Boycott forces company to sign collective agreement

The Norwegian Confederation of Trade Unions used strike action and a boycott to force a company selling workwear to sign a collective bargaining agreement in January 2011. The unions initially applied to conclude a collective agreement with the company in 2008. Its refusal led the unions to decide on collective action. This marked the start of continuous conflict between the company and the unions, which has been subject to court rulings on two occasions.

Background

In 2008, the Norwegian United Federation of Trade Unions (Fellesforbundet) and the Norwegian Union of Employees in Commerce and Offices (HK), both member unions of the Norwegian Confederation of Trade Unions (LO), filed a claim to conclude a collective bargaining agreement with a Norwegian company selling workwear – Bekken & Strøm AS. The company was not a member of any of Norway’s employer organisations, and therefore not bound by agreements stipulating how such claims ought to be processed. The company did not want a collective agreement and decided to reject the claim. Thus, the unions’ only opportunity to enforce the claim was by use of collective action.

Collective action and court battles

In autumn 2010, the unions’ claim was brought before the arbitration authority, which is obligatory prior to taking collective action. Mediation proved unsuccessful and on 22 November the unions gave notice of their intention to strike. The company’s legal representatives argued, however, that the notice was illegal because it had been issued in violation of the procedural rules of the Labour Disputes Act (Arbeidstvistloven (2.14Mb PDF)). The company stated that it would hold the unions liable for damages if the strike went ahead. LO therefore brought the case before the Labour Court. The court found that the notice was lawful, and 19 employees went out on strike on 26 November.

To increase the pressure on the company, the Norwegian United Federation of Trade Unions and HK gave warning of their intention to take sympathy action. In doing so about 500 employees in six different freight-forwarding companies would abstain from handling transport orders from the company as of 13 January 2011. The two unions announced simultaneously that they would also encourage representatives in all Norwegian companies to boycott the company concerned. These threats resulted in the company taking legal action against LO and its two member unions for breaching the Boycott Act (Boikottloven). The company claimed that both the sympathy action and the planned call for a boycott were illegal. The Norwegian legal framework makes boycott illegal when ‘it will harm important national interests or is pursued in a negligent manner, or when there is no reasonable relationship between the interest being pursued by means of boycott and the damage it will cause’.

The issue of whether or not the announced actions were legal was considered by the Oslo City Court in January 2011. The court issued a ruling (in Norwegian, 94Kb PDF) that neither the sympathy action nor the call for boycott could be seen to be acts of negligence. Moreover, in the court’s opinion there was a ‘reasonable relationship’ between the trade unions’ demands for a collective agreement and the damage caused by the actions. The court therefore concluded that the actions were in line with the Boycott Act, and ordered the company to pay LO and its unions NOK 300,000 (about €37,931 as at 24 March 2011) in legal costs.

Following the court defeat, the company decided to sign the collective agreement. The company’s Chief Executive Officer (CEO) stated that the company had believed it had right on its side, but that the ruling was firm and clear, and in view of this it respected the court’s decision. The company also decided to join the Confederation of Norwegian Enterprise (NHO), which was welcomed by the employee side.

Commentary

The conflict over the establishment of a collective agreement in the company serves to illustrate a rare phenomenon in Norwegian working life. There are only a handful of industrial disputes over the establishment of collective agreements each year, and boycotts are rarely used to this end.

Kristin Alsos, Fafo