New government paves way for labour reforms

The new coalition government in Norway, formed by the Conservative Party and the Progress Party in October 2013, opens up the possibility of new flexibility in employment relations, particularly the possibility of making temporary employment contracts easier for employers to use and of revising working time regulations. However, the new Minister of Labour and Social Affairs has stressed that tripartite negotiations between the social partners will continue.

Background

In the parliamentary elections of 2013, Norway’s centre-left government was replaced by a right-wing coalition of the Conservative Party (Hoyre), whose leader Erna Solberg is the new Prime Minister, and the Progress Party (FrP). The new government will seek support for their political platform from two smaller parties, the Christian Democrats (KrF) and the Liberal Party (Venstre). After the election, all four parties agreed the basic guiding principles for a new government, although the two larger parties were to be the coalition partners.

The new government announced that it would change the political landscape with a series of tax reforms, focusing on road and railways and the increased use of public-private partnerships to improve transport infrastructure, and by using more private service providers to increase freedom of choice in the welfare system. It also said it would simplify bureaucratic processes for the business community.

Labour reforms

The new government wants to help unemployed people find work instead of relying on welfare schemes. It plans to review the Norwegian Labour and Welfare Administration (NAV), and will re-evaluate many welfare schemes, including the special retirement arrangements for public sector workers.

However, the government has not announced radical changes in public welfare benefits and nor has it said it will change the generous sick leave scheme which guarantees 100% of a worker’s pay from the first day they are unable to do their job because of illness or injury. However, a stricter sick leave policy will prohibit individual general practitioners from authorising more than six months’ sick leave.

The government has also said it intends to continue the previous government’s fight against social dumping although it will re-evaluate polices on this issue (NO1201019I). Measures to tackle involuntary part-time work, another issue that has been high on the agenda in recent years (NO1103019I, NO1308029I), will also be a priority.

The same proportion of trade union membership fees will remain tax-deductible as in 2013 to help encourage what the government describes as a ‘functioning tripartite relationship’.

Sunday trading will be reviewed and proposals for opening hours and a new legal framework for Sunday trading will be discussed with the social partners. The aim is to negotiate viable working time arrangements and encourage employee participation.

More flexibility in the labour market

During the election campaign, labour market flexibility and employment protection were controversial issues, and reforms to working time and temporary employment were widely expected to be included in the Working Environment Act. The government insists that it intends to preserve permanent employment as the basis of Norway’s employment relations.

However, it has also signalled that it wants to make temporary contracts easier for employers to use, to help disabled people, older people and young people to enter the labour market. It wants more flexible working time regulations, especially for the calculation of working hours, alternative arrangements for shift work and the use of overtime. To address these issues, the government will set up a committee to examine working time arrangements and how they can extract more capacity from the labour force.

Social partners’ reactions

In recent years, the dominant employers’ organisations have called for more flexible working time arrangements and easier access to temporary employment contracts. These organisations have been positive about the government’s plans for deregulation.

Kristin Skogen Lund, Director General of the Confederation of Norwegian Enterprise (NHO), said the more flexible use of temporary employment contracts would help ease the entry of young people and other vulnerable groups into the labour market. Changing the way average working time is calculated could improve conditions for employees who need to adjust their working life to their family situations, she added.

The dominant union organisation, the Norwegian Confederation of Trade Unions (LO) argued that the government’s reforms will weaken the tripartite system of industrial relations through a long series of minor reforms that will eventually undermine the positive relationship between the social partners.

Among the issues that have angered the trade unions are the proposals to introduce Sunday trading, the planned reforms to the use of temporary employment contracts, and changes to the rules for part-time work.

Magnus Mühlbradt, Fafo

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