Labour Relations

Foreign companies operating in Norway may find themselves faced with a system of labour relations, collective bargaining and employee involvement that is unfamiliar to them. This may be particularly true for companies based in the UK or the US. Being aware of the principles for labour relations is crucial in order to avoid undesirable situations in your company.

Published 26.09.13

Background
Trade unions and employers organisations have existed - and cooperated - in Norway for more than a hundred years. There is a deeply rooted tradition for employee involvement and information/consultation of workers.

Over the years, legislation, collective agreements and company-based practices have developed, forming a system of comprehensive workers rights and privileges. There is now general consensus among employers on the usefulness of the system.

It should be noted that even if Norway is not an EU member, we belong to the EEA (European Economic Area). This means that all relevant EU directives are implemented here; including for instance the EWC directive and that on information/consultation.

Codetermination: Board representation according to the Joint Stock Companies Act.
Since 1972, employees in Norwegian joint stock companies have been entitled to board representation and to be represented on the corporate assembly. The employee representatives are elected by and among the workforce. They enjoy the same rights and obligations as shareholders’ representatives.

In companies with
• between 30 and 50 employees; the employees may elect one board member and one observer
• between 50 and 200 employees, the employees may elect 1/3, but at least two, of the board members
• more than 200 employees, the company is obliged to establish a Corporate Assembly (CA) with at least twelve members, of whom 1/3 are elected by the employees. Among the tasks of the CA is to elect the board, based on the principle of 1/3 employee representation. The social partners at enterprise level may agree not to establish a CA or to dissolve an existing CA. Certain conditions apply. The legal provisions on employee representation on boards are to be found in the Limited Liability Companies Act (Aksjeloven).

Information/consultation: The Basic Agreement
Norwegian employees enjoy extensive information and consultation rights, most of which are to be found in the Basic Agreements concluded between the social partners. The provisions are binding on the parties to the agreements and alleged violations may be brought before the Labour Court. The Basic Agreement between NHO and the Norwegian Confederation of Trade Unions (LO), entered into for the first time in 1935, is the model for similar agreements with other workers’ organisations. Look here for The Basic Agreement

Some of the most important provisions are:
• The right to organize (§ 2-1) and to elect local shop stewards for various purposes (§§ 5-1 and 5-2)
• The right for workers to be informed and consulted in good faith before management makes decisions; chapter IX. This chapter is obligatory reading for any HR manager, as it provides the basis for the regular interaction between shop stewards and the company. In particular, one should note § 9-3 on discussions concerning the ordinary operations of the enterprise. Matters relating to the financial position of the enterprise, its production and its development; matters immediately related to the workplace and everyday operations as well as general wage and working conditions are relevant in this context. Unless otherwise agreed, discussions shall be held as early as possible and at least once a month, and otherwise whenever requested by shop stewards. §§ 9-4 and 9-5. In groups of companies, § 9-17 will apply. § 9-6 contains particulars related to information/consultation, i. a. the obligation for companies to allow shop stewards to present views before any decision is taken.

• The right to form cooperation bodies at company/group level: Chapters 12 (Works Councils), 13 (Department Councils) and 14 (cooperation in groups of companies) • European Works Councils (EWC): Norway has implemented the provisions of the EU directive on EWCs by way of collective agreement. The text is to be found in supplementary agreement no. 8 to the Basic Agreement