No changes proposed to labour disputes legislation

In March 2002, the Norwegian government issued proposals for amendments to the legislation relating to labour disputes. The government proposes only minor modifications and does not recommend any changes to the present legal framework in areas such as bargaining, mediation and ballots over mediation proposals, which have been the subject of substantial debate in recent years.

On 15 March 2002, the government put forward its proposal for amendments to the Act relating to Labour Disputes (Arbeidstvistloven). It contains only minor alterations to the present legal framework, and the more controversial proposals made in 2001 by the 'Stabel committee' (see below) were ignored. The implication is that the government is not proposing significant changes with regard to the current rules on collective bargaining, mediation and ballots over mediation proposal . The proposal is to be considered by parliament (Stortinget) before summer 2002, and is likely to be approved.

Background

The issue of changing the existing regulations concerning labour disputes has been on the agenda for some time. The Stabel committee, established in 1999, was but one of several committees established in the aftermath of the 1998 wage settlement, which, compared with earlier settlements, generated unusually high wage increases (NO9805164F). The committee undertook a general analysis of the operation of the present system with a view to revealing weaknesses and strengths in both the legal framework and in collective bargaining arrangements, and was also asked to propose appropriate measures for improvement if any weaknesses were revealed (NO9906135F).

The committee put forward its proposal in April 2001 (NO0104129F). It endorsed previous deliberations emphasising the 'trend-setting sectors' bargaining model (frontfagsmodellen) - ie a model for wage formation whereby the sectors exposed to international competition determine the level of wage growth in the rest of the economy. As with previous committees, the Stabel committee drew attention to the fact that such a model requires a central coordination of wage formation. A majority of the committee's members were of the opinion that such coordination must take place on a voluntary basis, and that it is not viable to establish a binding economic framework prior to negotiations. The committee also considered the extent to which it is necessary to alter the Act relating to Labour Disputes, which regulates bargaining, mediation and strikes. Two areas were discussed: (a) the rules concerning strikes and the use of compulsory arbitration; and (b) the rules regarding mediation and ballots.

Strike and compulsory arbitration

In the mid-1990s, a Labour Law Commission called for a strengthening of the main confederations' role in the collective bargaining system (NO9706112F). The call was based on a general concern about the level of strikes in Norway, and in particular strikes viewed as protests by smaller bodies against the leading social partner organisations and agreements within a particular bargaining area. One of the proposals from the Labour Law Commission was to introduce restrictions on independent organisations' ability to enter into agreements that are in direct competition with those of the main confederations.

The report was controversial and was not followed up by the government with proposals for change. The Stabel committee, in its report, pointed to the fact that restrictions on the possibility of resorting to industrial conflict would be problematic in the light of Norway's international treaty commitments in this area (NO9812104F). The committee also pointed to the importance of limiting the use of compulsory arbitration to a level appropriate in light of the same international commitments. The committee's majority thus found no reason to propose a strengthening of the main confederations' role in this regard.

Mediation and ballots

The second area considered by the Stabel committee was the rules concerning mediation and ballots over proposals for collective agreements. A majority of the committee's members wanted to grant the state mediator the authority to impose a duty on unions to hold ballots (there is currently no such requirement) in cases where a mediation proposal has been put forward, presuming that the state mediator 'under ordinary circumstances will not impose a duty to hold a ballot against the wishes of a union confederation'. There was a general consensus among all the committee members that the state mediator should be allowed at least to demand ballots to be held in the municipal sector, which has a complex agreement structure.

Another change considered by the committee was 'linkage'– ie the power for the state mediator to consider several ballots on mediation proposals collectively and view the results as one. The state mediator has the authority to impose the principle of linkage, but this has not been done since 1980. A majority of the committee members, including those representing the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO), wanted to keep the regulations concerning linkage unchanged.

A minority opposed both these proposals (ie introducing the mediator's power to impose a ballot and retaining the power to impose linkage), and feared that they may be used against smaller organisations that do not accept a proposal for an agreement supported by the larger organisations. Although there was a majority in favour of both proposals – which are interrelated – it was not made up of the same representatives.

Social partners' responses

Although the most important social partner organisations were represented on the committee, these parties nevertheless subsequently gave their views on the committee's report, as is usual in Norway. This process made it clear that there was no broad and united support for the committee majority's proposal to change the Act relating to Labour Disputes.

A majority of trade unions were opposed to letting the state mediator impose a duty to hold membership ballots over proposed collective agreements, which is regarded as an infringement on the social partners' right freely to bargain. The employers' organisations, on the other hand, supported this proposal. LO, whose representative on the committee supported the proposal, ended up opposing it subsequently. One reason was that the proposal met with significant opposition within LO.

The proposal to maintain the present regulations on linkage of mediation proposals was also criticised by many of the trade unions. However, several unions argue that it is relatively unproblematic to allow the state mediator to impose linkage of ballots when the organisations concerned consent to it.

Government proposal

In its March 2002 proposal to parliament for amendments to the Act relating to Labour Disputes, the government states that changes to the rules concerning bargaining arrangements require broad support from the social partners. The government concludes that there is no such support for the majority proposals put forward by the Stabel committee. Thus the state mediator will not be granted the powers to impose a duty to hold ballots, not even just in the municipal sector, while present regulations concerning linkage of ballots, which have not been invoked in the last 20 years, are to be abolished. In future, the state mediator may link ballots only in those cases where this is consented to by the parties concerned. Further minor alterations to the legal framework have also been proposed.

Commentary

Despite two comprehensive processes of deliberation, the Act relating to Labour Disputes will remain virtually unchanged. Previous discussions regarding the strengthening the role of the main confederations and limiting the number of strikes have been controversial and have not been followed up by concrete measures to change the legal framework (NO9706112F). Not even the employer side's concerns about Norwegian incomes policy not being supported by sufficient coordination have led to changes to the legal framework. Both the government and the social partners seems committed to finding voluntary solutions to these issues, eg through agreement between the partners.

Two factors have been important in relation to the discussion on possible changes to the Act relating to Labour Disputes. First, the inclusion of a much broader range of actors than just LO and the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO) in the cooperative venture on incomes policy in recent years (NO9908145F) has made it more difficult to reach agreement on regulations strengthening the role of the main confederations or to impose greater coordination. Such moves are to a great extent seen as strengthening the role of LO and NHO at the expense of the other actors or sectors, and as such are regarded by the other social partners as an infringement on their bargaining rights. Second, the Stabel committee has stressed the international commitments to which Norway is bound, in areas including the right to strike. Norway has previously been criticised for its use of compulsory arbitration in connection with labour disputes (NO9704109N), and the government has over recent years been more restrictive in its use of compulsory arbitration.

A number of committees have in recent years considered different aspects of the Norwegian bargaining system and incomes policy. The committees have by and large pointed to the fact that the Norwegian economy, and thus the social partners, will benefit most from a wage formation system that contributes to maintaining Norwegian manufacturing industry's competitiveness. This has not prevented wage growth in Norway being significantly higher than among its main trading partners and the level recommended prior to settlements over recent years. Experience indicates that it is difficult to coordinate wage formation in a tight labour market situation and a large public sector. Many commentators believe that Norway's collective bargaining model and incomes policy cooperation are facing substantial challenges. The employer side, led by the NHO, has also signalled that it no longer believes in a model dominated by central negotiations (NO0109102F). Thus a more or less united consensus about leaving the Act relating to Labour Disputes unchanged does not mean that the Norwegian bargaining model will not be subject to debate in the months and years to come. (Kristine Nergaard, FAFO Institute of Applied Social Sciences)