Wage bargaining begins in the private sector

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Wage bargaining in the private sector commenced on 10 March 1997 with negotiations between the Norwegian Confederation of Trade Unions (LO) and theConfederation of Norwegian Business and Industry (NHO). So far the question of voluntary early retirement has been the most difficult issue and, after around one week, LO broke off the negotiations. Mediation was due to commence the first week after the Easter holidays.

Wage bargaining in the private sector between Landsorganisasjonen i Norge (LO) andNæringslivets Hovedorganisasjon (NHO) commenced on 10 March 1997 when LO's delegation handed over its demands. The demands included an increase in real earnings for groups with middle to low incomes. After approximately one week of bargaining, LO broke off the negotiations. This means that the State Conciliator (Riksmeklingsmannen) was due to initiate mediation between the parties in the first week after Easter. Mediation is quite normal in Norwegian wage bargaining, and the failure to reach an agreement was expected.

The majority of Norwegian wage agreements are two-year agreements which expire during 1998. This year's negotiations are therefore mid-term renegotiations, which always take place centrally, while the parties agree from round to round at which level the main negotiations are to take place. Mid-term renegotiations mainly deal with questions of remuneration, but this year the parties also have to agree on the framework for the extended scheme for voluntary early retirement. The parties agreed to the main principles of this scheme during last year's settlement.

The early retirement issue is considered to be the most difficult in the current negotiations. The most contentious question is the scope of the scheme - how many employees in the age-group from 62 to 63 years are to be covered by the voluntary scheme. So far, NHO has emphasised that the scheme should only cover those employees with long seniority, for example those who have been working since their late teens. LO wants the scheme to have a much wider scope, and has in particular pointed to the fact that many women did not enter the labour market until a later age, and will therefore not be covered by the scheme if NHO's seniority criterion is accepted. In a joint letter to the Government, the parties enquired whether the Norwegian authorities could assist in solving the issue of early retirement. The Prime Minister signalled that the Government is not willing to finance the reform, but is willing to make certain amendments to the tax system and to the accrual system of pension rights. Such arrangements have also previously been part of a voluntary early retirement scheme.

There is also some distance between LO and NHO when it comes to the wage increases. While LO has demanded an improvement in real earnings for groups with annual incomes up to NOK 250,000, the employer side states that there is no room for centrally-agreed increases in those sectors where local negotiations are possible.