Decision postponed on extension of collective agreements

Since 1993, Norway has had provisions in place allowing for collective agreements to be extended to non-members of the signatory organisations, where this will prevent the employment of foreign workers on substandard pay and working conditions. The first application for such an extension, relating to seven onshore petroleum installations, was filed in December 2003 by the LO trade union confederation. In June 2004, the Tariff Board considering the issue decided to postpone its decision, as insufficient evidence of 'social dumping' had been presented. Further documentation will now be gathered.

On 21 June 2004, the Tariff Board (Tariffnemnda) considering a trade union demand for a partial extension of three collective agreements at seven onshore petroleum installations decided to postpone its decision. The reason for this decision was the apparent lack of documentation demonstrating the prevalence of substandard pay and working conditions (ie 'social dumping') at the installation sites concerned. The Board has postponed its decision until the autumn, awaiting more documentation on the matter. If a favourable decision is reached, this would be the first time that 'erga omnes' extension mechanisms - whereby the provisions of a sectoral collective agreement are made binding on non-members of the signatory organisations - have been used in Norwegian working life (TN0212102S).

The Board was called upon to make a decision on a petition for a partial 'erga omnes' extension of three nationwide sectoral collective agreements at seven onshore petroleum installations, filed on 19 December 2003 by the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO) (NO0310102F). The three agreements are: the engineering industry agreement between the Norwegian United Federation of Trade Unions (Fellesforbundet) and the Federation of Norwegian Manufacturing Industries (Teknologibedriftenes Landsforening, TBL); the construction agreement between Fellesforbundet on the one side and the Federation of Norwegian Construction Industries (Byggenæringens Landsforening, BNL) and the Federation of Norwegian Technical Contractors (Tekniske Entreprenørers Landsforening, TELFO) on the other; and the electrical installation agreement between the Electricians & IT Workers Union (EL&IT) and TELFO. LO and the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO) are also party to these three agreements.

This is the first time that a request for an erga omnes extension - an option provided for by the 1993 Act relating to the General Application of Wage Agreements - has been made in Norway. The Act came into force on the same date as the European Economic Area agreement in 1994, and was introduced to ensure that foreign employees working in Norway are subject to the same pay and working conditions as Norwegian employees. The Tariff Board is vested with the authority to make decisions on petitions for the extension of collective agreements. It is an independent body with five members - one each from LO and NHO plus three neutral representatives, including the chair who is an appeal court judge. A decision by the Board may involve only the extension of collective agreements' provisions on individual rights (individual pay and working conditions) and not stipulations of a more collective nature. Although the scope of the Act is limited to foreign workers, a decision by the Board is interpreted as applying to all people performing work within the scope of that decision, ie Norwegian as well as foreign employees.

At first it seemed that sufficient documentation about social dumping practices had been presented to the Board by LO in the present case. The petition appeared to comply with the Act’s requirement that the Board could provide for extension only in cases where the pay and working conditions of foreign workers are verifiably inferior to those of Norwegian workers. Following a short round of hearings among the relevant social partner organisations and public bodies, in which NHO in particular proved highly critical of the Board's proposed decision, a majority of board members changed their original position, arguing that the documentation presented was not a sufficient basis on which the Board could make a legitimate decision. Instead it was decided to call for a postponement in order to find more evidence, including in the form of a hearing of shop stewards at the installation sites concerned, which is to be carried out in August 2004.

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