New collective agreements concluded in public sector

In May 2000, new collective agreements were concluded in the Norwegian public sector. Apart from providing for a general annual wage increase of NOK 5,000 and extended annual leave, the new agreements will be advantageous to a number of groups with higher education.

On 26 May 2000, most of the social partner organisations in the public sector concluded new collective agreements (NO0006193N). The negotiations culminated in strike action for a small number of organisations, but overall the 2000 public sector wage settlement ended with surprisingly few industrial conflicts taking place.

Background

The bargaining system in the Norwegian public sector is highly centralised, but involves a significant number of trade union organisations. It is divided into three independent bargaining areas in which separate negotiations are carried out; the state sector; the municipal sector; and the municipality of Oslo. Negotiations are carried out by the relevant bargaining cartels of the four main trade confederations. Independent unions are also involved in negotiations, among them the Norwegian Union of Teachers (Norsk Lærerlag), which represents approximately 65,000 -70,000 teachers and pre-school teachers. General wage increases have to be coordinated between the three bargaining areas, since state and municipal workers are all subject to the same wage scale.

The public sector wage settlement was expected to be a demanding affair, because many occupational groups had expressed high hopes of significant wage increases, despite the jointly agreed aspiration of the social partners to maintain moderate wage growth (NO9903120F). Wage developments in the 1990s have led to a compression of the wage structure in the public sector, and many commentators believe this to have put significant pressure on the bargaining system. Furthermore, an equally important problem is the fact that a significant number of employees in low-wage, female-dominated occupations are required to have undergone a relatively long and costly education, which has led to demands for higher wage increases for these occupations. Significant attention has also been given to the fact that the public sector is experiencing problems in recruiting and keeping certain occupational groups, especially teachers and trained (state registered) nurses. The public sector negotiations were also marked by the fact that the initial proposal for collective agreements in the private sector had been rejected, resulting in strike action being taken by several unions in May 2000 (NO0005192F). The private sector settlements usually provide the basis and framework for public sector settlements. Finally, the 2000 bargaining round in the public sector saw for the first time the participation of the new union confederation for academically-qualified staff, Akademikerne (NO9711133F), whose main aim is the development of a more decentralised and individually based system of wage formation in the public sector.

The new agreement in the private sector will generate a wage growth of approximately 4.5%-5%, which is about one percentage point higher than agreed to in advance by the social partners. The public sector settlement is expected to produce wage growth in 2000 of 4.8% in both the state and municipal sectors.

The outcomes

General changes in the state and municipal sectors

• A general annual pay increase of NOK 5,000 per year (which came into effect from 1 May 2000).

• Four days' additional annual leave (with two days introduced in 2001 and two days in 2002).

• A general annual pay increase of NOK 2,200 taking effect on 1 May 2001. There will be no central negotiations in 2001, but funds are set aside for local or sector-level negotiations.

• The parties endorsed the agreement of a continuation of the continuing and vocational training ("competence") reform (NO9901113N) reached in the private sector by the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO) and the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO).

• Improvements to the pensions scheme for higher-paid employees.

Sector-specific changes – state sector

• 1% of the total paybill has been set aside in a common wage fund for central pay adjustments. The increases come into effect on the 15 July 2000, and will entail an average wage increase of 2.2%. Priority is given to employees with higher education, female-dominated groups, and occupations subject to intensive competition and recruitment difficulties.

• A common wage fund of 0.25% of paybill is also set aside for local negotiations. These increases come into effect on 1 September 2000 and entails a wage growth of 0.75%.

• The parties are committed to the establishment of a joint committee with the role of considering the existing wage and bargaining system.

• The economic framework for central pay adjustments and local negotiations in 2001 has been established in this year's settlement.

Sector-specific changes – municipal sector

• Certain groups with higher education (postgraduate training in particular) have been given an improved wage positioning vis-à-vis other groups.

• 0.63% of the total paybill is set aside for local negotiations taking effect from 1 August, which implies a wage increase of 1.5%.

• Working time regulations, the collective bargaining system and the wage system are to be considered by a joint committee.

• The framework for local negotiations in 2001 has been established in this year's settlement.

