Norway: Two-year wage deals renegotiated

In April 2014, social partners in Norway’s export industries, which set the trend for wage bargaining, concluded a new collective agreement for 2014–2016. The pay increase for all employees covered by it is estimated at 3.3%, but this will not be confirmed until 2015 when company negotiations are concluded.

Wage settlement 2014

All two-year biennial collective agreements in Norway were renegotiated over a six-month period from March 2014. The talks began in many of the manufacturing sectors, which set the trend for negotiations in other sectors. These ‘trend-setting trades’ are the industries most vulnerable to international competition, such as metalworking and textile manufacturing.

The negotiations in this sector took place between the Norwegian United Federation of Trade Unions (Fellesforbundet), a member of the Norwegian Confederation of Trade Unions (LO), and the Federation of Norwegian Industries (Norsk Industri), which is affiliated to the Confederation of Norwegian Enterprise (NHO).

The unions involved did not call for any collective action during the talks, although strikes have occurred in other sectors, especially by teachers.

General pay increase

With the help of the National Mediator, the social partners in the trend-setting trades reached a new collective agreement (in Norwegian, 943KB PDF) on 15 April. It set a general pay increase of NOK 0.75 (€0.08 as at 2 December 2014) per hour. Further pay negotiations will be carried out at company level. The agreement was concluded for a two-year period with pay rates to be renegotiated in 2015.

Additional pay increases were awarded in the textile sector, which is characterised by its low wages, and where company level negotiations seldom take place. Pay rates established in the collective agreements, including minimum wage rates, were also revised.

The total estimate for the nominal pay increase from 2014–2015, including company level negotiations and wage drift, is 3.3%.

Occupational pension

LO had decided to make occupational pensions one of the main topics in this year’s bargaining round, and other federations within LO hoped that Fellesforbundet would reach an agreement that they could follow while negotiating their own agreements. However, Fellesforbundet and Norsk Industri agreed that research on this was needed, including:

  • the question of co-determination when managing occupational pensions;
  • employees retaining pension rights when changing jobs;
  • the possibility of employees being able to pay additional contributions to their individual pension scheme.

Labour migrants

Labour migration was also on the agenda, as it has been in previous bargaining rounds. Following a joint request from Norsk Industri and Fellesforbundet, the Minister of Education and Research Røe Isaksen promised greater funds for language training for labour migrants, and for systems to enable the recognition of foreign technical expertise.

Public sector

The trend-setting trades’ estimated pay increase of 3.3% this year has been emulated by other sectors, including the public sector, and the ability to coordinate wage-bargaining across sectors has been stronger than previously. The public sector unions failed to secure their original goal of higher increases to compensate for lower wage drift in 2013 (and the years before 2013). However, if wage increases in the manufacturing sector exceed the 3.3% estimate, public sector unions have secured an option to match this in the 2015 bargaining round.

Teachers on strike

Representatives of municipalities and unions reached agreement in May 2014 with assistance from the National Mediator. However, members of the teachers’ trade union, Union of Education Norway (Utdanningsforbundet), as well as several other, smaller, teachers’ unions, rejected the settlement and went on strike over a new working-time agreement that increased the number of hours teachers have to be at school. The strike started in July, but remained low key until schools started back in mid-August after the summer vacations (the Norwegian summer holiday runs approximately from 24 June to 12 August). The strike finished at the end of August, when the employer organisation, The Norwegian Association of Local and Regional Authorities (KS), agreed to compromise.

Other disputes

Negotiations in nearly all major areas, except for education, were concluded without the use of collective action. However, there were strikes in some relatively less important sectors, all related to pay increases. A strike in laundries (some of which serve major hospitals) was ended by compulsory arbitration, as it was judged to threaten life and health.

Commentary

The 2014 negotiations were the first since the specialist tripartite Holden III committee examined Norway’s wage formation model. The committee emphasised the importance of sticking to the trend-setting trades’ model, where negotiations in the export industries are a guideline for other sectors. The model aims to avoid spiralling wages by ensuring that wage growth in this internationally exposed sector is proportional to price increases and productivity growth, and that all other sectors follow suit. One of the main outcomes of this committee was the obligation for LO and NHO to communicate clearly an estimate of the pay increase agreed on in their negotiations, and for other sectors to stick to that. Whether the estimate is correct will not be known until the beginning of 2015, and depends on the result of company negotiations. It is yet to be seen whether the 2014 bargaining round has strengthened or weakened the conclusions of the Holden III committee.

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