Lidl enters Norwegian market

In September 2004, Lidl opened its first nine outlets in Norway. In the light of allegations about the German-based retail multinational's labour practices in other countries, its arrival has caused some uncertainty among Norwegian trade unions, but so far the company has adopted an accommodating approach to the unions.

On 23 September 2004, the German-based retail multinational, Lidl, opened its first nine outlets in Norway. The entry of this forcefully expanding 'hard discount' chain into the Norwegian retail market has provoked concern among trade unions, politicians and larger Norwegian retail companies. Experience from abroad, and in particular allegations that Lidl has poor labour practices, has fuelled opposition to the company, which has been strengthened by the secrecy with which it is said to pursue it business activities, reportedly keeping its strategies and employment practices under wraps. However, as far as industrial relations go, the company has entered into dialogue with Norwegian trade unions, and is in some areas seen as going further towards satisfying union demands than some Norwegian-based retail companies.

In the trade union movement, there is significant uncertainty about Lidl's entry into the Norwegian market. So far, however, the retailer has taken a seemingly accommodating approach towards the unions. Its first move was to join the Federation of Norwegian Commercial and Service Enterprises (Handels- og Servicenæringens Hovedorganisasjon, HSH), the largest and most important organisation for employers in the service sector. HSH has a nationwide collective agreement with the Norwegian Union of Employees in Commerce and Offices (Handel og Kontor, HK). Although not bound by this agreement, Lidl has entered into a dialogue with HK. HK has been allowed to examine Lidl’s employment contracts, and these have to some extent been changed on the basis of recommendations made by the union. Following talks between union leaders and Lidl management, employees received on their first day of work an envelope containing, among other items, an employment contract and information about HK. Moreover, Lidl has stated that it intends to act in accordance with the pay rates within the HK collective agreement area. Finally, the retailer has gone as far as to introduce what is regarded as a novelty in the Norwegian retail sector - an occupational pension scheme for all employees, partly paid for by the employer. There are few, if any, employees in the large domestically-based retail chains subject to such occupational pension schemes.

However, HK is still vigilant in its approach. Half of the employees in Lidl's first outlets, according to newspaper reports, are temporary agency employees, something that was not met with enthusiasm by the union. The company has, however, stated that most of these workers will be given open-ended employment after a while. Thus, HK, at both central and local levels, has pledged that it will closely monitor developments within the company, and it will work hard to recruit members in the months to come - there are reportedly already Lidl workers joining the union.