Minimum wage introduced in green sector

In mid November 2009, the Norwegian Tariff Board decided to make parts of the collective agreement for the green sector generally applicable. Workers affected include those in the agricultural and market gardening industry. Thus, all workers in this industry are entitled to a minimum wage. The decision by the Tariff Board was unanimous, and the new regulation came into force on 1 January 2010. The social partners were generally in favour of this decision.

General application of agreements

According to the Act of 4 June 1993 No. 58 relating to general application of wage agreements, namely the General Application Act (Allmenngjøringsloven), the so-called Tariff Board (Tariffnemnda) is vested with the authority to make decisions about making collective agreements generally applicable to all workers conducting work in Norway. The purpose of the act is to ensure foreign workers’ wage and employment terms in line with those of Norwegian workers. So far, decisions regarding the general application of agreements have been made in relation to collective agreements in sectors such as construction, metalworking (mainly shipyards) and electrical work (in parts of Norway) (NO0808019I, NO0612029I, NO0411103F, NO0509103F).

As part of the transitional arrangements introduced in connection with EU enlargement, employees from the new eastern European Member States have had to apply for work permits to conduct work in Norway. Moreover, within the green sector, such a work permit has also been conditioned upon individual employment contracts having minimum rates of pay as defined in the collective agreement. Since the lifting of these requirements on 1 May 2009, the Norwegian Labour Inspectorate (Arbeidstilsynet) has reported a decline in wage levels within this industry.

Decision by Tariff Board

The petition to make the collective agreement in the green sector generally applicable was submitted by the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO), which, together with its affiliated trade union the Norwegian United Federation of Trade Unions (Fellesforbundet), is party to the collective agreement. The party representing the employer side is the Norwegian Association of Agricultural Employers (Landbrukets Arbeidsgiverorganisajon, LA). LA and the Norwegian United Federation of Trade Unions were both represented on the Tariff Board, together with the board’s permanent members.

A decision to make an agreement generally applicable may only be taken if it is documented that foreign workers are or will be conducting work under conditions that are generally worse than the provisions of the relevant national collective agreement or what is common within the specific geographical area and occupation. Whether or not these requirements have been met has led to significant discord among the board members in relation to previous decisions. However, on this occasion, the employers, workers and the neutral members of the board agreed that the requirements had been met.

Disagreement this time around was related to whether the provisions regarding expenses for commuting, board and lodging were also to be made generally applicable. These provisions, together with the minimum rates of pay, were the only provisions in LO’s petition. However, neither travelling nor board and lodging expenses were in fact regulated in the collective agreement for the green sector. Although the Tariff Board has an opportunity in the General Application Act to include provisions that are not formally part of the collective agreement in question, a unanimous Tariff Board – including the representative from LO – decided not to do so in this case. As part of its decision (in Norwegian, 363Kb PDF) reached on 16 November 2009, the board argued that covering such expenses is not common among Norwegian workers.

Reactions among social partners

With the exception of LO, no other trade unions took part in the consultation round. Most of the employer organisations expressing their opinions were, for the first time, in agreement with LO about the need to make the collective agreement in the green sector generally applicable. The decision received support from the Confederation of Norwegian Enterprise (Næringslivets Hovedorganisajon, NHO), as well as LA, the Norwegian Farmers’ Union (Norges Bondelag) and other organisations within the green sector. The only employer organisation that opposed the decision was the Federation of Norwegian Commercial and Service Enterprises (Handels og Servicenæringens Hovedorganisasjon, HSH). HSH argues, in principle, against using the instrument of making collective agreements generally binding as a means to combat social dumping.

Kristin Alsos, Fafo

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