"Important to continue the extension of collective agreements"

Collective agreements are commonplace in the Nordics, but nearly unknown elsewhere. For them to work, both employees and employers must be organised. Researchers in Norway have said that the extension of collective agreements is not a magic solution for a fair labour market.

The extension of collective agreements means some or all of the elements of the agreement will cover everyone working within one sector, whether they are organised or not. One way of achieving agreements for a whole sector is to let trade unions and employers negotiate an agreement – and then extend it. 

It was the Norwegian parliament’s recognition of the EEA agreement in 1992 that brought about the introduction of legislation for the extension of collective agreements. The EEA agreement meant that workers from EU countries no longer needed work permits. Foreign employees working in Norway must be treated like Norwegian employees in most areas. The law on extensions of collective agreements aims to secure equal conditions for foreign labour, explains the independent analytical group Economics Norway.

It means some parts of a collective agreement becomes compulsory minimum requirements. This was first used in Norway at seven petroleum plants in 2004, yet it was dropped after 2010.

A necessary measure

The Fafo research foundation has studied the importance of extending collective agreements. One report about low-paid workers asks whether union membership will fall if, due to the extension of collective agreements, you no longer need to be organised to receive a collective agreement-based salary. As Europe faces falling union membership numbers, the extension of collective agreements will naturally come up for discussion.

Yet Ann-Solveig Sørensen, trade union secretary at the Norwegian Union of Food, Beverage and Allied Workers (NNN), believes the extension of collective agreements is necessary. Her union members include all those working in Norway’s fish-farming sector.

“NNN demanded the extension of parts of our collective agreement because we could document instances of social dumping in that sector – in particular foreign labour hired for shorter periods. We saw examples of double work contracts with salaries as low as 400 euro a month,” she tells the Nordic Labour Journal.  

Social dumping is real

NNN believes the extension of collective agreements is necessary to avoid social dumping.

“People working for Norwegian employers should enjoy proper pay and working conditions. Companies should have a level playing field. The Norwegian Labour Inspection Authority says most pay wages according to collective agreements, but some still cheat. That is why it is important to continue with the extension of collective agreements – we should not remove something that works,” says Sørensen.     

“So far, elements like minimum pay, apprenticeship certificates and shift allowances are covered by the extension. We must now consider whether this is enough or whether other parts of the agreement should be extended. NNN has so far not taken a position on this,” she says.

It is important to strengthen the watchdogs’ mandate to allow them to supervise companies in order to discover any discrepancies or social dumping.

A board decides

The Labour Inspection Authority says the extension of collective agreements only happens in sectors where it has been proven that foreign workers can be paid less and offered lower working conditions than what is normal.   

The Collective Bargaining Board of Norway can decide that a national collective agreement must apply to all workers within one sector, by adopting regulations for extensions for the relevant sectors. These regulations will state which parts of the collective agreements are extended, for instance the rule for minimum pay.