Labor Relations in Norway

For many years, Norway has managed to create both economic growth and social equality and consequently has ranked high according to several international measures of economic performance, employment and social equality. This fact has led to an increased interest in the Norwegian social model. Labor relations constitute an important part of this model, characterized by strong employers’ and workers’ organizations, close co-operation between the government, employers’ associations and trade unions, and strong co-determination and participation at the company level.

The Norwegian model of labor relations represents organizational developments over more than a century of collective bargaining and organized interest representation in political arenas. The general characteristics of the model are variants of the Nordic model of labor relations and can be summarized as follows.

• Universal welfare arrangements and a large public sector
• High employment among both men and women
• Small wage differences and a large degree of social mobility
• Centrally coordinated wage formation and local bargaining at the company level
• Close co-operation between the government, employers’ associations and trade

Unions as well as strong co-determination and participation at the company level (Dolvik, 2007)

There are four Main union in Norway.  With members across the economy, the Landsorganisasjonen or LO is by far the largest, although it has fewer members with higher levels of educational qualifications. The unions associated to LO have 880,938 members in total and 620,000 in employment. The next largest grouping is the UNIO with 300,486 members in total.  The UNIO was founded in December 2001, following the breakup in 1997 of the AF confederation, which brought together unions organizing employees with college and university qualifications. Comprised mostly of teachers and nurses, the UNIO also has other significant affiliates. The third largest union confederation is Yrlesprpgamosaskpmees or YS, which has 222,114 members (159,115 in employment). The YS was formed in 1977 as a confederation of unions which had previously been independent and it has members in both the public and private sector. The smallest confederation is the Akademikerne, whose member unions organize professionals with degree-level education. It currently has over 162,562 members.

In addition to the national unions affiliated with the four confederations, there are approximately 20 independent national unions. Most of these are fairly small and specialized, the largest and most important being the Norwegian Society of Engineers and Technologists (NITO) with 71,756 members. (Dolvik J. a., 1998)

At the work-place level, union representatives for each union are elected locally. They engage in union work and represent the member’s the employers. Employers are obliged by a collective (usually basic) agreement to allow union representatives to use work time, paid for by the employer, for union activities. In larger companies and public departments, it is usual for one or more of the elected union representatives of larger unions to work full time on union activities and to be paid by the employer.

The members of each union form a work-place branch within each company or public department. This branch is responsible for local union activity, including both local bargaining and dialogue with management. If there is more than one union affiliated with the same confederation in a company, these usually form a joint committee.

If a company belongs to a group of companies, the unions, especially LO unions, normally establish a body that co-ordinates union work across work-places and union borders, and elects common union representatives.

An important feature of the model is that strength is a main characteristic of both employees’ and employers’ organizations, and relations between them have been built over many decades. Trade union density is above 50%, which is high compared with most continental European countries. The density of employers’ associations in the private sector is approximately 60–65%. In addition, the model includes long traditions of collective agreements and public regulation of industrial conflicts. (Unknown, n.d.)

Labor relations are regulated by a combination of legislation and legally binding collective agreements between trade unions and employers’ associations or single employers. Although a large number of benefits, terms and conditions of employment are covered by legislation, this does not restrict the scope of collective bargaining. A hierarchical, three-tier collective bargaining system has constituted a fundamental element of labor market regulation.

Wages and working conditions are covered by national collective agreements between the national unions and the employers’ associations. These agreements typically cover an industry or sector and may include broader issues of social policy in addition to pay and working conditions.

Norwegian collective bargain agreements have a strictly hierarchical order. The basic agreements define principal goals and lay down principles and procedures, and are included as the first part of sector-level agreements that, together with the company agreements, set out the actual provisions on wages and working conditions. Company agreements, including pay systems, cannot breach provisions in sector-level agreements.  Collective bargaining agreements exist to regulate standard wage rates and working conditions. They define obligations for both employers and employees, and grant rights. Not only are wages determined by the collective bargaining agreements but also collective agreements contain a variety of provisions concerning social issues and benefits for workers in bound firms, such as holidays, sick leave and training. For example, ordinary working hours are 37.5 hours a week as set by collective agreements, while statutory maximum working hours, according to the Working Environment Act, are 40 hours a week.

Collective agreements are activated on the basis of trade unions being in place, and most agreements require at least 10% union membership in a company before a trade union can demand activation. Various bargaining models have been employed during recent decades. The degree of co-ordination within and across sectors varies between bargaining rounds. Bargaining basically alternates between the highest intersectional level and the industry level in the private sector. As the dominant trade union confederation, LO’s General Council decides whether negotiations are conducted centrally or by national branch organizations. This alternation provides the trade unions with flexibility in the choice of the level and form of co-ordination. Over the past two decades, the main renegotiations between LO and NHO have only taken place on the intersectional level on two occasions (2000 and 2008). Intermediate or mid-term bargaining rounds are always centrally coordinated and normally focus on pay. LO and YS unions regularly conduct ballots on the results of a main bargaining round. Ballots are not a legal requirement and are less common among white-collar unions. (EVJU, 2000)