LO-NHO report on working time schedules

As part of Norway's 1998 spring pay settlement, the NHO employers' confederation and LO trade union confederation decided to consider possible changes to working time schedules. The report, which was published in September 1999, shows differing views with regards to the best working time models. Both LO and NHO, however, want to see some sort of "time-account scheme".

A joint committee established by the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO) and the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO) has been considering changes to Norwegian working time schedules. The committee's report examines different aspects of the issue of working time, as well as flexibility in a short- and long-term perspective. The report, which was made public in September 1999, originates in the 1998 spring pay settlement, when the Norwegian United Federation of Trade Unions (Fellesforbundet) and the Federation of Norwegian Manufacturing Industries (Teknologibedriftenes Landsforening, TBL) jointly asked their main confederations to deliberate over the issue of future working time schedules (NO9805164F). The request received support from the social partners in other bargaining areas. The parties emphasise that the committee's mandate is to look at both "the individual employee's need for increased flexibility at various stages in working life, and the need of companies for flexibility in the face of increasing competition".

The committee comprised representatives of the main confederations, as well as member trade unions and employer associations. In addition to a discussion on the present situation - about which there is little disagreement - alternative working time models were discussed. The parties agree to use the term "time-account" scheme to describe these models. LO and NHO put forward separate proposals for new time-account models, each accompanied by a commentary from the other side.

The LO model

LO envisages a long-term model in which funds are set aside during central wage settlements, which will enable employees to accumulate time off in the time-account scheme, without having to reduce their nominal wage. One example given is that of annually setting aside 2% of increases agreed during wage settlements over a period of three years, which would allow for three weeks of extra time off with pay in the fourth year. LO also wants to make it possible to utilise accumulated time off in the form of extra holiday, a shorter working week, earlier retirement etc. The argument is that the setting aside of funds through negotiations is the most practical solution, because it would not be necessary to record the number of extra working hours worked, and because such funds are easier transferred in the case of a employee changing jobs. Practical problems in relation to the utilisation of accumulated time would be regulated by collective agreements. No position has been taken with regard to the extent to which a new scheme should be established by law, and as such made universally applicable, or whether it should be reserved for those areas covered by collective agreements.

In its commentary, NHO argues that new working time schedules should contribute to a more flexible distribution of work in an employee's working life, but that this should not mean a general reduction in working time for all employees. NHO points to the fact that in the years to come there will be only minor increases in the labour force, with a possible shortage of personnel resources in Norway.

The NHO model

NHO calls for a time-account scheme adaptable enough to meet the needs of individual companies, and which generates short-term flexibility, over not more than a year. Such a scheme would make it possible for each individual employee to transfer their accumulated time off from one period to another within the same year. NHO believes that this will allow companies the necessary flexibility, and at the same time enable each individual employee to adapt working time to individual needs. As such, companies will have access to more human resources in periods of great demand, and employees who wish to do so may work more during such periods. In this way, employees may accumulate enough time to take longer periods of time off in periods with less demand for labour. NHO believes that company-based arrangements are best suited to satisfy the needs of both employers and employees.

LO argues that such an arrangement will beyond doubt satisfy the needs of the employer, but at the expense of the needs of employees. LO believe that the present legal framework, as well as collective agreements, already provides for the possibility of short-term flexibility. LO also believe that the current scheme providing compensation for inconvenient working hours must be retained.

Commentary

The relatively low unemployment rate in Norway has prevented an all-embracing debate concerning the use of reduced working time as a means to increase employment. In recent years, however, the issue of working time flexibility has been put on the agenda by the social partners. One reason for this is the general impression that so-called new and innovative working time schedules have only to a limited extent been employed in Norwegian working life, and the employer side especially has seen this as an impediment to Norwegian industry. Another reason has been the fact that LO recognises the diversity of needs among its members, and for that reason does not want to choose priorities on behalf of its members - between increased holiday and shorter working hours, or increased holidays and reduced pension age etc. This led the organisation, at its last convention in 1997, to adopt a proposed scheme in which employees at different stages of life may choose between different types of flexible working time schedules (NO9705110F).

The LO-NHO report also indicates that there is a gap between the social partners when it comes to so-called time-account arrangements. LO wants to see a scheme in which shorter working time is tied to lower wage increases. The logic of such a scheme is that social reforms are tied to moderate wage settlements, and are regulated within the legal framework or by collective agreements. As such, LO's model is very much based on the principles of traditional Norwegian incomes policy. The NHO model, on the other hand, takes as its point of departure existing company-based schemes, in which standard average working hours are calculated over a year, or parts of the year, rather than on the basis of a day, which is the case today.

Although the report indicates a significant gap between the parties, it does not follow that the debate has come to a standstill. There is an willingness expressed by both sides to change present working time schedules in order to safeguard greater flexibility for both individual employees and companies. It follows, then, that different compromise solutions must be considered when the parties meet during negotiations. Such a compromise may, for instance, take the form of a combination of central and company-based solutions. The 2000 wage settlement may generate consensus about certain principles, though further deliberations may be necessary before the parties can agree on concrete working time models. The need for further deliberation and experimentation is also emphasised by the committee members. The 2000 wage settlement may therefore be the start of a process to establish a new working time scheme, and not its end. (Kristine Nergaard, FAFO Institute for Applied Social Science)