2000 Annual Review for Norway

This record reviews 2000's main developments in industrial relations in Norway.

Political developments

The political climate in 2000 was very much marked by the change in government in March. This took place after the minority coalition government consisting of the three centre parties - the Christian Democratic Party (Kristelig Folkeparti, KRF), the Liberal Party (Venstre) and the Centre Party (Senterpartiet, SP) - resigned after losing a vote in parliament over the building of new gas-fired power plants. The centre coalition was replaced by a new minority Labour Party (Det Norske Arbeiderparti, DnA) government led by Prime Minister Jens Stoltenberg. Despite the controversies surrounding the shift in government, the incoming Labour government and the three centre parties managed to compromise on a budget for 2001. The 2001 state budget proposal did not involve any significant alteration to existing rights and arrangements in the industrial relations and employment area. For example, the sick pay scheme will be continued in its present form.

More generally, the political landscape in Norway was characterised by poor opinion poll results for the Labour Party, and growing support for the far-right Progress Party (Fremskrittspartiet, Frp).

Collective bargaining

The wage settlement in the spring of 2000 involved most collective bargaining areas and was a so-called main settlement – an opportunity to completely renegotiate the two-year collective agreements. The round was carried out in the context of an agreement reached by the social partners in advance of the 1999 round. This deal committed the parties to reduce wage growth in the Norwegian economy to the level of the country's main trading partners (NO9903120F).

It was expected that issues such as working time reductions and a continuation of the education and skills reform would be included in the negotiations. Furthermore, demands for substantial wage increases were also expected from groups in the public sector, especially those with higher education, such as teachers and nurses. There has in recent years been significant discontent concerning wage conditions in the public sector among these groups, and they have received broad political support for their claim that present wage levels hamper recruitment and as such affect the quality of public services (NO0002178F).

Pay

In keeping with tradition, bargaining in 2000 began in the private sector. The general council of the Norwegian Confederation of Trade Unions (Landsorganisasjonene i Norge, LO) decided that bargaining was to be carried out as an "industry-wide settlement" – ie all collective agreements between the member organisations of LO and the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO) were to be negotiated together and subjected to a collective ballot. The implication of such a procedure is that the main confederations play a dominant role in the negotiations.

On 1 April, LO and NHO succeeded in agreeing on a proposal for a new collective agreements (NO0004184N). The proposal involved a general wage increase of NOK 0.75 per hour, as well as additional increases for employees in bargaining areas with a low average wage. The deal also reflected the wish of some employers, for the first time since the late 1950s, to abolish the practice of two-year agreements, and instead introduce three-year agreements without central wage negotiations in 2001. The parties agreed that the proposal fell within the scope of the incomes policy compromise reached in 1999 (see above).

The proposal for the new agreements met with significant opposition from LO members and local trade union representatives, and was subsequently rejected in the ensuing ballot. This led to a comprehensive strike that more or less paralysed the manufacturing and building/construction industries (NO0004188F and NO0005191N). More than 80,000 LO members in the private sector went out on strike on 3 May. However, after six days of conflict the parties succeeded in concluding a new agreement (NO0005192F). The general wage increase was raised to NOK 1.50, and the special increases for low-wage groups were raised, while the proposal for three-year agreements was abandoned. The parties upheld the decision that central negotiations should not take place in 2001. However, a general wage increase for 2001 is part of the 2000 agreement.

The wage negotiations in the public sector were concluded after the private sector strike had ended. This meant that the economic framework for the new private sector agreement, as amended, formed the basis for the public sector negotiations. This helped to smooth the bargaining process, and as such agreements were concluded relatively swiftly for most employees in the public sector (NO0006194F). A general annual increase of NOK 5,000 was awarded, and funds were set aside for local negotiations and wage adjustments at the central level. It was decided that groups with higher education were to be given priority in local negotiations, and there will be no central negotiations in the public sector in the spring of 2001. Public sector employees will also be given a general rise in 2001 and funds are set aside for local bargaining. It was later pointed out that both the distribution of wages and the emphasis on local negotiations may indicate a change of direction in terms of wage formation in the public sector.

Teachers were given special attention during the 2000 wage settlement. For the first time, local negotiations for teachers will be carried out at the municipal level. Further, a "school package" was introduced, in which a general rise was linked to the introduction of different types of pilot schemes regarding work organisation.

Although all the main union confederations gave their approval to the new public sector agreement, some individual unions in the municipal sector rejected it and took strike action (NO0007197N and NO0009102N).

Working time

In the private sector, the initial proposal for an agreement included a gradual four-day extension of annual leave entitlement (to a total of five weeks), to take place over 2001 and 2002. The final agreement included some adjustments to the timing of the implementation of the extended leave entitlement. The public sector agreement subsequently followed suit.

Job security

There were no significant developments in the area of bargaining on job security in Norway during 2000

Training and skills development

In the private sector, the trade unions ultimately had to drop their demand for an agreement on the establishment of a tripartite funding scheme to finance subsistence payments for employees taking leave to participate in continuing and vocational training. However, in the final agreement which followed the strike, the employers agreed to a stronger commitment on the establishment of a financing scheme for skills and competence reform.

