Norway launches initiative against work-related crime during EU summit

Norway is not an EU member, but part of the European Economic Area, the EEA. With a few exceptions, for instance processed agricultural goods and fisheries, Norway subscribes to the four freedoms too. With a strong economy, it is also one of the countries that welcome the most labour immigrants, with Poles, Lithuanians and Swedes making up the largest groups.

Erna Solberg was the first speaker during one of the three separate conferences during the summit, and explained how she had sent a letter to EU Commission President Jean-Claude Juncker proposing concrete cooperation. Norway pays the equivalent of an EU membership fee in order to access the common market, but retains a greater level of control over this money. The offer therefore comes with the possibility of financing.

“The social pillar says that the laws and regulations of the country you are in must be followed. We now have so much mobility in the labour market that we need a system which makes sure this does happen,” Erna Solberg told the Nordic Labour Journal.

A priority issue

Work-related crime, or social dumping as it is known in Norway, has been a priority issue for her government in the past four years.

Work-related crime often involves breaking a range of different laws. It could be ID crime, fake wage payments, tax avoidance and trafficking. To fight this, Norway has established seven operative units across the country where police, tax authorities and NAV, the authority responsible for social security, work closely together and can share information. The cooperation has had good results, and it is needed because work-related crime is also becoming more organised.

One issue which has been exposed is the fact that foreign companies offering labour in Norway sometimes demand from employees that they pay back some of their wages or work for free when they return to their home country. Norwegian companies can cheat too, by only paying what the collective agreement says on paper, but not in the real world. New payment systems make it more difficult to track the money.

When authorities begin to investigate, the company files for bankruptcy and activities are moved to another company, often in a different country. That is why international cooperation is also needed.

“What common interest does the country of origin have to prioritise a question like this?

“I understand that there are countries that have different and bigger problems than making sure workers who have been paid well in Norway get what is rightfully theirs. But it is an important question for the balance of the entire free labour market.

“Freedom of movement does not mean that serious companies should lose out to companies that cheat and break existing laws and regulations,” says Erna Solberg.

One dilemma for several Nordic countries is the fact that the social partners oppose the introduction of minimum wages as part of the fight against unfair competition. The President of the Norwegian Confederation of Trade Unions (LO), Hans-Christian Gabrielsen, also participated at the EU summit.

“We absolutely do not want minimum wages,” he says.

In their place, Norway has introduced so-called universally applicable collective agreements. This means that if one part of the labour market is under great pressure from hired labour, a court of law could demand the collective agreement for a certain business is applicable for all businesses in this area.

“This was introduced as Norway joined the EEA, but it wasn’t used until 2004,” says Hans-Christian Gabrielsen.

He says there is increasing interest from several European countries for the model, including the UK.

Flexible system

Prime Minister Erna Solberg also supports the Norwegian model.

“I believe the legislation on universally applicable collective agreements works well for us who are members of the common market, but not in the EU. Other countries must of course decide for themselves whether they want it. But the Norwegian legislation is a flexible solution. We need to be able to enter into areas that are under pressure, like the construction sector in the Oslo region right now.

“At the same time many other parts of Norway do not need this kind of protection. Because with regulation you also get controls, paperwork and more bureaucracy. What you need is a flexible system,” she says.