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The year 2005 was marked by election campaign and the change of government that took place in the autumn general election. The centre-right coalition government was replaced by a coalition consisting of two parties to the left on the political continuum, the Norwegian Labour Party (Det norske Arbeiderparti, DnA) and the Socialist left Party (Sosialistisk Venstre parti, SV), and the centrist party, the Centre party (Senterpartiet, SP). Mr. Jens Stoltenberg of the DnA leads the new government. It is the first time for more than 20 years that the government command a majority in Norwegian parliament (Stortinget). The new government among other things sets out to strengthen public services in relation to education, health and social care. It also pledged in its platform to halt a number of controversial legal amendments made by the previous government regarding employment protection and overtime (NO0510103F).
The 2005 collective bargaining round in Norway was an intermediate settlement, which normally only involves adjustments to wage rates agreed in the previous year’s main settlement.
In the largest bargaining area in the private sector, that between the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO) and the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO), a general increase of NOK 1 per hours was awarded, in addition to a low-wage increase of NOK 1 for employees subject to agreements with an average wage below NOK 260,000 per year (and where company level bargaining does not take place). Similar increases were given in other parts of the private sector. The majority of private sector employees have company level bargaining in addition to the central level negotiations.
The negotiations in the state sector were concluded on 29 April 2005 with the agreement between the State and the state sector cartels LO Stat, YS Stat, and the Confederation of Higher Education Unions (Utdanningsgruppenes Hovedorganisasjon, UHO). Here the wage of all employees was raised by one level on the wage scale, or a minimum of NOK 4000 per year. The negotiation between the state and the Federation of Norwegian Professional Associations (Akademikerne) was subject to mediation, and the result resembled to a large degree the result in the other negotiations. In the municipal sector all organisations agreed on a general increase of NOK 2000. In the NAVO-sector the majority of employees in state owned hospitals were given an increase more or less at the same level as state employees, whereas other parts of the NAVO-sector saw a result comparable with the private sector.
Normally funds are set aside for company level bargaining within the public sector. However, in 2005 public sector wage increases were given as a general central level increase.
In the National Budget for 2006 average wage growth is estimated to 3 1/4 percent for 2005 compared to 3,5 percent in 2004. National Budget. According to the National Budget the 2005 real wage increase is estimated to 1¾ percent.
No significant developments in collective bargaining on this issue in 2005 (See also legislative developments).
No significant developments in collective bargaining on this issue in 2005 (See also legislative developments)
Equal pay was on the agenda of the 2005 collective bargaining round in the most important agreement areas, in that priority was given to low-wage increases.
No significant developments in collective bargaining on this issue in 2005
In the private, municipal sectors, as well as in the NAVO agreement areas, the social partners agreed to establish committees to look into issues relating to the internationalisation of working life and the issue of social dumping.
In relation to legislation, the year 2005 was very much characterised by discussions surrounding the revision of work environment legislation and the centre-right government’s proposed reform to this end (NO0210103F, NO0310103F, NO0312101N and NO0403102F). In June the Norwegian parliament voted in favour of a number of amendments to the Act relating to Worker Protection and the Working Environment (Arbeidsmiljøloven, AML), which would have taken effect on 1 January 2006 (NO0506102F).A number of smaller and more substantial changes in the regulations were implemented. Among the more controversial issues were the proposed changes to working time regulations and easing of the right to employ temporary workers. Both these changes were reversed by the proposal put forward by the incoming left government in November 2005 (NO0512103N). The Act relating to Civil Servants was also subject to substantial revision in the summer of 2005 (NO0506102F), but also in this case the changes made reverted back to its original form with the new government.
The government committed itself to presenting a legislative proposal making such a scheme compulsory in all companies in connection with the 2004 income settlement (no0404101n). An Act relating to mandatory occupational pensions was adopted by the parliament in June 2006 and entered into force on 1 January 2006. The new Act makes it obligatory for employers to introduce such schemes, and the deadline for introducing such schemes is 31 December 2006. Companies may choose between defined-contribution schemes and defined-benefit schemes, and the employer's contribution must be at least two per cent of the employees' earnings up to a certain amount (NOK 728 000).
