Agreement to minimise redundancies in postal service reorganisation

The Norwegian postal service (Norway Post) and its trade unions reached an agreement in October 1997 on the reorganisation of its distribution network. Several measures are to be taken in order to ensure that the reorganisation can take place without too many redundancies among approximately 1,500 workers who are expected to be surplus to requirements. Such measures to minimise redundancies are standard procedure during reorganisation within the state sector, and as well as in the postal service are also used in the armed forces and the national railways.

An agreement was concluded on 10 October 1997 between Norway Post and the Joint Federation of Postal Employees.The latter is the cooperation body for the two unions that organise the majority of employees in the postal service, the Norwegian Union of Postal Employees (DNP) and the Norwegian Union of Postal Workers (NPF), both of which are affiliated to the Norwegian Confederation of Trade Unions (LO). The agreement aims at creating a new infrastructure for postal operations, which involves a reduction in the number of sorting offices in operation. Also included in this agreement are measures to safeguard the jobs of approximately 1,500 employees adversely affected by this reorganisation.

The postal service is also restructuring other areas, with important implications for employees. In 1996, a decision was taken to reduce the number of post offices from 2,400 to 900. According to calculations made by the postal service itself, the implications of this are that it would make almost 4,000 employees redundant. The parties agreed to measures in order to prevent too many workers being displaced from their jobs when the reorganisation has been completed. By autumn 1997, almost 80% of the redundant workers had been transferred to other jobs within the service or to jobs located outside the service itself. Norway Post employs almost 30,000 workers

Education and mobility

An important aspect of both postal service reorganisation package deals is the emphasis put on education in relation to reorganisation. Among other provisions, employees are allowed paid study leave not exceeding three years in duration, and in making use of this right they receive pay during 10 out of the 12 months in a year. However, employees have to have worked in the postal service for two years in order to qualify for for each year of paid study leave. In some cases employees may receive paid study leave if they agree to resign their jobs - this is a one-year leave with 87.5% pay, and it applies only to employees for whom the service is unable to find jobs.

Reorganisation is made difficult by the fact that it mostly affects postal workers situated in the outer areas of Norway who are hit hardest by the "downsizing" process. These are areas in which there are few jobs and positions within the service, and it is therefore harder to replace lost jobs. Thus, in both agreements measures encouraging geographical mobility are emphasised. Employees who are forced to move will receive compensation for removal expenses, and are entitled to an additional mobility allowance. Employees who are forced to commute will have their travel expenses partly paid for, and may also receive compensation for expenses involved in keeping two households.

Employees made redundant at the age of 60 or above, are given the option of early retirement, which normally only applies to people over the age of 62. Furthermore, employees who are not given a replacement position within the service or in another company, may receive severance payments equivalent to 10 months' pay if they agree to resign their positions.

Measures to accompany downsizing in the state sector

It is common procedure in Norway to introduce package deals in order to prevent redundancies where major reorganisations take place in the state sector. The legal basis for this is found in a government declaration of 26 May 1992, which advocated close cooperation between state sector enterprises/ institutions and trade unions about concrete measures to reduce problems that may arise for each individual affected by reorganisation. This arrangement is also set out in the general collective agreement for the state sector. An important measure in this regard includes human resources developments which enable employees to work in alternative task areas within the specific institution, in the state sector in general or in other jobs. The Government is obliged, according to the declaration, to contribute financially in support of these measures.

Different types of package deals have been introduced in relation to reorganisation in several state-owned companies such as Telenor (formerly Norwegian Telecom) and Norwegian Railways, and also in the armed forces. Previously it was common to establish so called "reorganisation units" to which redundant employees were transferred, but today the measures are channelled through the ordinary state sector units themselves.

Commentary

Reorganisation within the state sector in Norway is very much coloured by the fact that trade unions are invited to take part in the process, as well as in drawing up measures aimed at reducing the need for dismissals in relation to these reorganisations. Both reorganisations that are currently taking place in the postal services have been approved in committee meetings, in which the employees have, through their representatives, supported the need for reorganisation. The reorganisations are further regulated by agreements made in cooperation with the trade unions themselves. It has been possible to carry out several major reorganisations without them leading to large-scale dismissals. Many of the state sector reorganisation measures implemented are considered financially beneficial to the employees, at least compared with other sectors.

An important factor contributing to directing the efforts of politicians towards such relief measures, is a wish to make sure that major reorganisations in the state sector can take place without their leading to heavy burdens on the employees. As such, the process of reorganisation will run smoother, because it will not be met by too much opposition from the trade unions. Another contributing factor is the fact that dismissals are financially expensive for the public service units. Compared to other sectors, public sector employees have better protection in relation to dismissals. The rights of public sector employees are regulated by The Civil Service Employee Act. Companies such as the Norwegian Railways and Norway Post, although subject to special legal regulations, are covered by similar arrangements. State employees who are made redundant have priority in applying for other positions within the state sector, and this goes for other agencies as well as the one in which they were originally employed. State employees have, in addition, the right to severance pay while applying for new jobs. Severance pay is provided as an alternative to unemployment benefits, but is in force for a longer period of time. In some cases this will mean more cash in hand than is the case with unemployment benefits. (Kristine Nergaard, FAFO Institute for Applied Social Science)