Government to protect transport workers in competitive tenders

The Norwegian parliament adopted new legislation in May 2009 aiming to improve the protection for transport workers in competitive tenders. Up until now, employees of public transport contractors that do not win a new contract have run the risk of losing their job or their individual and collective rights. The new legislation will ensure that the transport workers in these situations are covered by the regulation relating to transfers of undertakings.

New legislation put forward by the Norwegian government in April 2009 will increase the level of protection enjoyed by transport workers in competitive tenders. The proposal was adopted by the parliament (Stortinget) on 26 May 2009.

Background

Since 1994, the Norwegian transport sector has gradually been opened up to free competition. This development has taken different forms, including exposing the public sector to increased competition, the deregulation of public enterprises and relocating them outside the public collective agreement area, as well as increasing competition within those parts of the private sector previously marked by little or no competition.

Competition may in many cases be regarded as competition over the market and not within the market since individual contractors often win an exclusive right on a certain stretch of transport. The contract runs for a limited and fixed period of time, and at the end of this period the contractor has to tender again for the contract for a new period.

Employment protection

Provisions in Chapter 16 of the Working Environment Act (2.2Mb PDF) (Arbeidsmiljøloven, AML) provide protection for workers employed in undertakings transferred from one owner to another. These regulations are based on EU Council Directive 2001/23/EC on the approximation of the laws of the Member States relating to the safeguarding of employees’ rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses. They ensure that rights and obligations in an employment relationship are maintained in the case of a transfer of ownership. Thus, the employees maintain their existing wage and employment conditions, even though their employer changes. These regulations only apply in situations where the change of ownership can be said to imply a transfer of an undertaking. Whether this is the case has to be decided in light of several factors, mainly laid down by the European Court of Justice (ECJ).

Transport workers employed in a company that fails to win a tender for a new period have, up until now, run the risk of losing their job. Depending on the individual situation, the change in contractor may be seen as a transfer of an undertaking, in which case the regulations in Chapter 16 of the AML apply. Otherwise, the employees would have to apply for new jobs in the new contracting company and accept the terms and conditions offered by that company.

New legislation expands protection

According to the amendments (in Norwegian) to the Public/Commercial Transport Act (Yrkestransportloven) and Railways Act (78Kb PDF) (Jernbaneloven), Chapter 16 of the AML will apply in all such tender situations, regardless of whether they can be said to involve transfers of undertakings. The legislation will apply to competitive tenders on public transport by land, sea and rail.

The new legislation is based on the EC regulation No. 1370/2007 on public passenger transport services by rail and by road (106Kb PDF). In addition to the rights laid down by the transfer of undertakings directive, the Norwegian regulation also stipulates that collective agreements and collective occupational pension schemes should be transferred. Regarding the collective agreement, the new contractor may avoid being bound by this condition by informing the relevant trade union within three weeks of the transfer.

To prevent existing contractors employing the transferring workers from gaining a competitive advantage over other tenderers, information on these workers shall be distributed to other tenderers. Such a notification should include the number of employees, their age, seniority and wages, as well as information on other working conditions.

Views of social partners

In 2001, three trade unions – the Norwegian Transport Workers’ Union (Norsk Transportarbeiderforbund, NTF), the Norwegian Union of Railway Workers (Norsk Jernbaneforbund, NJF) and the Norwegian Seafarers’ Union (Norsk Sjømannsforbund, NSF) –presented a joint demand to the government that workers should have the same rights in connection with competitive tenders as in transfer situations. They claimed that the liberalisation of the transport sector in the 1990s had led to job insecurity for workers in this sector. In its 2005 joint political platform, the present government promised to revise the legislation in light of this demand, and the adopted legislation may be seen as a fulfilment of this promise.

The employer side, on the other hand, opposed the proposal. Employers argued that the government should not give competitive advantages to some workers and economic sectors; competitive tenders are also common in other sectors where such regulation does not exist. Furthermore, the employer side argued that information regarding the employees may be outdated at the time of the actual transfer, making it difficult for tenderers to estimate actual costs.

Kristin Alsos, Fafo