New Norwegian IA agreement: More of the same, but fewer conflicting goals

Sick leave remains a great mystery for those making labour market policies. Why does it rise or fall? How do you help people get back into work as quickly as possible? Are changes at work often what is needed to make people well again, or is the problem the fact that people report for work while they are still ill, so-called presenteeism?

Norway sounded the alarm in the late 1990s as sick leave levels rose sharply. Despite its massive oil revenues, the Norwegian state would not have been able to fulfil its pensions obligations if sick leave levels had remained high while many retired early or lived all of their lives outside of the labour market.

A certain resignation had begun to set in. Even if the workplaces had become cleaner an quieter and with improved ergonomics, sick leave levels did not fall.

Other factors proved to be equally important – like stress, psychological ill health or personal conflicts in the workplace.

Presenteeism – a new term

The presenteeism debate arrived after the term was launched by the British psychologist Cary Cooper in the 1990s. It is often defined as going to work despite being so ill that you should have taken sick leave. Presenteeism is meant to be the linguistic opposite of absenteeism.

There was a shared view that new ideas for how to tackle sick leave levels were needed, and that bigger and more cohesive measures were needed. The first IA agreement listed three aims:

1. A 20 % cut in sick leave.
2. Helping more people with various handicaps enter the labour market.
3. Help the over-50 extend their work activity by one year.

Companies signing IA agreements with the Norwegian welfare administration NAV would be given new tools to help them reach these aims. The most controversial of these was to give employees a self-certification right for up to eight days, and for no more than 24 days a year. The presenteeism debate played a role here. The idea was that everyone knows their own health best, and that both doctors’ and companies’ resources should not be wasted on people catching a cold.   

No abuse of the rule

Those who worried about people abusing that right were proven wrong. Only 0.93 % of the 6.2 % who went on sick leave in Norway used self-certification. The rest were signed off by their doctors. The number has never risen above 1.07 %, and it has remained stable. Any variations have mainly been seen in the number of sick leaves approved by doctors.  

The green line is the total sick leave figure, the yellow shows the number approved by doctors and the purple is for self-certification. Source: Statistics Norway 

The aim of the IA agreement was to follow up those who were at risk of long-term sick leave. Sick leave should be something that could be talked about openly with management. Adjustable sick leave was also introduced, allowing people to work for a few days or hours without losing their contract. Working tasks would be individually adapted to help people keep working. Special working life centres in each county council would create the competence needed to make this happen.  

Meanwhile, the conditions regarding sick leave were kept the same – the company would carry the cost for the first 16 days, while the employee would receive 100 % of his or her salary from the first day of sick leave.

As not all companies signed an IA agreement – no more than 26 percent did – it should have been possible to see what worked and what did not.  IA agreements were far more common among public employees. 

Just one aim completely met

Out of the three aims, the final one was met – to extend older people’s work activity – one year before the last period of the old IA agreement. People with physical handicaps saw no major change, and sick leave levels fell by 12.9 % from 2001 – not by 20 % which had been the aim.

Kjetil Frøyland, Tanhja Haraldsdottir Nordberg and Ola Nedregård at OsloMet’s Work Research Institute have performed a study of the most relevant research reports on the IA agreements.They concluded that it is possible to reduce sick leave levels in companies with good leadership and by allowing employees a share in the decision-making process.

Yet there are no studies that look at the IA agreement’s total effect, and there are few Nordic comparisons.

Studies also unveil some conflicting goals within the IA agreement. It can be demanding to follow up of people on sick leave, which means employers might hesitate to hire people with physical handicaps. On the other hand, if they do hire people with physical handicaps, this too could lead to higher sick leave levels.

There is also a conflict in the fact that increased focus on people on sick leave leaves less time to find ways of adapting work to suit older people.

Less comprehensive aims

The new agreement was signed by four trade union confederations on the 18th of December last year and will remain in place out 2022. The problem with conflicting goals has been solved by taking these areas out of the agreement. 

People with physical handicaps will get help instead from a dugnaddelivered by the social partners (dugnad is voluntary, unpaid work typical to Norway, but also a more general word for joint effort).

The new agreement also sets no new goal for getting older people to stay in work for longer. All focus is on sick leave. The new aim is to reduce sick leave levels with 10 % by the end of 2022, compared with the 2018 annual average.

Keeping in mind it took 17 years to achieve a reduction of 12.9 % – some 0.75 percentage points a year – the ambition is now to reduce the level of sick leave by 2.5 percentage points a year.

Everyone will be able to self-certify

The right for employees to self-certify will be extended to cover all Norwegian employers, both private and public, that wish to do so. The agreement says: 

“The IA agreement will cover the entire Norwegian labour market. The workplace is the main arena for IA measures. To succeed, we need to see good cooperation between the social partners. Leaders, workers’ representatives and safety representatives all play an important role.”

The government has also promised not to propose any changes to sick leave rules for employees or employers during the agreement period, if they themselves to not ask for it.