Norway: Latest working life developments – Q2 2016

Rising unemployment, the biennial renegotiation of nationwide collective agreements and proposed changes to legislation on temporary layoffs, working time and whistle-blowing are the main topics of interest in this article. This country update reports on the latest developments in working life in Norway in the second quarter of 2016.

Main bargaining round results in low wage growth

The main bargaining round in the biennial renegotiation of nationwide collective agreements was conducted at sectoral level, a decision made by the Norwegian Confederation of Trade Unions (LO) after it failed to reach internal agreement among its unions on the issue of pensions.

Most of the nationwide agreements were reached without industrial conflict, with the notable exception of the hotel and restaurant sector where a major strike was called. The negotiations in the central public administration sector were especially difficult; the resulting agreements ended the traditional practice of having identical agreements with the different trade unions in the state administration and increased the importance of local-level bargaining.

As the growth rate in the Norwegian economy was lower than expected, the trade unions showed restraint in the bargaining round and agreed to low wage increases. The overall wage increase during 2015 is estimated at 2.8%, which is significantly lower than in previous years. For 2016, the overall wage increase is expected to be lower than in 2015. The trendsetting industry agreement between LO and the Confederation of Norwegian Enterprises (NHO) is expected to increase wages in the industries covered by a very modest 2.4% in 2016. The agreements reached by other sectors were mainly in line with this economic framework and the end result is likely to be flat real wages.

Changes to temporary layoff rules

The economic slowdown caused by the fall in crude oil prices has led to a wave of redundancies in the petroleum sector. During the renegotiation of the trendsetting manufacturing industries collective agreement, the social partners involved sent a joint letter to Prime Minister Erna Solberg asking for changes to the regulations on temporary layoffs. In order to combat rising unemployment and contribute to an agreement, the government proposed new legislation extending the length of temporary layoffs. The bill, which was passed by Parliament in May and came into force on 1 July, extends the maximum period for temporary layoffs from 30 weeks to 52 weeks.

Proposed changes to working time regulations

The expert committee on working time appointed by the Minister of Labour and Social Affairs, Anniken Hauglie, delivered its report in January 2016. The report concluded that Norwegian working time regulation functioned well in many aspects, but suggested some adjustments to increase flexibility for both employees and employers – mainly in the direction of deregulation. Proposed changes include regulations on shift work, and extending the groups of workers who could be exempted from working time regulations. The report was sent on to a public hearing involving social partners and other stakeholders. The trade unions are critical of both the process and the proposed deregulatory changes as the social partners were not represented in the committee. The employer organisations are generally positive about the more flexible regulations proposed.

Proposed changes to whistle-blowing regulations

The government has also proposed changes to the Working Environment Act to strengthen the protection of whistle-blowers. These proposals are out for public consultation until 1 October. The proposed changes include:

  • requiring all employers with more than 10 employees to have written whistle-blowing procedures;
  • ensuring that these procedures also cover workers not directly employed by the company;
  • giving better guarantees to whistle-blowers in the public sector against having their identities revealed against their will.

The government also plans to set up an expert commission to carry out a more comprehensive review of whistle-blower regulations.

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