'Inclusive working life' agreement prolonged despite failure to achieve objectives

In November 2003, the Norwegian social partners and government met to review and discuss the 'agreement for an inclusive working life' they concluded in 2001 with the aim of cutting sickness absence, improving the employment situation of people with disabilities and increasing the average actual retirement age. There was unanimous support for a continuation of the joint efforts, despite general recognition of a failure to achieve the desired objectives of the agreement.

In October 2001, the Norwegian government and social partners entered into an agreement to create 'a more inclusive working life' (NO0110107F). The main objectives of the 'inclusive working life' (inkluderende arbeidsliv, IA) agreement are to reduce sickness absence by 20% over the period 2001-5, to improve the employment situation of people with disabilities ('impaired functionality'), and to increase the average actual retirement age. A number of measures were proposed to this end. In October 2003, approximately 46% of all Norwegian employees were covered by local agreements between employers, employees and social insurance authorities based on the IA agreement, which represents a significant increase from 25% at the end of 2002 (NO0301104F). A joint committee, with representation from the main social partner organisations and relevant governmental bodies and ministries, was set up to evaluate the agreement in the autumn of 2003. It was given a mandate to establish the basis for a discussion and evaluation to take place in November. The parties also had the option of terminating the agreement if it became evident that the objectives were not being achieved.

On 18 November 2003, the social partners and the government duly met to review and discuss the 2001 IA agreement. There was unanimous support for a continuation of the joint efforts to create an inclusive working life, despite a general recognition of a partial failure to achieve the desired objectives of the agreement. Sickness absence has continued to increase so far during the period covered by the agreement. However, the social partners argue that it is too early to assess the effects of the agreement, and that new measures should be introduced in order take full advantage of the opportunities generated by the accord.

Sickness absence

The main goal of the IA agreement is to reduce the sickness absence rate. However, the overall sickness absence rate has continued to increase throughout the agreement period, from 7% in the second quarter of 2001 to 7.8% in the second quarter of 2003. This constitutes an increase of 11.5% (or 10% when gender and age differences in the workforce are taken into account). The most significant increase has come in the area of long-term sickness absence (absence covered by doctors' certificates), while there seem to be a slight drop in short-term absence (self-reported sickness), despite changes to the regulatory framework allowing for increased use of self-reporting (NO0110107F). The extent to which there are significant differences in absence patterns between companies with and without IA agreements is not readily revealed by the available statistics. There are, however, indications to suggest that IA agreements may have contributed to a reduction in sickness absence in some companies, or at least halted growth rates. Figures from the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO), based on a survey among its member companies, seem to sustain such an argument. On the whole, however, available statistics are not reliable enough to provide any concrete evidence on the situation.

Thus, the goal of reducing the sickness absence rate by 20% before 2005 is no longer seen as realistic by the joint IA committee. Indeed the developments mentioned above suggest that a 30% reduction is required in the next two years if the objective of 20% reduction set by the agreement is to be met.

Employment of people with disabilities and average retirement age

Figures from Statistics Norway (Statistisk Sentralbyrå, SSB) show that there has been a reduction in the number of people with disabilities in employment since the IA agreement was concluded. The proportion of people with 'impaired functionality' who are in employment has fallen from 46.6% in the second quarter of 2002 to 42.5 % in the second quarter of 2003. Although there has been a drop in the employment rate for the whole population over the same period, it has not been as significant as for those with disabilities. The existence of such developments has been supported by research carried out by the ECON institute, indicating that employers are more concerned with reducing sickness absence than recruiting more people with disabilities.

It is also evident that the IA agreement has not had desired effect of increasing the actual average retirement age. In fact there has been a slight drop in the expected retirement age in recent years, and there are no obvious differences in this regard between 'IA companies' and others.

The committee concludes on a more general note that the IA agreement has not been in operation long enough to say anything about its effects on the employment situation of people with disabilities and the average actual retirement age.

Positive side effects and review

In light of the scarce statistical evidence on the effects of the IA agreement, the committee emphasises the need to review the measures introduced, in particular those relating to the employment situation of people with disabilities. The future focus of the IA efforts should thus be, according to the committee, on developing flexible and purposeful measures to be applied at company level. A joint committee is presently considering possible new measures, and is to deliver its recommendations in mid-December 2003.

However, notwithstanding the lack of statistical evidence in relation to the main objectives of the IA agreement, the committee identifies positive side-effects. Case-studies carried out in 16 companies by ECON, commissioned by the committee, show that routines for the close monitoring of employees on sick leave have been established, personnel policies have improved, and there are fewer conflicts at work on this issue between employee representatives and management. Furthermore, the experience with extended self-reporting has been good, in that there are no indications to suggest an increase in 'malpractice'.

Views of the social partners

The social partners are unanimous in their support of a continuation of the IA scheme. They argue that the concept of IA has become entrenched in the Norwegian labour market, and that it may bring about concrete results over time. They all also agree that some measures need to be changed.

Commentary

Although the objectives of the IA agreement have so far not been met, it is important to bear in mind that the initiative has come at the time when the Norwegian economy is witnessing an economic downturn with increasing unemployment. Vulnerable groups such as people with disabilities will normally suffer the most during such periods, and this may serve to explain why the objective of increasing employment among this group has been difficult to accomplish.

However as mentioned above there are seen to be some encouraging side-effects of the agreement. These side-effects may in a more long-term perspective serve the goals of the agreement, not least that of reducing the sickness absence rate. As such, many commentators believe that in due time, companies that enter into IA agreements may be able to reduce sickness absence. The fact that the social partners and government show willingness to continue their efforts seem to suggest that there is confidence in the long term effects of the agreement.

Equally important, at least for the trade unions, is the fact that a continuation of the IA agreement entails maintenance of the present sick pay scheme, which is controversial and has been under threat for a long time because of its relatively generous provisions. The government has pledged that the scheme will remain untouched during the whole period of the IA agreement. (Håvard Lismoen, FAFO Institute for Applied Social Science)

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