In March 2008, the committee on freedom of association of the International Labour Organization considered a complaint by the Finance Sector Union against the Norwegian government for imposing compulsory arbitration to halt an industrial conflict in the financial services sector in 2006. The committee’s verdict was in favour of the complainant, stating that the nature and scale of the dispute did not justify the government’s use of compulsory arbitration.
In March 2008, the committee on freedom of association of the International Labour Organization (ILO) considered a complaint put forward by the Finance Sector Union of Norway (Finansforbundet) against the Norwegian government. The complaint related to the government’s decision to impose compulsory arbitration procedures to halt an industrial dispute between legitimate social partner organisations during the 2006 collective bargaining round in the financial services sector – Case No. 2545 (1.84Mb PDF).
Events leading to government intervention
In the case in question, the Finance Sector Union took strike action against the Norwegian Financial Services Association (Finansnæringens Hovedorganisasjon, FNH) on 1 June 2006. The main reason for the strike was the employer side’s refusal to accept the trade union’s bargaining demand for incorporating into the collective agreement the possibility to negotiate changes to existing occupational pension schemes for employees in the financial services sector (NO0606049I, NO0608029I). The employers responded by calling a full-scale lockout in all banks and insurance companies, which would have resulted in a complete shutdown of all banking and insurance services throughout Norway.
Efforts were made to resolve the dispute outside the ordinary bargaining system. As a result of the failed mediation procedure, the social partners were summoned on 7 June 2006 to a meeting with the Minister of Labour and Social Inclusion, Bjarne Håkon Hanssen. During the meeting, the minister encouraged the social partner organisations to find a solution by emphasising the possible severe consequences of an escalation of the conflict. On 11 June, Minister Hanssen informed the parties to the dispute of the government’s intention to end the conflict by means of compulsory arbitration (Ot.prp. nr. 93 (2005–2006) (in Norwegian, 151Kb PDF)).
Trade union complaint to ILO
The Finance Sector Union submitted its communication to the ILO committee on freedom of association on 6 February 2007, putting forward the following allegations.
- The government unjustifiably intervened in the conflict between the Finance Sector Union and FNH by referring the dispute to be settled by the National Wages Board (Rikslønnsnemnda) through a process of compulsory arbitration on 16 June 2006.
- The government’s first intervention on 9 June 2006, when Minister Hanssen summoned the parties to the dispute to a meeting, calling on the parties to resolve the dispute, was also an infringement of the parties right to strike. The trade union argued that this move violated Article 3 of ILO Convention No. 87 concerning freedom of association and protection of the right to organise and Article 2 of Convention No. 98 concerning the application of the principles of the right to organise and to bargain collectively.
Reasons for government intervention
The government based its decision to intervene on several reports outlining the effects of a total lockout, from bodies such as the Financial Supervisory Authority of Norway (Kredittilsynet), the Central Bank of Norway (Norges Bank) and the Norwegian Labour and Welfare Administration (Arbeids- og velferdsforvaltningen, NAV). In light of these reports, the government took one basic line of argument: given the growing dependency of the Norwegian society on electronic means of payment, both in relation to ordinary trade and commerce but also with regard to the payment and distribution of social welfare and pension benefits, electronic payment systems and financial services constitute a critical national infrastructure. Hence, the maintenance of this infrastructure is imperative for the Norwegian society. Therefore, the government decided to intervene on the basis of the apparent threat of the dispute to vital societal interests and the well-being of the population.
ILO verdict
The ILO committee’s verdict came out in favour of the complainant, stating that the nature and scale of the dispute did not justify use of compulsory arbitration by the government. The committee argued that insurance and banking services do not constitute a vital sector of the economy, the interruption of which would endanger the life, personal safety and health of the whole or part of the population. In this case, the strike action initiated in the insurance sector could not justify government intervention. The later proposed escalation of the conflict into the banking sector, and the subsequent lockout warning from the employer side, may have had irreversible adverse effects, according to the ILO committee. However, this would still not justify the government’s intervention. In this case, the committee believed that the government had the opportunity to put pressure on the parties to the dispute to take advantage of the opportunity in the basic agreement to negotiate dispensations to the strike or a level of minimum service during the strike.
In relation to the Finance Sector Union’s allegation that the interference in the dispute at an early stage by Minister Hanssen was an infringement on the parties right to strike, the committee finds that ‘urging the social partners (…) to find a mutually acceptable solution to the conflict is not contrary to Conventions No. 87 and No. 98’.
Commentary
The committee’s verdict will not have any practical consequences for the 2006 collective agreement in the financial services sector. However, an article (in Norwegian) published by the Finance Sector Union reveals the trade union’s satisfaction with the verdict. The trade union believes that the verdict will be important both for future wage negotiations in the financial services sector, as well as for other trade unions in Norway.
Håvard Lismoen, Fafo Institute for Applied Social Science