Norwegian collective bargaining delivers results

The Norwegian labour market model is working. Tough negotiations between the Norwegian Confederation of Trade Unions (LO) and the Confederation of Norwegian Enterprise (NHO) have culminated in a new two-year collective agreement covering the 300,000 or so workers in the entire private sector in Norway and avoiding strike action.

The deal brings higher wages and a better collective early retirement scheme (AFP). LO’s bargaining committee unanimously recommended a yes vote in a ballot of members on 26 April.

The agreement closes some gaps in the current AFP scheme. At present, many workers lose coverage because they fall sick or are made redundant towards the end of their working lives. They will now be entitled to early retirement. Furthermore, a new scheme being phased in to close all gaps means that more than twice as many workers will be entitled to early AFP retirement. This will be particularly beneficial to young workers, providing those who qualify with more financial security for the future.

LO has secured better conditions for workers doing heavy manual jobs and who are unable to remain active for health or other reasons. The benefit for workers retiring at 62, 63 or 64 years of age with no other earned income comes into effect on 1 January 2019 and will eventually amount to €2,500 extra per year until age 80.

All workers get a general increase of €0.1 per hour as of 1 April 2018, with €0.26 per hour for workers covered by collective agreements and receiving less than 90% of the average industrial wage (€48,250). This means the biggest increases will be for low-wage earners, many of whom are women. Women make up 23% of workers affected by the wage settlement, but half of those entitled to the low-wage supplement under industry-wide agreements. In all, one in five workers are covered by agreements that qualify them for the low-wage supplement.

 An important victory in the fight against abusive employers relates to travel board and lodging costs. The exception to the clause in the industrial collective agreement stating that people “housed at the place of work” are not entitled to travel, board and lodging expenses has promoted the setting up of so-called ‘letterbox companies’ and led to social dumping all over Norway. This is now being cleared up. The collective agreement is more detailed on the requirements for calling an establishment a company and on the relationship between the company and its workers.