Special measures for the national schools system

Teachers have long called for an increase in their salaries, and they have received support for their demands from key politicians in parliament. Thus, the fact that teachers' unions approved the 2000 public sector settlement is most probably due to the fact that they expect significant returns in the subsequent negotiations which are due to take place during the summer and autumn of 2000. The main teacher-specific provisions related to the settlement are as follows:

• teachers expect a significant share of the funds set aside for the central pay adjustments and sector-level negotiations in summer/autumn 2000;

• the Minister of Labour and Government Administration, Joergen Kosmo, has promised a package deal to help the national schools system, which may include additional wage increases for teachers. The parties are to initiate a process of deliberation, which will run over a period of three years, with a view to examining matters including the organisation of working time. Pilot projects are to be initiated from the end of 2000. It is presupposed that the rewards deriving from this initiative will take the form of wage compensation, the first part of which will be paid on 1 August 2000;

• teachers will not receive extended annual leave, but as a compensatory measure their wage positioning vis-à-vis other groups will be improved, amounting to an increase of approximately NOK 5,000 per year; and

• the new agreement opens the way for local negotiations within each municipality and county, something that has been strongly opposed by the teachers' unions in the past. The wage conditions of teachers in the primary- and secondary school system employed by municipalities are to be determined in the state sector wage settlements. Municipal sector employers have long called for a transfer of bargaining rights, at both central and local levels, and as such the introduction of local negotiations must be viewed as a compromise.

Strikes in the municipal sector

In the municipal sector generally, as well as in the municipal of Oslo, several unions rejected the proposed agreement and resorted to strike action. These included pre-school teachers represented by the Norwegian Union of Teachers, members of the LO-affiliated Norwegian Union of Social Educators and Social Workers (Fellesorganisasjonen, FO), state enrolled nurses in Oslo, and hospital engineers. Two strikes, which involved hospital engineers and state enrolled nurses in Oslo, were stopped by compulsory arbitration.

Commentary

The public sector wage settlement has a very comprehensive economic framework, allowing most groups significant wage increases as well as giving priority to the most dissatisfied groups. Groups with higher education are expected to do better than most when the remaining negotiations have been completed. Not surprisingly, the Norwegian Union of Municipal Employees (Norsk Kommuneforbund, NKF), organising many low-wage groups in the public sector, seemed reluctant to accept the new agreement. The union nevertheless gave its approval, which may be explained by the relatively high general wage increases awarded. The settlement also seems to indicate a general consensus about giving priority to groups with higher education, such as teachers and state registered nurses. It is too early to assess, however, the extent to which this marks a shift in the wage policy of low pay increases, which many commentators believe to have been a trademark of collective bargaining in Norway throughout the 1990s.

The extent to which the 2000 wage settlement marks the first step in the direction of a less centralised bargaining system in the Norwegian public sector is not yet clear. This will beyond doubt be a step in the right direction from many employees' point of view, and especially for union confederations such as the Confederation of Norwegian Professional Associations (Akademikernes Fellesorganisasjon, AF) and Akademikerne. However, the agreed distribution of wage funds between central and local negotiations may just as well have been a practical solution to achieve the ambition of giving priority to groups with higher education. The distribution of responsibility between local and central bargaining levels is one of the areas which will be subject to deliberation by the parties during the present agreement period.

The wage settlement may also be start of a debate concerning wage formation and the organisation of the national schools system. For the first time, local negotiations over teachers' salaries will be carried out in the various municipalities. At the same time, the parties have agreed to tie wage increases to the development of more efficient ways of organising work within schools, including the introduction of more flexible working time organisation. This may be the first step in the direction of more flexibility within a sector believed by many commentators to be marked by a highly centralised and inflexible bargaining system.

The 2000 wage settlement in the municipal sector may also contribute to the debate concerning the bargaining system itself. As before, strikes have been initiated by unions breaking away from their confederations, and indeed for the first time a member union of LO has refused to follow the recommendations of LO's bargaining cartel in the municipal sector. A public committee is presently considering the legal framework concerning negotiations and strikes, and the committee will most probably also examine the bargaining structure in the municipal sector (NO9906135F). The social partners would also want to contribute to this process, and both the state and municipal sectors will have evaluated the wage and bargaining system in due time before the next main settlement in 2002. (Kristine Nergaard, FAFO Institute for Applied Social Science)