April 2002 saw the conclusion of a new collective agreement in the trend-setting Norwegian engineering industry, which was followed by settlements in a number of other private sector bargaining units. There was, however, a strike in the hotel and restaurant sector and industrial action may also occur in transport if no agreement is reached. The wage settlements have been rather higher than expected, though there has been little progress on trade union demands for the introduction of occupational pensions.
The 2002 collective bargaining round (NO0202104F) commenced on 11 March with industry-level negotiations in the engineering sector between the Federation of Norwegian Manufacturing Industries (Teknologibedriftenes Landsforening, TBL) and the Norwegian United Federation of Trade Unions (Fellesforbundet). The most important issues on the bargaining agenda were wages and the introduction of an agreement-based occupational pension scheme. Following almost a month of negotiations and mediation, a proposal for a new collective agreement was put forward on 9 April.
The bargaining outcomes in the engineering industry (or the manufacturing sector as a whole) play an important role in collective bargaining in Norway, in that the results achieved provide the framework for negotiations and outcomes in the other sectors, including the rest of the private sector (NO0007198F). Normally, only minor deviations from the manufacturing deal will take place in the remaining sectors, at least with regard to the overall economic framework. However, in 2002 a number of trade unions in the public sector in particular have called for significant wage rises that go beyond the increases agreed in the manufacturing industries.
Private sector negotiations
The agreement between Fellesforbundet and TBL provides for a general hourly wage increase of NOK 2.75 from 1 April 2002, which is within an economic framework of a 5% increase (including wage 'carry-over' and estimated wage drift, ie local negotiations that will take place after the central negotiations). It is seen as good result for the employee side, which will beyond doubt serve to increase growth in real wages (NO0202101N). A special wage package was also introduced for employees in offshore engineering and shipbuilding yards, who will receive an additional increase of NOK 6.00 per hour in order to bring their pay up to the level of similar jobs on the mainland. The proposed introduction of an agreement-based occupational pension scheme, a demand made by the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO) for the whole 2002 bargaining round (NO0103125F), was rejected by TBL. In its place, voluntary procedures were introduced relating to how the parties at company level may influence employers to introduce occupational pension schemes. The employers' demand for more flexible working hours, including changes to standard working hours, was not accepted by the union. The parties agreed to negotiate an 'intermediate' settlement in 2003, and company-level negotiations will be carried out as usual. The proposed collective agreement was to be put to a ballot of Fellesforbundet members in the engineering industries on 26 April 2002, with approval considered most likely.
The negotiations in the building and construction industries between the Federation of Norwegian Construction Industries (Byggenæringens Landsforbund, NBL) and Fellesforbundet produced a result similar to that in the engineering industry with regard to general wage increases and occupational pensions. Here, an agreement was also reached to raise minimum wage levels. Fellesforbundet also managed to gain acceptance for its demand for compulsory local negotiations when a company wishes to use hired labour or subcontractors for work falling within the normal operations of the company. This provides that company management must, in advance, enter into negotiations over the need for, and scale of, such activity with shop stewards.
The wholesale and retail trade sector was the first 'low-wage' bargaining area to conclude an agreement in the 2002 round. The negotiations between the Norwegian Union of Employees in Commerce and Offices (Handel og Kontor i Norge, HK) and the Federation of Norwegian Commercial and Service Enterprises (Handel- og servicesektorens Hovedorganisasjon, HSH) produced a general hourly wage increase of NOK 3.00 and a special increase for low-paid workers of NOK 2.00, as well as a skilled worker's increase of NOK 1.00. The occupational pension issue is to be considered at the company level.
The Hotel and Restaurant Workers' Union (Hotell- og Restaurantarbeiderforbundet, HRAF) and the Norwegian Hospitality Association (Reiselivsbedriftenes Landsforening, RBL) had failed to reach a new agreement for the hotel and restaurant sector by mid-April. On 14 April, 434 hotel employees went out on strike. The parties do not see eye to eye in relation to the union's demand for enhanced wage rates during inconvenient working hours (weekend, evening and night work), as well as the issue of special increases for low-paid workers. The strike - the third in the sector since 1996 - was to be extended incrementally.
Another sector that might face a strike is transport, where negotiations came to a halt in April 2002, and the state mediator came in to help the parties to reach a new agreement. The employer side could not accept the demand for a general wage increase of NOK 10.00 per hour put forward by the Norwegian Transport Workers' Union (Norsk Transportarbeiderforbund, NTF). The union has signalled that it will not readily drop the issue of an agreement-based occupational pension scheme. Strike action was due to be taken on 27 April if mediation was unsuccessful.
Commentary
The president of the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO), Finn Bergesen, stated in a press release that the general wage increase awarded in the engineering industry negotiations was unexpectedly high, and that there is not much room for company-level increases if the joint social partner goal of moderate wage growth is to be achieved in 2002. Indeed there may be a significant improvement in wage earners' purchasing power if Statistics Norway's estimate of record-low price growth of 1.5% proves correct, because in addition to significant wage increases that may well exceed 5% when the settlements are over, tax cuts are also being implemented.
Most Norwegian financial institutions, including the Bank of Norway, predicted the overall wage growth for 2002 to be approximately 5%; according to these estimates, private manufacturing industries would contribute to bring the wage growth rate down, while the public sector settlements would bring the rate up. However, following the outcome of manufacturing industry bargaining, it now seems that the final wage growth rate may exceed 5%, because public sector unions are seeking larger wage increases than the private sector. There are fears that this will force the Bank of Norway to raise interest rates.
The issue of occupational pension schemes has been very important for the trade unions in the private sector, and was raised as a priority demand in advance of the 2002 bargaining round. All public sector employees are covered by occupational pensions schemes, supplementing the ordinary state pension, but around 1 million private sector employees do not enjoy the benefits of such a pension scheme. Failure to obtain an agreement-based occupational pension scheme in the 2002 manufacturing industry negotiations was not seen as a defeat by the leader of LO, Gerd-Liv Valla, who argues that the voluntary arrangements achieved provide the first step in the direction of a more just pension system in the private sector. However, other unions in the private sector were less happy with the outcome on pensions and the leader of NTF, Per Østvold, stated that the transport union will not settle for voluntary guidelines and procedures, but wants to see a closer commitment to the establishment of occupational pension schemes.
NHO is greatly opposed to the introduction of such schemes, not least because of the perceived consequences for the more vulnerable industries in the private sector, and may have instructed TBL, as well as the other employers' associations, not to make any concessions in this regard. Thus the employers may be willing to accept relatively large wage increases in order to avoid making any concessions on the pensions issue.
The negotiations in the manufacturing sector play an important role in collective bargaining in Norway, in that the results achieved provide the framework for negotiations and outcomes in the other sectors, including the rest of the private sector. However, the fact that bargaining in 2002 is being conducted at industry level means that a range of more branch-related issues are also subject to negotiation, and the conclusion of agreements in the manufacturing industries is not a guarantee against industrial conflict breaking out in individual branches.
The public sector negotiations started in April, and the results of private sector bargaining usually provide the framework for these negotiations as well - indeed the private sector deals may ease negotiations in the public sector. However a number of groups in the public sector have great expectations of wage increases far beyond what is perceived as a responsible economic framework for the public sector wage settlement. Thus the negotiations in the public sector and in the hospitals in the bargaining area covered by the NAVO employers' organisation (NO0203103N) pose a significant challenge to the parties. (Håvard Lismoen, FAFO Institute of Applied Social Sciences)