LO private services unions demand greater focus on their sector

LO Service, the private services sector bargaining cartel of the Norwegian Confederation of Trade Unions (LO), held its annual conference in November 1999. The unions involved emphasised that LO must take into consideration in its policy formation the increasing significance of the service sector. A proposal from the deputy leader of LO to seek an amalgamation of LO, the Federation of Norwegian Professional Associations (AF) and the Confederation of Vocational Unions (YS), received considerable attention.

LO Service, the bargaining cartel within the Norwegian Confederation of Trade Union (Landsorganisasjonen i Norge, LO) for trade unions organising in the private services sector, held its annual conference in November 1999. The agenda included a discussion on the future role of LO in Norwegian working life. Several speakers called for LO to come to terms with an environment in which the manufacturing sector no longer establishes the main premises for the development of the confederation. The leader of the Norwegian Transport Workers' Union (Norsk Transportarbeiderforbund, NTF), Per Østvold, pointed to the fact that the share of manufacturing workers in the Norwegian labour force is clearly declining. Yet, despite this trend, the political platform of LO is dominated by the diminishing proportion of wage earners employed in manufacturing industry. Mr Østvold further argued that the service sector is becoming more important for employment, and that it contains many unorganised employees, low-paid groups and women working part-time. In order to attract these groups, the organisation must rethink its strategies and priorities. Representatives from other service unions also stressed the need for LO to recognise the growing importance of the private service sector. In response, LO's deputy leader, Gerd Liv Valla, argued that union density is low in the private service sector, and that only half of those who are unionised are members of LO. Although Ms Valla emphasised that LO should intensify its efforts vis-à-vis the service sector, she warned against possible competition within the confederation.

In his introduction, Mr. Østvold called for a vertical and sector-based organisation of LO, with different groups of employees in the same branch being affiliated to the same trade union and being covered by the same nationwide collective agreements. One reason for this is that the traditional division between white- and blue-collar workers, on which bargaining arrangements are currently based, is becoming blurred. However, proposals calling for greater utilisation of vertical agreements have so far been met by opposition from unions organising white-collar workers. LO has thus not been able to reach a decision which will contribute to changing the present practice.

Merger proposals

An issue which received a lot of media attention and caused sensation at the conference was the controversial proposal by Ms Valla for a possible future merger of LO with two other main union confederations, the Federation of Norwegian Professional Associations (Akademikernes Fellesorganisasjon, AF), the Confederation of Vocational Unions (Yrkesorganisasjonenes Sentralforbund, YS). Ms Valla argued that such a merger would be a reasonable response to the challenges facing the trade union movement in the years to come. She also wanted to see the various teachers' organisations within such an all-embracing union confederation (NO9811196F), but excluded the possibility of the main confederation for employees with a higher education, Akademikerne, joining. She stressed, however, that the process of establishing such an organisation would take time.

The proposal was well received by many commentators, among them AF's previous leader, Magne Sognvoll, who was invited to speak at the conference. Mr Sognvoll recommended closer cooperation between the three confederations, provided that LO ended its close relationship with the Norwegian Labour Party (Arbeiderpartiet, AP). The proposal was. however, argued to be of little relevance to the present leaders of AF and YS, since they are already considering a merger between the two organisations (NO9907140F).


When the private sector service unions demand special attention in LO's policy formation, they are arguing along the same lines as the public sector unions. One may question, however, the likelihood of conflicts emanating from this sector, compared with the potential grounds for conflicts between the private and public sectors. The extent to which the private service sector unions are willing, and have the ability and resources, to coordinate their actions in the development of a stronger and more independent sectoral policy can also be disputed.

At LO Service's annual conferences, approximately half of the member unions of LO are represented, all of which have all, or large parts, of their membership base in the private service sector. Although a significant number of LO unions unionise employees in this sector, a small majority of its members still come from the manufacturing industry and building and construction sectors. The reason is that large parts of the private service sector are characterised by a relatively low union density, as in areas such as the wholesale and retail trade, and hotels and restaurants. Here only 20%-30% of employees are unionised, compared with 60% in the manufacturing industries. Knowledge-based activities such as information technology also have low union density. The exceptions to this rule are areas such as private transport and banking and insurance, where union density is high. However, employees in banking and insurance are by and large not organised by LO. Unlike the other Scandinavian countries, unemployment benefits in Norway are not administered by the trade unions themselves, and thus do not provide incentives for union membership. Although increased recruitment of members within the private service sector branches is an important ambition, there is little evidence to suggest that this has been successfully accomplished. The unions operating in the wholesale and retail trade and hotels and restaurants also experience the hardships of trying to increase membership in branches marked by high labour turnover, small enterprises, and a significant number of employees working part time.

LO Service has to only a limited extent been able to contribute to the development of a more comprehensive sectoral policy within LO. In 1994, four bargaining cartels were established in LO, covering manufacturing industry, services, the state sector and the municipal sector. With the exception of the state sector, these cartels have struggled to establish themselves within the system, and have only to a limited extent had the financial resources and the authority to pursue more wide-ranging organisational activity. Although the cartel structure was meant to contribute to an improved coordination of interests among trade unions, in respect of both pay issues and branch-specific issues, the cartels as such have not been significant players in the formation of wage policies. In the spring of 1999, however, LO Service was responsible for bargaining in the wage negotiations between LO and the Commercial Employers' Association (Handels- og Servicenæringens Hovedorganisasjon, HSH) (NO9905133N). LO Service did this on behalf of LO, which normally coordinates any negotiations in which more than one union is involved. It remains to be seen, however, the extent to which this model is utilised in other bargaining areas in future.

The call for a greater focus on the service sector has not lead to noticeable disputes between the various unions in the private sector. So far there has been a general consensus within LO about the manufacturing industry taking precedence in pay bargaining. There is also a tradition in LO of two branches taking the lead in sectoral bargaining, one of which is a low-pay bargaining unit within the area of the private sector covered by the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO). In recent years, industry-wide negotiations have also seen the inclusion of settlements in which low-pay groups without the benefit of additional company-level bargaining receive the highest centrally agreed increases. This mechanism has probably contributed to restricting scepticism over present incomes policy to those organisations outside LO, and only to a limited extent within LO itself. (Kristine Nergaard, FAFO Institute for Applied Social Science)

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