New collective wage agreement concluded in public sector

In May 2007, the social partners in the public sector concluded agreements for this year’s wage settlement. The negotiations will result in an average wage growth of between 4.8% and 4.9% for Norwegian public sector employees in 2007. This year, no funds have been set aside for decentralised bargaining at municipal level, whereas such bargaining will be possible at state level.

On 1 May 2007, the public sector social partners reached agreement regarding this year’s wage settlement. The agreement is deemed a so-called ‘intermediate settlement’, which means that only wage rates in the bi-annual collective agreements are subject to renegotiation. At both state and municipal level, the social partners managed to conclude agreements, which will generate a wage growth of between 4.8% and 4.9%. The wage growth figures include so-called ‘wage carry over effects’ – that is, the effect of wage increases awarded in 2006 on wage growth rates for 2007.

Terms of wage settlement

The results of the negotiations in the three public sector bargaining areas were as follows.

In the state sector:

• a general increase ranging from NOK 4,300 (about €530 as at 12 June 2007) to NOK 8,200 (€1,010) from 1 May 2007;

• additional pay adjustments for most groups from 1 July 2007;

• wage increases amounting to, on average, NOK 9,500 (€1,170) for 2007;

• a fund is to be set aside for local-level wage adjustments of 0.5% from 1 July 2007.

In the municipal sector, with the exception of the capital city, Oslo:

• a general increase of NOK 7,500 (€924) in addition to a rise of 1.4% of the present wage level (between about NOK 11,500 (€1,417) and NOK 12,800 (€1,578) for most groups) from 1 May 2007;

• no funds are to be set aside for local-level wage adjustments.

In the municipality of Oslo:

• a general increase of 3.1%, or a minimum of NOK 9,000 (€1,109), from 1 May 2007;

• no funds are to be set aside for local-level wage adjustments.

Negotiations run relatively smoothly

With the exception of the Federation of Norwegian Professional Associations (Akademikerne) in the municipality of Oslo, all of the main confederations reached agreements with the employers in this year’s bargaining round. Akademikerne refused to accept the original proposal. Negotiations continued with the assistance of the state mediator, and an agreement was eventually reached on 23 May 2007. The fact that the majority of the social partners reached agreement without having to seek the intervention of the state mediator suggests that this year’s negotiations were relatively uncontroversial.

Cooperation and coordination between the bargaining cartels of the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO), the Confederation of Vocational Unions (Yrkesorganisasjonenes Sentralforbund, YS) and the Confederation of Unions for Professionals, Norway (Hovedorganisasjonen for universitets- og høyskoleutdannede, Unio) also continued in this year’s negotiations; this partnership has matured in recent years.

Both the employee and employer representatives have expressed their satisfaction with the results of the settlement. LO and YS are also satisfied with the gender equality profile of the negotiations. Although Akademikerne welcomes the amounts set aside for decentralised, local-level bargaining this year, it argues that the current wage system is still not in line with modern working life.

Decentralised bargaining

Contrary to previous practice, no funds have been set aside for local-level bargaining in the municipal sector in 2007, in other words for bargaining at municipality level. However, this year’s municipal sector bargaining round is unique in that, in 2006, the employers had already committed themselves to parts of the central increases granted in 2007. Thus, there was little room for setting aside large funds for decentralised local-level bargaining in 2007. In the state sector, on the other hand, negotiations at decentralised level will take place as usual in 2007.

The distribution of wage increases at either central or decentralised level has been a subject of regular controversy in the public sector. The decentralised-level wage fund will often be distributed as individual pay increases, albeit through negotiations with the trade unions. In relation to this issue, the employers and Akademikerne would like to see far more local-level bargaining taking place. Conversely, the other main trade union confederations would prefer to maintain a system of general increases awarded through negotiations conducted at central level (NO0606029I).

Commentary

The pay negotiations in the public sector have culminated in an economic framework of between 4.8% and 4.9%. This is significantly higher than the results anticipated for the private sector negotiations (NO0703039I). Thus, it further reinforces a principle by which the economic framework for pay negotiations in the public sector is set on the basis of the average wage growth obtained for both blue-collar and white-collar workers in the manufacturing sector.

Kristine Nergaard, Fafo Institute for Labour and Social Research