Legislative developments

New regulations concerning private employment agencies and the "leasing" of labour came into force on 1 July 2000 (NO9912168F). The new provisions constituted a liberalisation of existing rules on the leasing of labour, while the general ban on private employment agencies was abolished. Apart from this, there were no major legislative developments in Norway in 2000.

Several EU Directives on social policy issues (which generally apply to Norway through the operation of the European Economic Area (EEA) agreement) were considered in 2000, including the Directives on part-time work (97/81/EC) and transfers of undertakings (98/59/EC), both of which are to be implemented during the first half of 2001. However, the government does not expect substantial alterations to the Norwegian legal framework. The implementation of EU Directives in the social field has only to a limited extent generated debate in Norway.

New regulations concerning occupational pensions schemes were approved in 2000, which will allow for tax rebates on so-called "defined-contribution" plans. These pension plans entail the company paying a fixed amount of money into a pension account on behalf of the employee, such as a percentage share of an employee's income. The payments to employees from such schemes depend totally on the amounts going into the account and the yield from the account - in other words, they work very much like ordinary savings schemes. The legal changes will make it easier to introduce occupational pension schemes in the private sector, where only one-third of employees are covered by them. The new rules came into effect on 1 January 2001 (NO0101119F).

The organisation and role of the social partners

The organisational structure of trade unions was turbulent in 2000, especially at the confederation level. An attempted merger of the Confederation of Norwegian Professional Association (Akademikernes Fellesorganisasjon, AF) and the Norwegian Confederation of Vocational Unions (Yrkesorganisasjonenes Sentralforbund, YS) failed in the summer of 2000 (NO0006195N). Following the merger's failure, AF decided to dissolve itself in 2001 (NO0007199F).

Shortly after this development, four public sector trade unions announced their plan to set up a new confederation before the 2002 wage settlements (NO0009106F). The four unions involved are the Norwegian Police Federation (Politiets Fellesforbund, PF), the Norwegian Union of Teachers (Norsk Lærerlag, NL), Teachers' Union Norway (Lærerforbundet), and the Norwegian Nurses' Association (Norsk Sykepleierforbund, NSF).

A number of trade unions merged or were deliberating mergers during 2000. Three YS-affiliated unions in the state sector merged, and in LO the two postal workers' unions merged (NO0011110N). There were also indications to suggest that plans for a new merged teachers' organisation may soon materialise. Efforts to merge the LO-affiliated Norwegian Union of Municipal Employees (Norsk Kommuneforbund, NKF) and the YS-affiliated Norwegian Association of Health and Social Care Personnel (Norsk Helse- og Sosialforbundet, NHS) will also be continued in 2001.

There were no significant changes to the structure of employers' organisations in 2000. NHO witnessed a growth in its membership base both because several large transport sector employers joined and because the confederation seems to have won the battle to organise most electric power companies. However, there is still tension between the employers' associations with regard to the recruitment of new member groups. Finally, Jens Ulltvedt-Moe was elected as the new president of NHO in the autumn of 2000 (NO0012115N).

Union density among Norwegian employees has remained relatively stable for several years, with only minor variations from year to year. Recent figures, however, seem to suggest that union density is now decreasing. LO is witnessing a continued weakening of its relative position in relation to the other main union confederations in terms of the number of organised employees (NO0008101F).

During 2000, the government established a tripartite public committee with a view to encouraging closer cooperation between the Norwegian social partners and national authorities on EU social and employment policy (NO0009104F).

Industrial action

The most significant industrial action of 2000 was the six-day strike in the private sector, following the rejection of the wage settlement. (see above under "Pay"). This involved approximately 80,000 LO members. In addition, there were several smaller strikes in the municipal sector. Most of these were long, but involved relatively few employees. Strike action was also taken at some Norwegian oil production industries. Like several of the other small strikes, this action was brought to a close by compulsory arbitration, but only after 14 days of strike action and the threat of a lock-out from the employers (NO0007197N). The general impression is that the government has in recent years been more careful in using compulsory arbitration than was previously the case. Figures concerning the number of working days lost in 2000 are not published until the spring of 2001, but preliminary estimates indicate that between 400,000 and 450,000 working days were lost due to industrial conflicts. This figure is high in the Norwegian context.

National Action Plan (NAP) for employment

As Norway is not a member of the EU, it is not under any obligation to formulate an NAP in response to the annual EU Employment Guidelines. However, labour market policy in Norway is very much coloured by the general wish to encourage wage developments which are not harmful to the economy, safeguard employment in the private sector, and provide for the highest possible employment rate.

Norwegian employment policy will increasingly be oriented towards ensuring a sufficient supply of skilled labour. One central concern is the potential inability of the labour market to meet the employment needs of the public sector in the years to come. These developments have intensified the debate surrounding the issue of labour immigration, and the extent to which changes to the legal framework are needed in order to make it easier for employees from outside the EEA to obtain work permits in Norway (NO0012113N). Furthermore, 2000 also saw the abolition of the ban on private employment agencies, while regulations concerning temporary working were relaxed (see above under "Legislative developments"). Government plans for the creation of a public temporary work agency have not yet been implemented.

