New pay agreements concluded for most public sector employees

By June 1998, a majority of the bargaining parties in Norway's state and municipal sector had reached agreement on new pay agreements for the period 1998-2000. The settlements are estimated to give an annual growth in pay of 5.7% in the state sector and 6.1% in the municipal sector.

A majority of the bargaining parties in the state sector have reached agreement on new pay settlements for the period 1998-2000. The Federation of Norwegian Professional Associations (Akademikernes Fellesorganisasjon, AF), however, rejected the proposed new agreement, and took strike action on 28 May 1998 (NO9806173F). In the municipal sector, the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO), the Norwegian Union of Teachers (Norsk Lærerlag, NL), and parts of the Confederation of Vocational Unions (Yrkesorganisasjonenes Sentralforbund, YS) also managed to reach an agreement with the employers. AF, together with the two YS-affiliated unions; the Norwegian Association of Health and Social Care Personnel (Norsk Helse- og Sosialforbund, NHS) and the Norwegian Union of Marine Engineers (Norsk Maskinistforbund, NMF) rejected the proposal, and took strike action (NO9806173F). The new confederation, Akademikerne ("Academics"), did not take part in this year's negotiations (NO9803158N), but its member unions in the municipal sector have accepted the new agreements. The Norwegian Police Federation (Politiets Fellesforbund, PF), which is an independent employee organisation with the right to bargain only after the main negotiations have taken place, also accepted the proposal for a new agreement.

The new agreements - pay scales

The state and municipal sectors operate with a common pay structure, which means that a joint general pay increase must be agreed upon. However, outside this general increase, the results of the negotiations vary considerably between the two sectors.

The new agreements give public employees a general annual pay increase of NOK 10,000 from May 1998.

In the state sector funds have been set aside to increase starting salaries. For all categories of posts starting salaries are to be increased by at least two grade rates on the pay scale, which implies an increase of approximately NOK 15,000 to NOK 17,000 per year. The starting salary for teachers has been increased by NOK 21,000 per year. Of the pay award, 2% has been set aside to be used for central adjustment negotiations from 1 August. The parties intend to negotiate how these funds are to be allocated sometime during the summer. There is, however, a general consensus that women and teachers should receive a larger proportion of the pay award than other employees. Local negotiations are also taking place in the state sector, and the pay increases achieved in these negotiations will take effect from 1 September 1998. The economic framework for the local bargaining rounds is decided upon in the central negotiations, and for 1998 it constitutes 0.55% of the total pay award. It is estimated that the overall 1998 wage settlement will lead to a growth in pay of 5.7% from 1997.

The municipal sector has also seen increases in starting salaries for certain categories of posts, and employees with long seniority will receive additional pay increases beyond the general annual increase of NOK 10,000. Funds are set aside for local negotiations, and overall 0.78% of the total paybill will be allocated in local negotiations. The agreements which emerge from local negotiations in the municipal sector will take effect from 1 November 1998, which implies that these negotiations will not have a significant impact on the average pay level for 1998. Women will receive a larger proportion of increases in the local negotiations than other groups, and the parties will consider during the negotiations whether the emphasis given to equal pay in the previous year has been followed up and fulfilled. It is estimated that the municipal sector negotiations will produce a general growth in pay of 6.1% from 1997 to 1998.

Continuing vocational training

Both in the state sector and municipal sector the parties have agreed to cooperate on the issue of continuing vocational training. The municipal sector parties have agreed to follow the action plan for continuing vocational training agreed upon by LO and the Confederation for Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO) prior to the pay negotiations in the private sector (NO9804161F). A similar plan has been worked out to take account of the requirements of the municipal sector, and a joint committee is to coordinate the introduction of continuing vocational training reform. The parties in the state sector will also establish a joint committee, which will prepare the ground for continuing vocational training reform. As in the previous state sector agreement, funds will be set aside for competence development. Issues concerned with the development of continuing vocational training reform may be introduced into the public sector mid-term negotiations in 1999, as is the case in the private sector.

Other issues

In both the municipal and state sectors, the seniority credited during leave of absence for welfare care purposes (such as childcare, care for older or sick dependants), has been increased by one year. This means that employees may be credited with two year's seniority in the municipal sector and three year's seniority in the state sector. As in the private sector, the parties in the public sector have committed themselves to consider the need for flexible working time arrangements by the autumn of 1999. In addition, the parties in the municipal and state sectors will consider issues involved in teleworking.

Commentary

The public sector pay settlement involves a significantly higher pay increase for public employees than previously estimated for private sector employees (NO9805164F). However, in the private sector there are many groups who have local bargaining rights which may well produce a higher growth in pay than expected. Public sector pay growth is significantly higher than the 5% increase from 1997 to 1998 which was suggested in the government's revised national budget (NO9805167N). It follows that this year's pay settlement will allow a much larger increase than was expected at the beginning of 1998. With an estimated increase in prices of 2.5%-2.6% for 1998, it represents a significant real pay increase for employees.

AF's rejection of the proposal for a new agreement must be seen in the light of its dissatisfaction with the general profile of the 1998 settlement. AF claims that its members are not given sufficient priority. It was also to be expected that the settlement negotiations would cause difficulties for AF, because the split in its ranks in autumn 1997 means that there is greater pressure on the organisation to achieve a better settlement result for its remaining member unions. (Kristine Nergaard, FAFO Institute for Applied Social Science)