In 2005 several decisions on extension of parts of the collective agreements were taken by the so-called Tariff-Board. Extension of agreements may take place only in situations where foreign companies pay lower wages than is common in Norway, and the procedure was employed for the first time in 2004. In 2005 minimum wage standards and other provisions of the collective agreement in the construction sector were extended to cover all employees in the Oslo-fjord area and in the county of Hordaland. In September 2005 the Ministry of Labour and Social Affairs presented an evaluation of the Act, proposing a small number of changes to the legal framework (NO0509103F). It is now subject to consideration by the relevant organisations.
In July a formal decision was made to reorganise the Confederation of Higher Education Unions (Utdanningsgruppenes Hovedorganisasjon, UHO), with the view to accommodate the entry of two new union organisations; the Norwegian Association of Research Workers (Forskerforbundet) and the Norwegian Association of Clergy (Den norske kirkes presteforening) on 1 January 2006 (NO0510101N). Both unions decided to leave Akademikerne and join UHO - the decision was among others based on disagreeing views on the wage policy. The reorganised confederation is called the Confederation of Unions for Professionals s (UNIO), and is the second largest employee confederation in Norway.
Following more than a year of talks and deliberations, the planned merger of several transport- and service sectors unions adjourned on 3 May 2005 (NO0505102N). The planned merger between the Norwegian Union of Graphical Workers (NGF) and the Norwegian United Federation of Trade Unions (Fellesforbundet) continued in 2005 and NGF is a part of Fellesforbundet from 1 January 2006 (no0501104f).
In November 2005 a decision was made to establish a new employer association, the Federation of Norwegian Industries (no0512102n). The new organisation is the result of a merger between the Federation of Norwegian Manufacturing Industries (Teknologibedriftenes landsforening, TBL) and the Federation of Norwegian Process Industries (Prosessindustriens Landsforening, PIL), both affiliated to the Norwegian Business and industry (Næringslivets Hovedorganisasjon, NHO). The new employer association is the largest of NHO’s national associations covering approximately 110,000 employees in more than 2,000 companies in a range of traditional industries.
Intermediate settlements seldom produce industrial action and there were no industrial conflict in connection with the 2005 renegotiations. In January 2005 the five-month industrial conflict involving Norwegian elevator constructors was halted by compulsory arbitration (NO0502102N).
On the 1 April the European Company Statute was implemented in Norway through the establishment of the Act relating to European companies (Lov om europeiske selskaper) and related administrative provisions on the co-determination of employees (Forskrift om arbeidernes innflytelse i SE). The administrative procedures provide employees with the right to information, consultation and representation in European-wide companies. In connection with the proposed revision of work environment legislation (mentioned above), the 2002 EU information and consultation Directive (2002/14/EC) was incorporated as an independent section in to the revised AML. Since information and consultation rights are already regulated through collective agreements in many parts of the Norwegian labour market (NO0309102T), the new regulations will mainly be relevant where no collective agreements exist. The changes took effect on 1 January 2006.
The debate on labour migration, and social dumping, has gained momentum in Norwegian working life in wake of EU enlargement on 1 May 2004. Initially public debate was centred on how to deal with individual labour migration from the new members states. In May 2004, new rules came into force ensuring a partial continuation of national restrictions on the entry of foreign workers from the new EU Member States (NO0405105F). Working permits presupposes wage- and working conditions set at standard levels of the industry concerned. The restrictions will run until May 2006, and the extent to which they will be lifted is still subject to consideration. The debate has increasingly centred on how to regulate cross border services; both though temporary work agencies as well as contractors bringing their own employees (no0506101n).
There are not sufficient statistics on labour migration, but available statistics indicate a substantial increase both in individual immigration as well as an increasing number of service providers from the new EU member states entering the Norwegian labour market (no0506101n). To meet the threat of so-called social dumping in the case of service providers extension mechanisms have been invoked in Norwegian working life. In May 2005 the so-called Tariff board (Tariffnemnda) made public a proposal for the (geographical) extension of two nationwide collective agreements to the region of Oslo and adjacent counties, meaning that employees within the construction sector should be paid according to the minimum wage level in the relevant collective agreement.
