2004 bargaining round progresses

During Norway's spring 2004 collective bargaining round, sectoral agreements are being renegotiated across the economy. The first deal was reached in the trend-setting manufacturing industry in early April, following the government’s pledge to introduce a statutory right to an occupational pension for all workers, thus resolving a key issue in the negotiations. The parties in manufacturing also agreed on general hourly pay increase of NOK 1.00, which was subsequently adopted in a number of other private sector agreements. However, industrial action has broken out in wholesale companies.

In spring 2004, all Norway's major collective agreements are being renegotiated. The bargaining is being conducted at industry level - ie all sectoral agreements between the trade unions affiliated to the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO) and the employers' associations affiliated to the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO) are being negotiated separately. The first agreements were reached in manufacturing industry on 1 April, and negotiations will continue throughout the spring, with all public sector agreements still to be concluded. A major dispute has broken out in the wholesale sector.

Agreement in trend-setting sector

The 2004 bargaining round commenced in March with negotiations in manufacturing industry, the building sector and the textiles industry (NO0404101N). The three collective agreements were negotiated jointly, which represented a novelty. LO and its affiliate, the Norwegian United Federation of Trade Unions (Fellesforbundet) thus managed to amalgamate negotiations in the traditional trend-setting metalworking industry and the low-wage textiles industry.

The central demand from LO/Fellesforbundet was the introduction of an agreement-based universal occupational pension scheme. The demand had been raised in the 2002 bargaining round, when the trade unions failed to win the employers' support (NO0204103F). In 2004, the employers again refused to accept the unions' initial demands on occupational pensions, and for a long time the social partners seemed far from a solution. The employers opposed an agreement-based scheme, not least because it would create a competitive imbalance between companies with and without collective agreements. Mediation failed to bring the parties closer together, but eventually the employers reluctantly conceded on condition that such pension schemes should be based on a statutory right applicable to all employees (not just those covered by collective agreements). Thus, the social partners sent a joint letter calling for legislative measures in this area to the Minister of Labour and Government Administration, who, in his response, stated that the government intends to place such a proposal before parliament in the autumn 2004. The proposal for new legislation will be considered in connection with the parliamentary consideration of a wider proposal for reform of the national pensions system in spring 2005 (NO0402101F).

In the deal reached on 1 April, the social partners agreed on a general wage increase of NOK 1.00 per hour. Workers subject to agreements which do allow for subsequent company level bargaining will see an increase of NOK 1.50 per hour, while those subject to agreements setting a low average wage will see an additional increase of NOK 0.50 per hour.

The bargaining parties also agreed on new provisions regarding the hiring of labour from other manufacturers, the use of labour from labour-hiring companies, and the outsourcing of labour to others (subcontracting). The new provisions ensure that the company concerned will consult shop stewards on matters concerning the hiring and outsourcing of labour. In this regard, the social partners jointly emphasise the need to prevent 'social dumping', and to maintain decent pay and working conditions for workers hired out in these circumstances. These issues have been high on the trade union agenda for some time, not least because there is a fear that the eastward expansion of the EU will lead to an increased use of foreign workers with pay and conditions below normal Norwegian standards (NO0310102F).

The employer side sees the outcome of negotiations as a step in the right direction, although it regards the pay increases as too high. Fellesforbundet is also satisfied with the result, and its negotiating committee has unanimously recommended the deals to the union's members. The agreements are of two-year duration, but with renegotiations in 2005. A ballot is currently being held among the members of Fellesforbundet.

Other private sector agreements

In the course of April, several more agreements were concluded in the private sector. This was the case in the construction sector, and other bargaining units covered by Fellesforbundet. These accords also provide for a general hourly pay increase of NOK 1.00. The bargaining parties in retail trade - the Norwegian Union of Employees in Commerce and Offices (Handel og Kontor, HK) and the Federation of Norwegian Commercial and Service Enterprises (Handels- og Servicenæringens Hovedorganisasjon, HSH) - also agreed on an NOK 1.00 hourly increase. They further agreed on new provisions with regard to the safety of employees in connection with armed robberies and violence at work. In the hotels and restaurant sector, the social partners concluded a proposal for a new agreement, which is now subject to a membership ballot. However, here the Hotel and Restaurant Workers’ Union (Hotell- og Restaurantarbeiderforbundet, HRAF) refused to recommend the result to its members, which increases the probability of a negative result in the ballot. In that event, there will be either strike action or a new round of mediation. Similar general pay increases to those in manufacturing industry were also agreed in bus and freight transport. Here the unions had also demanded the establishment of a scheme that would ensure that the wages of bus drivers would, within five years, reach the average level for manufacturing workers. The outcome was that bus drivers will receive an additional NOK 1.00 hourly increases from 1 February 2005, while the agreement includes a provision that the wages of bus drivers must be raised to a level closer to those of an average manufacturing worker.

Strike in wholesale

On 21 April, negotiations in the wholesale sector between HSH and the Norwegian Transport Workers' Union (Norsk Transportarbeiderforbund, NTF), which is affiliated to LO, and the Union of Transport Company Employees (Yrkestrafikkforbundet, YTF) and Confederation of Employees in the Private Sector (Privatansattes Fellesorganisasjon, PRIFO), which are both member unions of the Confederation of Vocational Unions (Yrkesorganisasjonenes Sentralforbund, YS), ended in a strike by drivers and warehouse workers. The state mediator concluded that it would be pointless to make a proposal for an agreement since the gap between the two sides was still too great. The main trigger for the strike action was the unions' demand for higher wage increases for unionised employees than for non-unionised employees. The three unions are seeking an 'exclusive' increase of 1.4 % for unionised employees. The strike initially involves 700 workers, and will halt the distribution of a wide range of goods to a number of retail outlets. The employers responded to the strike action by issuing a lock-out warning, based on a desire to prevent distortions in competition between retail chains. The implication of this lock-out was an escalation of the conflict from 26 April.

The issue of 'exclusive' wage increases for unionised employees, or other arrangements making it less advantageous to be non-unionised, has on regular occasions been discussed within the trade union movement, but has not been a central issue on the collective bargaining agenda since the 1970s. More recently, however, several LO unions have called for such exclusive wage increases for unionised employees. HSH has rejected the demand in the wholesale sector, emphasising that this is a matter of principle. There are also differing views within the trade union movement itself as to whether or not such increases are a viable mechanism by which to the deal with the challenge posed by non-unionised employees, but both LO and YS support the strike action taken by their member unions.

It is also worth noting that in wholesale the three unions, two affiliated to YS and one to LO, have pursued joint negotiations. The relationships between YS and LO unions have traditionally been tense. In recent year, however, there has been increasing cooperation between these unions, in the transport sector among others.

Commentary

The solution found in relation to the occupational pension issue in manufacturing industry proves once again that the social partners can influence the political agenda by mobilising the government to take part in an 'incomes policy compromise'. Initially there were differing views among the political parties on the issue of a statutory occupational pension scheme. The issue of occupational pensions has now largely been resolved even before the government and parliament have had a chance to consider the relatively comprehensive set of proposals for a new pensions system issued in January 2004. It is also significant that the occupational pensions issue was raised and solved in connection with the negotiations in the so-called 'trend-setting' industries, which is one of the areas in which LO has a strong position. It is worth noting in this regard that a substantial number of the companies in this part of the economy already have occupational pension arrangements. A statutory occupational pension scheme will thus mainly benefit workers in other sectors, in particular parts of the private service sector. (Kristine Nergaard, FAFO Institute for Applied Social Science)