

In principle YS supports industry-level settlements, and the central board has decided that this year's settlement should also be at this level. However, the board emphasises that in this year's settlement there is a "need for tight coordination between the federations of YS and its sections".

NHO responds

The principles for the forthcoming negotiations were adopted at NHO's central board meeting on 11 February 1998, the day after LO's general council meeting. The results of the meeting are by and large NHO's first reply to LO's demands. NHO emphasises that wage growth must not be higher than among Norway's competitors, thereby indicating that total wage growth for 1998 should not exceed 3.5%. In addition, NHO's central board emphasises that the branch associations must ensure that firms take responsibility with regard to the remuneration of managers, senior staff and other groups with strong market positions.

NHO's central board decided that it is not willing to negotiate with LO regarding the reform of further education and training, ahead of the industry-level settlements. The employer organisation believes that LO's proposed negotiating programme will not ensure that any reform can be implemented within a reasonable financial framework.

NHO does not reject LO's proposal to examine more closely different schemes to increase flexibility, but emphasises that the schemes must not result in a further reduction in employment. NHO rejects LO's proposed clause which would secure renegotiations in the event of unexpected changes to fiscal policy.


A central question in this year's negotiations is the type of settlement to be arrived at. Traditionally the question of the type of settlement is left to LO, which decides on this when adopting its bargaining demands. LO sees the type of settlement as a practical issue which has to be resolved prior to each settlement. The last two main settlements (1994 and 1996) were at industry level. LO's decision that the forthcoming settlement is also to be at this level means that Norway will experience the third industry-level settlement in a row. LO's decision regarding industry-level settlements was unanimous, despite the fact that LO's elected officials and several of its federations within the private sector had wanted a centrally coordinated settlement, which would have made it easier to win acceptance for further education and training reform. However, LO's largest private sector federation, the United Federation of Trade Unions (Fellesforbundet), wanted industry-level negotiations. This may be interpreted to mean that the federation wishes to give higher wages top priority in the forthcoming settlement. The settlement will take place at a time when the Norwegian economy is buoyant.

Commentators point to the fact that the risk of industrial conflict tends to be higher with industry-level settlements, since a number of agreements are bargained over separately, and that wage growth tends to be higher compared to centrally coordinated settlements. However, LO and NHO are organisations with significant coordinating abilities, even with regard to industry-level settlements. The decision to adopt industry-level settlements must therefore not be interpreted as an unambiguous step in the direction of decentralised wage bargaining in Norway. However, the combination of a favourable economic climate, a tight labour market and industry-level negotiations may lead to a higher wage growth than many believe is good for the Norwegian economy.

This year's wage negotiations in the private sector may be off to a difficult start since NHO does not wish to meet LO ahead of the industry-level bargaining in order to negotiate over the main principles of further education and training reform. NHO had previously signalled that the employer side believed that such an extensive social reform had to be a matter for centrally coordinated settlements. Nevertheless, there is a possibility that the two major social partners will meet in order to discuss these issues before industry bargaining commences. This means that pressure is being put on the Government to make explicit its contribution to the reform.

Another issue which may also complicate the forthcoming negotiations in the private sector is the fact that YS did not reach agreement on a revised Basic Agreement with NHO in 1997 (NO9712142N). The negotiations regarding the new Basic Agreement broke down when YS could not accept that the minimum requirement for union representativeness which LO and NHO had agreed upon in their Basic Agreement, was also to be made applicable to the YS-NHO Basic Agreement. YS wants this question to be part of the industry-level settlements between NHO and the different YS-affiliated federations, a situation which will complicate the settlements. (Kristine Nergaard, FAFO Institute for Applied Social Science)

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Tilføj kommentar