2000 was also the first year in which the Norwegian authorities produced a comprehensive review of the national labour market, the main aim of which was to make information on Norwegian employment and labour market policies more accessible to an international audience.

Equal opportunities and diversity issues

There were no significant legislative or collectively bargained developments in relation to equal opportunities and diversity in 2000

The government did, however, put forward a proposal to change the provisions of the Working Environment Act (AML) in order to widen the ban discrimination relating to recruitment. This would mean that the AML banned discrimination on grounds of disability, as well as the existing grounds of gender, race, national and ethnic origin and sexuality. Furthermore, the government also proposed the introduction of the principle of sharing the burden of proof in discrimination cases (on all grounds, including disablity). This proposal was controversial, and it was not yet clear at the end of the year whether it would receive a majority in parliament.

The government also signalled a wish to change the Equal Status Act in order to tighten up requirements with regard to balanced gender representation on boards of semi-public and private companies. The proposal received mixed responses (NO0003183F). The government is to devise concrete proposals for amending the act in 2001.

Information and consultation of employees

There were no major changes to the legal framework nor to collective agreements with regard to information and consultation in 2000. So far, the proposed European Company Statute and the draft EU Directive on national-level information and consultation of employees have not generated much debate in Norway. Nor has there been significant discussion on the topic of European Works Councils.

New forms of work

New forms of work are discussed regularly at a general level in Norway. New regulations concerning the hiring in and out of labour came into force in June 2000 (see above under "Legislative developments"). There are now no rules concerning the hiring out of labour, but there are regulative restrictions on when companies may use hired labour. The general impression is that these changes constitute a significant liberalisation of the legal framework.

Although there is as yet no legal regulation of home-based teleworking, this form of work has gradually become an issue for negotiations among the social partners, and there are now several agreements covering the subject.

The proportion of temporary employees in the workforce has decreased in recent years. Labour force surveys also show that there has not been a measurable increase in the share of employees stating that they work during evenings or weekends, nor in the amount of overtime work carried out.

Other relevant developments

Two public committees delivered reports in 2000 with relevance for labour market policy and wage formation. They are expected to have a significant bearing on industrial relations in 2001 and beyond.

The report of the Holden committee, issued in June 2000 (NO0007198F), examined "a strategy for employment and value creation". It raised a number of issues, but the main focus of attention was on those proposals dealing with incomes policy. The committee called for a stronger coordination of wage formation based on the so-called "trend-setting industries model", whereby those industries subject to most international competition establish the economic framework for national wage growth developments. The implication of this is a continued emphasis on centralised incomes policy cooperation. The model has, in theory, received support from all the major actors in Norwegian industrial relations, although it is evident that the parties have divergent expectations about the actual content of such a model (NO0012117F).

The Sandmann committee, which issued its report in September 2000, deliberated the issue of sick leave and the exit of employees from the labour market (NO0010109F). It called for the reduction of sick pay. The committee's report also expressed a wish to reduce the number of employees exiting working life prematurely, among other measures by placing increased responsibility on public authorities and companies for following up employees in rehabilitation or on sick leave. Although changes to the present sick pay scheme would generate significant controversies among the social partners, there is a general consensus about the need to pursue a policy that encourages employees to remain in the labour market as long as possible.

Outlook

In 2001, for the first time in several decades, no central wage negotiations will be carried out in the second year of the two-year collective agreements in force. However, this does not mean that the issue of bargaining structure will not be on the agenda. The rejection of the original agreement reached between LO and NHO in 2000 has led many people to question the social partners' ability to continue a coordinated and centralised wage policy. Furthermore, the report of a public committee deliberating issues related to the national bargaining system is expected some time in the spring of 2001. The bargaining system has also been put on the agenda by the report of the Holden committee in 2000. This means that both incomes policy and the national bargaining system will be on the agenda in 2001. LO will also focus attention on the bargaining system in 2001: at its national congress to be held the spring, the bargaining system and collective agreement structure will be on the agenda.

In terms of legislative developments, regulation of the working environment, flexibility and work/life topics are expected to be on the agenda in 2001. The present Working Environment Act was introduced in 1977, and many believe that it is now time for a comprehensive revision of the legislation. LO has signalled that it wants to see the creation of a completely new act. It is also expected that the public authorities will deliberate the extent to which a large-scale revision of the legal framework in this area is needed. Although many see a need to completely overhaul the present legal framework, it is as yet unclear what the content of any new act will be. While debate on possible changes will start in 2001, no concrete proposals are expected during the year.

2001 will also be marked by the parliamentary election in September. It is highly likely that a wide range of issues relevant to industrial relations will be touched upon during the election campaign, including the sick pay scheme, questions relating to regulations and flexibility in working life, modernisation and reorganisation in the public sector, and revision of the present labour dispute mechanisms.