New strike threat rises over pensions

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A new strike threat has suddenly emerged just as this year’s rounds of negotiations are beginning between Norway’s major labour unions and employers’ organizations. No one is expecting much if any pay raises, given the country’s economic uncertainty, but pension demands look set to derail any quick settlements.

In an annual rite of spring in Norway, months of negotiations were launched Tuesday over compensation and conditions at the country’s highly organized and regulated workplaces. The large trade union federation Fellesforbundet, part of Norway’s largest labour confederation LO, was first out this week in presenting its demands to its counterpart Norsk Industri, the employers’ organization representing Norway’s industrial sector. Norsk Industri responded in kind, by handing over its own response that it had virtually nothing to offer.

Pay not the problem
Both sides had already seemed to agree that Norwegian workers can’t expect any real increase in their purchasing power this year. The dive in oil prices has brought a halt to years of economic boom in Norway, with the oil and offshore industries hit especially hard. There’s broad understanding in the labour union camp that it’s more important to hang on to jobs than it is to secure any pay hikes.

The unions, led by Fellesforbundet, are, however, keen to secure better pensions for their members. National pension reform in recent years has forever changed the pensions Norwegians could once count on, that roughly equalled around two-thirds of their salaries upon retirement when public and private pension plans were combined. Now there are no guaranteed amounts, and employers are only obligated to stash away between 2- and 8 percent of employees’ annual pay in pension funds that are left to the employees to manage. Employers’ risks have been dramatically reduced, after pension fund costs skyrocketed in both the private and public sectors.

Now the unions, again led by Fellesforbundet, are demanding some improvements and the right to negotiate pension terms. On Tuesday, Fellesforbundet’s leader Jørn Eggum handed over only a relatively modest pay demand that current purchasing power be maintained but also demands that employers fund pensions from the first kroner earned by new employees (not only after NOK 90,000 has been paid out) and that the unions win the right to negotiate the pension plans themselves.

Immediate rejection
The demands were flatly rejected by Eggum’s counterpart Stein Lier-Hansen at Norsk Industri, part of Norway’s national employers’ organization NHO. The employers refuse to give up their right to determine what kind of pension plans they offer to employees.

The immediate stand-off led to widespread predictions in Norwegian media on Wednesday that the threat of a strike thus hangs over the negotiations, both between Felleforbundet and Norsk Industi and all those that will follow. “That’s because what those two decide will apply to all of us,” wrote Arne Strand, commentator in newspaper Dagsavisen. And if they fail to agree, other unions and employers’ group won’t likely come to terms either.

“We’ll see what he (Lier-Hansen of the employers’ side) has to say when negotiations have gone on for a few weeks, or after they’ve broken down,” Strand wrote. “This will be fodder for the national mediator, and he knows, and Lier-Hansen knows, that Fellesforbundet doesn’t make empty threats if it threatens with a strike to get the pension issue in place.”

A matter of principle
Norway’s already troubled oil industry can ill afford a major conflict, while the employees may feel they don’t have much left to lose. While the two sides generally agree on current economic realities that don’t allow for pay raises, the unions see the pension issue as part of labour principles. Since pensions are viewed as compensation that’s simply postponed, employees represented by their unions think it should be subject to negotiation just like wages and benefits are.

The battle over principles is thus underway. “No one wants a strike this year,” read Aftenposten’s headline on its coverage of the labour talks on Wednesday. “It may occur anyway.”

The two sides now at the bargaining table have until March 31 to come to terms, but the talks are now widely expected to break down even before the Easter holidays, with a move into state mediation and a new deadline to be set in early April. Other union federations start negoatiations with their employer counterparts later this month and the public sector unions negotiate through April. If they go into mediation, the deadline would be set after Norway’s national day on the 17th of May. Any strikes would thus likely be called in April or May, with Aftenposten reporting that the trade and transport sectors are said to be most vulnerable. Berglund