Changes ahead in hospital sector industrial relations

On 1 January 2002, the state will take over responsibility for hospitals in Norway from local government. The hospitals will be organised as five regional enterprises. Employer and bargaining responsibility for the new hospital enterprises have been vested in the existing employers' organisation for (mainly) semi-privatised companies, NAVO. Harmonisation of the three different collective agreements covering hospital staff will be one of the first challenges for employers and trade unions.

On 1 January 2002, the ownership of public hospitals in Norway will be transferred from the local government level (mainly county municipalities) to the state. The hospitals will be organised as subsidiaries under the control of one of five regional public enterprises that will also be established. The transfer of ownership, which was decided upon in April 2001, placed the issue of the hospitals' employer and collective bargaining responsibility on the agenda (NO0101120F).

In the summer of 2001 the government thus made the decision to vest employer and bargaining responsibility for the hospitals in the existing employers' organisation, NAVO, which mainly organises semi-privatised enterprises. As a result NAVO, together with the five new regional enterprises, will become responsible for leading the employer side in bargaining covering approximately 100,000 employees, as well as for the harmonisation or possible replacement of three existing wage agreements and three basic agreements.

The reform

The state takeover of hospitals in Norway marks the end of a process of major reform in the national health services, which have been accomplished within a very short period of time. Less than a year will have passed since the proposal was raised by the government when the hospitals are taken over by the state in January 2002. A hearing was initiated in January 2001, and a proposal for new legislation was put before parliament (Stortinget) in April 2001, which was passed in June 2001.

At the outset, most of the relevant trade union organisations were positive about a state takeover of the hospitals. However, a majority wanted to see a different organisational structure and employers' representation, with the hospitals part of the state public administration, and the state itself maintaining employers' and bargaining responsibility – either through the Ministry of Labour and Government Administration (AAD), or by means of an independent employers' association for hospitals.

Despite the unions' wishes, parliament decided upon a model allowing for a significant degree of semi-privatisation of hospital structure through the establishment of five regional health enterprises with significant financial and operational independence. Many of the unions in the health sector perceive the new group structure as a step in direction of privatisation, with an increased emphasis on profitability and revenue. The decision is thus an example of the state's ability to reorganise the public sector despite opposition from strong and influential trade unions.

Employer affiliation, bargaining structure and worker's rights

The state takeover presents a significant challenge to the new owner, with regard to the organisation of the new enterprises and its relations with the employees concerned, as well as the need to put new collective agreements in place.

Approximately 100,000 employees are affected by the reform. A majority of these are currently employed by the county municipalities or the municipality of Oslo. The hospitals are covered by three different wage agreements: the agreement for municipal employees; the agreement for employees of the municipality of Oslo; and the central state sector agreement. These agreements differ to some extent with regard to their content. In addition, state sector employees are subject to slightly different legal regulations than other public employees, for example enjoying better legal protection in the area of dismissal. Employees affected by the reform are guaranteed that their pension arrangements will be maintained in the transfer from the municipal level to the state level, and that accumulated pension rights will be transferred to the new pension scheme. Current state employees will also be able to maintain their special rights with regards to employment protection for three years.

The first challenge facing NAVO, the new health enterprises and the trade unions will be to establish provisional arrangements and to conclude a joint collective agreement in the 2002 bargaining round. Although the differences in the legal framework as well as in the framework of collective agreements are relatively minor, they are nevertheless large enough to make harmonisation difficult. Furthermore, NAVO and the new health enterprises will be confronted with a range of organisations on the employee side, including strong professional organisations for different groups within the health sector such as doctors and nurses, as well as Norway's largest trade union, the Norwegian Union of Municipal Employees (Norsk Kommuneforbund, NKF).

Although the preliminary challenge will be to establish transitory arrangements to enable new agreements to replace old ones, the issue of further developing the bargaining structure and wage systems will beyond doubt remain on the agenda in the years to come. It is not yet known how NAVO envisages the new bargaining structure, because it will necessarily have to be established in close cooperation with the enterprises concerned (the five regional enterprises). Experience with other semi-privatised enterprises in NAVO, however, suggests that wage systems will emerge where the emphasis to a higher degree is on company-level or local wage formation.

Commentary

There were in principle five possible alternatives with regard to the employers' organisation affiliation of the five new health enterprises:

• to remain under the jurisdiction of the Norwegian Association of Local and Regional Authorities (Kommunenes Sentralforbund, KS);

• to transfer responsibility to the Ministry of Labour and Government Administration (which has employer responsibility for bargaining in the state sector);

• to join the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO);

• to join the Federation of Norwegian Commercial and Service Enterprises (Handels- og Servicenæringens Hovedorganisasjon, HSH), which organises private hospitals; or

• to join NAVO.

This situation is indicative of the increasing competition observed among employers' organisations in Norway (NO9712138F). KS, HSH and NAVO were interested in taking on employer and bargaining responsibility for the five new enterprises. The reason why NAVO was chosen was mainly due to its previous experience with semi-privatised enterprises. The choice of NAVO, however, was also important in that it did not tilt the present balance of power between the largest – and to some extent competing – main employers' confederations in the private sector, NHO and HSH. NAVO is party to a cooperation agreement with NHO, and NAVO's largest affiliate, the Norwegian telecom company Telenor, is also a member of NHO (NO0107136F). This agreement has been expanded and prolonged.

NAVO will also obtain two other large state enterprises as members in the autumn of 2001 - Norway Post (Posten) and Norwegian State Railways (NSB). According to NAVO, this will mean a quadrupling of the number of employees in its member companies. With employer and bargaining responsibilities for the public hospital sector as well as Posten and NSB, NAVO will be a significant actor on the employer side. This will most probably mean that it will gain representation on Norway's various public committees on incomes policy.

It will not be an easy task for NAVO to be in charge of wage negotiations and developments in a sector marked by a pressing shortage of labour, especially among nurses. Female-dominated occupational groups have long argued that wages within this sector have been lagging behind, and that female-dominated occupations within the health sector are systematically paid less than comparable male occupations. Another major challenge for the employer side will be to view wage developments for health personnel in different sectors as a whole, because of the fragmentation of employer and bargaining responsibility that has taken place between the two main employers of health personnel in Norway - hospitals and municipal primary health services. It will thus be considered necessary to prevent competition for labour leading to wage spirals, while at the same time both the hospitals and the municipalities would like to develop local or company-level wage policies, among other factors based on recruitment needs. (Kristine Nergaard, FAFO Institute for Applied Social Science)