In connection with the revised national budget for 2005, the Norwegian government made public its intention to strengthen monitoring and control mechanisms in Norwegian working life with the view to combat social dumping. To this end increased funds have been allocated to the Norwegian Inspection Authority (Arbeidstilsynet) and the Petroleum Safety Authority (Petroleumstilsynet), both of which is responsible for monitoring compliance with the Act relating to the general extension of collective agreements as well as work environment legislation in general. The incoming left government pledged in its joint political platform to strengthen efforts against social dumping, and a proposal for change is now subject to a hearing among the relevant organisations.
There were continued efforts in 2005 to reduce sickness absence and disability pensions and to encourage labour market participation among older employees through the so-called Agreement for Inclusive Working life (IA-avtalen). Sickness absence has also been reduced substantially in 2005. In December 2005 the social partner organisations and the national authorities signed a new agreement for an inclusive working life (NO0601101N). The new agreement runs from 1 January 2006 to 31 December 2009. As such the efforts to reduce sickness absence will continue. At the same time greater efforts will be made to make older people stay longer in employment, and improve the labour market situation of immigrants and other vulnerable groups.
In relation to the revision of work environment legislation in Norway several issues concerning new forms of work were touched upon. After long deliberation and debate, the Parliament passed legislation that would have made it easier for employers to utilise temporary employment and employees from temporary work agencies. However, when the new government took office in October 2005 many of the originally altered provision were reversed back to their original state (no0510103f). Legislation aimed to give part-time employees easier access to full-time jobs has come into force in the new work environment legislation.
Both the part-time rate and the percentage of employees on temporary contracts have been stable over the last years. In Norway 27 percent of all employed persons work part-time whereas 10-11 percent are employed on fixed term contracts. Temporary agency work seems to have increased over the last year or so - following a period of stagnation in 2002 and 2003. One reason is that Norwegian economy is catching up - implicating that companies to a larger degree use agency workers, another reason is that new types of agency work have been emerging gradually, for instance within the health sector and within construction.
Pensions have been a topic on the agenda in 2005 as in the previous years. In May a resolution setting out the main principles on which a new national pensions system is to be built was approved by the Norwegian parliament. The resolution was based on a broad compromise between the centre-right coalition government and key opposition parties. There will be a closer correlation between actual pension payments and career-long employment (NO0507102F), the aim both to reduce future costs as well as encouraging long employment careers. A universal right to an occupational pension was introduced on 1 January 2006 (see legislative development above). The arrangement securing employees a right to early retirement (AFP) has also been debated. However - both the pensions compromise as well as the change of Government - seem to indicate that the AFP will be continued for the time being.
The political and economic climate in Norway is relatively stable, and the outlook for the coming years is favourable with continued high oil prices, high employment, and low unemployment rates. Many of the issues subject to debate in 2005 (and in the 2004 collective bargaining round) will most probably recur in 2006, considering that the settlement is a main settlement whereby all the main collective agreements are up for revision. This is most probably the case in relation to pension, but also in relation to the prevention of social dumping. Some issues however - such as temporary employment and the future of the early retirement scheme - are not so relevant any longer due to the change of government.
The 2006 wage negotiations will take place in a situation with economic growth and decreasing unemployment rate. A challenge for the social partners is therefore to keep wage increases within an economic framework that will not harm the manufacturing sector and export industries. In the State sector Akademikerne is expected to again raise the issue of having their agreements disconnected from the other state sector agreements. In addition the working time agreements for teachers are up for negotiations, an issue that is expected to be difficult to resolve.
The relatively broad consensus that exists in parliament about the shape of a new national pension scheme and compulsory occupational pensions implies that the basic characteristics of the future pensions system have now been established. However - occupational pension schemes will most probably be on the agenda, partly as a result of companies introducing or changing their systems as a result of the new legislation, partly as a result of trade unions attempting to protect existing schemes against changes or corrosion (NO0505104F).
The issue of extending collective agreements will also most probably be placed on the agenda in the coming year, as it has been in the last previous 2 years. There are reasons to believe that more petitions for the extension of collective agreement may come in the near future, not least in light of the recent changes proposed to make procedures for extending agreements more efficient. Moreover, statistics show that labour immigration to Norway from the new Member States has increased threefold in the course of the past year, mostly workers in the building and construction sector. Thus, calls from the trade unions for improvements to monitoring mechanisms are likely to arise also in 2006.