In the course of March and April 2011, Norwegian social partners negotiated new pay rates in the largest collective bargaining areas in both private and public sectors. The vast majority of Norwegian collective agreements are biennial agreements, and the current ones run from 2010–2012. The 2011 wage settlement is therefore an intermediate settlement, in which negotiations primarily involve the adjustment of pay rates.
In the course of spring 2011, Norway’s social partner organisations negotiated pay rates for both private and public sector workers, which will be part of the biennial collective agreements made for the period 2010–2012. The results of bargaining are expected to generate overall wage growth for 2011 of between 3.65% in the private sector to 4.25% in the municipal sector. Negotiations in Oslo, and in the finance sector, broke down and will now proceed to compulsory arbitration.
In the course of March and April 2011, Norwegian social partners negotiated new pay rates in the largest collective bargaining areas in both private and public sectors. The vast majority of Norwegian collective agreements are biennial agreements, and the current ones run from 2010–2012. The 2011 wage settlement is therefore an intermediate settlement, in which negotiations primarily involve the adjustment of pay rates.
Private sector
In the private sector, negotiations were carried out as a coordinated settlement, meaning that all the collective agreements between the trade unions in the Norwegian Confederation of Trade Unions (LO) and the national associations of the Confederation of Norwegian Business and Industry (NHO) are renegotiated collectively. Prior to the settlement, NHO argued that the competitive situation of Norwegian industry called for a moderate wage settlement, and, as such, did not want to see any wage increases at central level in 2011. LO, in turn, wanted to see a general pay increase for all.
On 31 March the bargaining parties agreed on a pay increase of NOK 2 (€0.25 as of 17 June 2011) per hour, as well as an additional increase of NOK 1 (about €0.13) for low paid workers, subject to collective agreements where pay levels are less than 90% of the average wage of manufacturing industry workers. Such a low-pay increase will include around one quarter of all workers in the private sector agreement areas of LO-NHO. Improvements were also made to the severance pay scheme.
It is estimated that the private sector wage settlement will generate a wage increase of 3.65% for 2011, including any increases given in company level bargaining. Company level negotiations are carried out in large parts of the private sector immediately after central bargaining, in order to avoid any industrial action.
The result of the LO-NHO agreement is then used as a blueprint in other parts of the private sector.
Public sector
Negotiations in the public sector take place after the private sector bargaining round.
In the state and central government sector the bargaining parties agreed on a general pay increase for all groups of workers. It varies from NOK 7,000 (€890) per year for the lowest paid to a 1.72% increase for the highest paid employees.
As such, the lowest paid are secured a higher percentage increase in pay than that awarded to medium or highly paid workers. The wage settlement in the state sector is estimated to have generated annual wage growth of just under 4% for 2011.
In the municipal sector, the social partner organisations agreed on pay increases within a framework of 4.25%. The general increase is a blueprint of the increase given in the state sector.
Commentary
The 2011 collective bargaining round has drawn to a close for most Norwegian workers and the bargaining parties have, on the whole, managed to reach agreements without having to call on the State Mediator. This is not surprising considering the fact that agreement is traditionally a lot easier to reach in an intermediate settlement, since pay is the only issue on the bargaining agenda.
In some areas, however, agreement was not concluded because of a breakdown in negotiations. These include the negotiations in the municipality of Oslo, which is a bargaining area in its own right, and in the finance sector. These negotiations will now be subject to compulsory arbitration before the parties are allowed to resort to industrial action.
The 2011 wage settlement has taken place in a period when the Norwegian economy is characterised by moderate growth. The unemployment rate in the first quarter of 2011 was 3.2%, which is a fall of 0.5 percentage points from the corresponding period in 2010.
The results of the negotiations this spring, together with recent figures on the 2010 wage settlement, mean that projections for wage growth in 2011 have been adjusted upwards, from 3.25% (estimated from Autumn 2010) to 3.9% (estimated in May 2011), as given in the national budget report (in Norwegian, 1.5Mb PDF)).
Kristine Nergaard, Fafo
Eurofound recommends citing this publication in the following way.
Eurofound (2011), 2011 wage talks draw to a close, article.
