In early June 2006, a 10-day strike among employees in the banking and insurance sector over occupational pension schemes came to an end after the government intervened and declared its intentions to halt further conflict by means of compulsory arbitration. A decision on a new agreement now remains to be settled by the National Wages Board.
The 2006 wage settlement resulted in a 10-day strike of employees within the banking and insurance sector at the beginning of June. The Finance Sector Union (Finansforbundet) took strike action because the employers refused to accept trade union input in the development of the sector’s occupational pension scheme. On 11 June 2006, Finansforbundet called an end to the strike. The union’s decision to call off further action came after the government declared its intentions to halt further conflict by means of compulsory arbitration.
Disagreement over pension schemes
On 20 April 2006, Finansforbundet, which is an affiliate member of the Confederation of Vocational Unions (Yrkesorganisasjonenes Sentralforbund, YS), and the Norwegian Employers’ Association for the Financial Sector (Finansnæringens Arbeidsgiverforening, FA) began this year’s bargaining round in the financial services sector. The objective of these negotiations was to renegotiate wages and working conditions of approximately 26,000 employees in the sector.
In particular, Finansforbundet tabled the demand to make existing occupational pension schemes part of the sector’s collective agreement. Most employees in this sector have contribution-based occupational pension schemes, which are not covered by the collective agreement. The employee pension schemes in the financial services sector are considered to be among the most generous of all Norwegian sectors. The union therefore fears that employers are increasingly converting existing schemes into less generously defined contribution schemes.
In addition, Finansforbundet demanded a general wage increase of about 4%, including effects of wage drift (extra payments, such as bonuses or overtime premiums) and wage carry-over from increases in the previous year. The union also called for increased efforts in the area of pay equity.
However, the employers rejected the union’s demand for an agreement-based occupational pension scheme. They argued that it would undermine management privileges as well as their ability to run companies properly. They further argued that a union rarely has the right to bargaining over occupational pension schemes in Norway’s private sector.
Strike action
Following mediation, which failed to bring the social partner organisations closer together, the trade union decided to break off negotiations and called a strike in late May 2006. As a result, some 6,020 members of Finansforbundet from a number of insurance companies went on strike on 1 June 2006, setting in motion the first strike in the financial services sector in Norway for over 30 years. Finansforbundet warned that a further 1,500 employees in the banking sector would join the strike from 12 June, to which the employers responded by issuing notice of a lockout, which would have stopped all types of bank services from the same date.
On 11 June, the government informed the organisations about its intentions to intervene in the conflict by means of compulsory arbitration. Its decision was based on the apparent effect of an escalation of the strike on vital societal interests and economic institutions. The government based its decision on reports from the Financial Supervisory Authority of Norway (Kredittilsynet), the Bank of Norway and social insurance authorities.
Social partners’ views
The trade union criticised the decision of the authorities, calling it a violation of its right to take industrial action by intervening in a legal strike. Most of the criticism, however, has been directed at the employers for provoking the use of compulsory arbitration by calling a lockout of employees in all its member companies. The employers defend their actions on the grounds that it is normal for an employer to meet the threat of selective strikes by imposing a lockout in order to prevent the risk of imbalanced competition.
Commentary
The use of compulsory arbitration is not uncommon in Norway. In this case, government intervention was expected, not least because the employers showed their willingness to paralyse the whole sector by announcing a lockout. Most commentators see this as regular practice in Norwegian working life when substantial societal interests are at risk. A decision on a new agreement is now to be settled by the National Wages Board (Rikslønnsnemnda). A resolution is not expected until after the summer holidays.
The National Wages Board has traditionally been hesitant to accept the introduction of more principal demands into collective agreements through its ruling. This contributes to the disappointment felt by Finansforbundet over the government’s decision to impose compulsory arbitration, rather than having the dispute solved through the normal negotiations between the social partner organisations.
Håvard Lismoen, Fafo Institute for Labour and Social Research