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In April 1997, the Norwegian Supreme Court found the Government not guilty of abusing compulsory arbitration in order to stop industrial conflict. The Federation of Offshore Workers' Trade Unions (OFS), which brought the domestic lawsuit against the Government, lost on all counts.
In a judgment delivered on 10 April 1997, the Norwegian Supreme Court dismissed the OFS's claim that the Government had abused its right to use compulsory arbitration in order to stop an industrial conflict. The issue concerns the use of special Acts of Parliament to put an end to unresolved wage negotiations by means of enforcing a peace obligation and arbitration with binding effect. The Supreme Court's ruling was of particular interest because Norway has repeatedly been criticised by the International Labour Organisation's Freedom of Association Committee for abusing compulsory arbitration in order to prevent or stop industrial conflict.
In 1994, Federation of Offshore Workers Trade Unions (Oljearbeidernes Fellessammenslutning, OFS) gave strike notice for 104 of its offshore members. The negotiating party on the employer side, the Norwegian Oil Industry Association (Oljeindustriens Landsforening,OLF) and the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon,NHO), answered the strike notice by calling a lock-out aimed at all the 3,600 OFS members covered by the collective agreement in question. On the same day that the industrial conflict was made effective, the Minister of Local Government and Labour gave notice that compulsory arbitration would be enforced.
OFS brought a domestic lawsuit against the Government on the grounds that the Government's rapid use of compulsory arbitration meant that the organisation was no longer able to use its right to strike. The organisation wanted to ascertain whether or not the use of compulsory arbitration was in violation of the Norwegian Constitution, and subsidiarily whether Norway was bound by international conventions not to use arbitration to resolve industrial conflicts where lives, health or personal security were not at stake. In the latter case, OFS argued that international law, for example ILO Conventions 87 and 98, prohibits the use of compulsory arbitration, even though Norwegian law allows it.
The Government, represented by the Ministry of Municipal and Labour Affairs, argued that the Constitution does not hinder the use of compulsory arbitration, and neither does the ratification of international conventions. Subsidiarily, the Government argued that Norwegian domestic law takes precedence over relevant conventions, even if the latter were interpreted in a restrictive manner relative to how compulsory arbitration is practised in Norway.
The Supreme Court found that the principles of the Constitution were not a hindrance to passing Acts of Parliament which could enforce compulsory arbitration in cases where mediation had not led to agreement, and where vital societal interests were at stake if work was to stop. Neither did the Supreme Court find that the ratification of ILO Conventions 87 and 98 by the Norwegian Government restricted in any way the Government's ability to use compulsory arbitration to resolve industrial conflicts.