Strike hits private sector

Some 80,000 members of the LO trade union confederation went on strike in the Norwegian private sector on 3 May 2000, after LO members rejected the proposal for a new collective agreement drawn up by LO and the NHO employers' confederation. The strike involves a wide range of sectors.

Approximately 80,000 members of the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO) launched strike action on 3 May 2000. The strike occurred after a majority of LO's members voted against the proposal for a new private sector collective agreement reached by LO and the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO) (NO0004184N). Around two-thirds of LO members eligible to vote participated in the ballot, of whom 64.3% voted against the proposal.

LO members reject new agreement

The spring 2000 pay bargaining round, which involves the renegotiation of all Norway's collective agreements, began with the private sector negotiations between LO and NHO. The basis for the settlements is the incomes policy compromise drawn up in 1999 by a public committee, in which all major social partner organisations participated (NO9903120F). The basic aim of this compromise has been to lower general wage growth in Norway to the level of its trading partners. This means that there is little room for significant wage increases, especially since LO's demands for 2000 also include increased holiday entitlement (NO0002178F) and the setting aside of funds for the continuing reform of skills and training (competence) (NO9901113N).

On 1 April 2000, representatives of LO and NHO agreed on a proposal for a new collective agreement. The agreement, which was later rejected by LO's members, contains the following principles:

• employees in the LO/NHO agreement area would receive a general wage increase of NOK 0.75 per hour from 1 April 2000. Employees with a low average wage, approximately 30% of the workers concerned, would receive supplementary increases of NOK 1.00 or NOK 1.25 per hour;

• a four-day increase in annual leave entitlement (which in effect means that employees would have five weeks' paid leave per year). This would be implemented incrementally by adding one day in 2001, and three more days in 2002; and

• for the first time since the 1950s, a three-year agreement was proposed (rather than the usual two years). As such, there would be no central negotiations in 2001, while the "intermediate" settlement in 2002 would be carried out at the overall industry level.

Although the leaders of four member unions voted against, a majority in LO's negotiating delegation was in favour of the proposal, including the leader of LO, Yngve Hågensen. Mr Hågensen, however, expressed dissatisfaction with the fact that LO did not gain acceptance for its demand for the setting aside of funds for continuing and vocational training. As such, the agreement was soon criticised by representatives from more favourably inclined unions, as well as those opposed.

The new collective agreement had to be approved by trade union members in a ballot. Trade union members usually abide by the recommendations of their leaders, but in the days before the ballot widespread discontent with the proposal was apparent among LO's members. The negative result of the ballot, which took place on 28 April, was sensationally high, with 64.3% of members voting against the proposal. A majority in all LO unions but one voted against. There was also a significant negative majority in unions in which the leadership had recommended their members to vote in favour of the proposal, among them the Norwegian United Federation of Trade Unions (Fellesforbundet), which is LO's largest affiliate in the private sector.

The strike

The strike which started on 3 May involves 80,000 of LO's 230,000 or so members within the LO/NHO agreement area. In the metalworking industry and building and construction industry, all LO members are on strike, while other branches within the manufacturing industries and the service sector are, or will, also be affected. Although LO's strike action aims first and foremost to hit the employers, the industrial action taken will also have an immediate and significant effect on the population at large. The largest newspapers will not appear, ferries will cease to operate, and the production of several types of foods will be halted, such as soft drinks, snacks, and chocolate. LO has also called on members employed in private security companies and forwarding agencies to strike. This means that the strike will soon have consequences for enterprises not involved in the strike. NHO has so far not indicated that it will resort to lock-outs in any of its member companies.

Commentary

There is some uncertainty with regards to the duration and the result of the conflict. The State Mediator has verified that there seems to be no willingness among the parties for further mediation, and it is unlikely that the government will intervene at an early stage by means of compulsory arbitration. LO states that there is no need for compulsory arbitration, since its selection of companies to be targeted with strikes was carried out with health and safety of the population in mind. Furthermore, oil production in the North Sea will not be affected by the strike. An early settlement thus depends on the parties themselves taking the initiative to resume negotiations. LO has signalled that it will resume negotiations only if its members receive an improved offer from NHO. NHO, on the other hand, argues that since LO rejected the original proposal, it is LO's responsibility to take the initiative. It is thus unclear when and from whom an initiative to resume negotiations will come.

The clear negative ballot result makes evident the general discontent felt by LO members with the proposed agreement negotiated by LO and NHO. The disgruntlement, however, does not seem to be directed at any specific issues, and the content of criticisms differs among the various unions. Several unions have been sceptical about a three-year agreement period, and there has also been dissatisfaction with the financial aspects of the agreement, with regard both to the general wage increase of NOK 0.75, and the delayed implementation of the extended holiday entitlement (in 2001 and 2002). The failure with regard to the financing of the competence reform has also added to the dissatisfaction. There are also factors involved outside the sphere of the agreement itself. The Bank of Norway was criticised by LO for raising its interest rates in April. Furthermore, in a speech on 1 May 2000, the leader of LO criticised trends towards rising management salaries and greater returns for shareholders, and stated that LO members will not show moderation unless other groups follow suit. It has also been pointed out that the union members opposed to the proposed agreement have been more active in the promoting their cause than those in favour.

There are also speculations that the ballot result signifies a change in LO's policy of moderation. LO was throughout the 1990s an influential advocate for a policy of moderate wage increases in order to safeguard employment and social reforms. However, the extent to which the first wage settlement of the 21st century signals a transition towards a different incomes policy regime in Norway remains to be seen. (Kristine Nergaard, FAFO Institute for Applied Social Science)