Board refuses to extend collective agreements on wage dumping

In December 2010, the Norwegian Tariff Board decided not to allow the extension of two of the four collective agreements presently in general application in sectors of the Norwegian economy. The board argued that the general application resolutions in these agreements have served their purpose, and that there is no longer a need for them. The decision was made against the advice of the Tariff Board representative from the employee side, and has been criticised by trade unions.

Background

The general application of collective agreements has been used as a means to prevent social dumping in the Norwegian labour market, particularly in connection with increased labour immigration from Eastern Europe. The Tariff Board (Tariffnemnda) of the Ministry of Labour has the authority to make decisions as to whether collective agreements should be generally applicable to all workers in Norway. After the EU enlargement of 2004, at the request of the Norwegian Confederation of Trade Unions (LO), the Tariff Board made selected provisions in a total of four collective agreements generally applicable in all or parts of the country (NO1003019I, NO0912029I, NO0808019I, NO0808019I, NO0509103F, NO0411103F). The board’s decisions were made under the Act relating to the general application of wage agreements (Allmenngjøringsloven).

The central precondition for having an agreement, or parts of an agreement, made generally applicable in Norwegian working life, is documented proof that foreign workers are subject to, or may be subject to, wage and working conditions that are inferior to the conditions established in relevant collective agreements, or inferior to what is the norm within a given profession/occupation. A decision made by the board lasts for as long as the relevant collective agreement is in force. Prolonging such a decision after the renegotiation of a collective agreement generally requires a petition for extension to be filed by one of the parties to the agreement. A continuation of the extended provisions does not require new documentation, but the board must determine whether the general conditions for making the decision are still present.

Two out of four agreements prolonged

The continuation of four general application cases was considered by the Tariff Board in December 2010. In two cases the board found that prolongation was not necessary: the proposed extensions of the agreement for manufacturing industry workers and the agreement for electrical workers. The former had been made generally applicable at seven onshore petroleum facilities, while the latter had been made applicable to building sites in the Oslo area in addition to the seven oil facilities. The board decided, however, to prolong the general application resolution in relation to the building sector agreement, making it applicable in all building and construction sites, as well as the Engineering Industry Agreement which was made applicable in all shipyards and offshore building yards in Norway.

The board said it had decided not to allow for continued extension of the manufacturing industry agreement to the petroleum facilities because social dumping no longer seems to be a problem there. The Petroleum Safety Authority (PSA) did not uncover any cases of social dumping at these facilities in 2010, and hence there no longer seems to be a need for extension. The PSA, on the other hand, called for a continued extension, but was not able to gain majority support for its view.

Response of the trade unions

LO and its member unions – the Norwegian United Federation of Trade Unions (Fellesforbundet) and the Electrician and IT Workers’ Union (El&It) – have expressed disappointment with the Tariff Board’s decision. They warn of an increase in low-wage labour competition within these areas. LO points to the poor labour market situation in Europe, and fears that workers from countries with high unemployment will undercut each other to get jobs in Norway. LO is now considering whether new tools are needed to prevent social dumping in these areas. A reversal of the board’s decision depends on LO’s ability to provide new documentary evidence of substandard wage and working conditions, something which has previously been very difficult to obtain.

Kristin Alsos, Fafo