The results of the lengthy strike by pilots at Norwegian Air will have “dramatic consequences” for many Norwegian employees, not just the pilots, claim a professor and an expert in labour law. They say the settlement loosens the ties between employers and employees, in line with an international trend.
“This will be an eye-opener for many Norwegian workers,” Jan Tormod Dege, an attorney specializing in labour law, told Norwegian Broadcasting (NRK). The strike, he said, has affected “many more people than the pilots and passengers of Norwegian Air. It will become an issue for many.”
Employers demand more flexibility
Professor Eli Moen at the Norwegian Business School BI agrees, because the pilots had to accept that they are employed through a subsidiary of the airline, not the parent company Norwegian Air Shuttle (NAS). Moen believes that can mean that use of crewing companies, and employment agencies by other businesses, will increase in several industries in the future.
Moen noted that there’s been “explosive growth” in the use of third-party employment agencies in OECD countries in recent years, and the Norwegian Air settlement can usher in such growth in Norway as well despite the country’s traditionally strong and powerful labour unions.
The pilots’ strike settlement also comes at a time when Norway’s conservative minority government coalition is proposing major changes in work rules. The changes, according to the government, would give employers the increased flexibility needed to invest in new ventures and create new jobs. They wouldn’t be bound by contracts with expensive full-time employees, but the labour unions are fighting the changes.
Effects of globalization
Dege and Moen view the Norwegian Air settlement as a sign that international labour standards and globalization are arriving in Norway as well. NRK reported that fully 25 percent of the labour force in countries that are members of the OECD (Organisation for Economic Cooperation and Development) now work without permanent employment in the form of standard contracts. Most of the remainder have various, looser ties to their employers in the form of short-term contracts, contracts through third-party employment agencies or payment based on hours worked or specific projects. In Portugal, for example, only 6 percent of the workforce is covered by collective bargaining agreements.
Even in Germany, which has a strong labour movement, there’s been a growing trend towards a reduction in collective bargaining agreements directly with the employer, and not just within aviation and shipbuilding. “In Germany, only around a third of those working in the automobile industry are permanently employed,” Moen said.
Dege said the conflict in Norwegian Air forced the pilots to recognize the changes in the labour market, and that they have become too expensive. Other labour unions are bound to be challenged as well, and may need to lower their expectations. Both he and Moen believe more employees in Norway will start to feel the effects of globalization in their household economy.
“Norway’s pay levels must decline in order for us to adapt to the rest of the world,” Dege told NRK. Moen agreed: “That means a major reduction in pay, loss of job security and benefits like sick pay and holiday pay.” That would suggest, though, that Norway’s chronically high costs and prices must also decline to avoid a reduction in the standard of living, and that would involve major economic restructuring, more free market competition and less government subsidy and protection of various industries.