Agreement reached in private sector bargaining round for 2009

During the spring of 2009, the social partner organisations in Norwegian working life concluded collective agreements following the bargaining rounds in large parts of the private sector. The agreements include a general wage increase for all employees, and additional low-wage increases in sectors with a low average wage. Company-level parties may, depending on the company’s financial situation, agree to postpone or ignore these nationally agreed pay adjustments.

Negotiations over pay rates commence

The 2009 spring wage settlement commenced in March with negotiations over pay rates in the nationwide collective agreements between the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO) and the Confederation of Norwegian Enterprise (Næringslivets Hovedorganisasjon, NHO) within the LO-NHO bargaining area. The 2009 collective bargaining round is a so-called intermediate settlement, which means that the parties mainly negotiate adjustments to pay rates provided for by the biannual agreements, presently running from 2008–2010. In the private sector, these negotiations take place between the main confederations at national level, such that the agreement concluded will be made applicable to all the collective agreements entered into between LO-affiliated trade unions and NHO-affiliated employer organisations.

The general council of LO put forward its bargaining claims in February 2009, demanding a general improvement in workers’ purchasing power. LO rejected the argument that the current economic situation requires a freeze on wage growth. Moreover, the confederation highlighted the importance of maintaining business as usual in terms of wage formation, as well as other types of income formation, in order to prevent reinforcing tendencies towards stagnation in the national economy. NHO’s board, on the other hand, emphasised the importance of maintaining the competitiveness of Norwegian industries, and highlighted the need, in light of the present economic situation, to keep wage growth to a minimum in 2009.

New agreements

Negotiations between LO and NHO commenced on 20 March 2009. On 31 March, the parties agreed on a general hourly pay increase of NOK 1.00 (about €0.11) for all employees and an additional low-wage increase of NOK 1.00 (€0.11) an hour for employees in industries where the average wage is below 90% of the average wage of ordinary manufacturing industry workers. The same results were made applicable in the negotiations between the Confederation of Vocational Unions (Yrkesorganisasjonenes Sentralforbund, YS) and NHO. In large parts of the private sector, company-level pay negotiations will also take place. These negotiations will, as usual, take into account the economic situation of the individual companies, as well as company profitability and future prospects. The parties also agreed that general pay increases awarded at national level may be postponed or ignored in situations where company finances are poor, although only on the basis of agreement between the company and the trade union representatives in the enterprise.

Both LO and NHO are satisfied with the bargaining result, which, together with the wage carry-over from 2008, is expected to generate an overall wage growth of 3.8% from 2008 to 2009.

Agreements have also been reached in other parts of the private sector, including the agreement area of the Federation of Commercial and Service Enterprises (Handels- og Servicenæringens Hovedorganisasjon, HSH) covering wholesale and retail trade and other service activities, and the financial services sector covering banks and insurance companies. In these areas, the bargaining results were the same as in the LO-NHO agreement area, including the clause allowing the company-level parties to postpone or ignore implementing pay increases in light of the company’s financial situation.

Commentary

The 2009 negotiations in the private sector have proceeded in an orderly fashion, and the parties involved have managed to conclude agreements without the help of the national state mediator. The current economic situation has meant that both sides of industry – employers and trade unions – have been interested in achieving a moderate wage settlement without industrial conflict.

Negotiations in the public sector are expected to be more demanding. For instance, agreement is also to be sought on important and difficult issues related to public sector occupational pension schemes as well as the agreement-based early retirement scheme (Avtalefestet Pensjon, AFP). The deadline for concluding new agreements in the state and municipal sectors was the end of May 2009; the results are then to be subject to member ballots in the relevant organisations.

Kristine Nergaard, Fafo

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