After months of heated debate over record-high executive compensation and an unwillingness to share company profits with workers, Norwegian union leaders have been fighting back. They scored what’s being called “a big victory” on Sunday, after industrial employers finally agreed to “solid” pay raises and a breakthrough in financing for continuing education of workers.
The settlement between the large trade union federation Fellesforbundet and the national organization representing industrial employers, Norsk Industri, came after marathon negotiations that went into 19 hours of overtime during the weekend. They ended with overall raises of 5.2 percent, and more for those with relatively low incomes of less than NOK 450,000 (USD 45,000) a year.
The pay raises are in line with the highest priority of organized labour: to finally ensure a real boost in purchasing power given an agreed-upon inflation estimate of 4.1 percent this year. Raises in recent years have not kept up with the rising cost of living in Norway, and the country has endured a series of lengthy strikes.
“This is a big victory,” claimed Fellesforbundet’s leader Jørn Eggum, after confirming not only the pay raises but also an “historic” agreement to secure workers’ competence during a time of massive workplace change. Members of the unions tied to Fellesforbundet demanded and won funding for training and continuing education at a time of chronic reorganizations, a need to adapt to the so-called “green shift,” ongoing technologic development and efforts to maintain competitiveness.
“Workers will now have a right to paid leave to educate themselves,” Eggum said, “and relevant and good education will be offered.” That will come with help from the government, which has committed to “actively contribute” to reforms of continuing education and training programs. Other trade union federations are likely to request the same.
The settlement is especially important because negotiations between Fellesforbundet and Norsk Industri (the largest group in Norway’s national employers’ organization NHO) set the tone for most other labour negotiations throughout the spring. It also avoided a major strike that would have pulled nearly 30,000 workers off the job this week, and more if negotiations dragged on.
Another large labour federation, Parat, also struck a deal with Norsk Industri later on Sunday night. State mediator Mats Ruland, who had worked around the clock since the middle of last week to reach agreements, thanked the delegations from both sides for what he called “good cooperation” throughout a “difficult” process.
Mette Nord, leader of Norway’s largest federation representing public sector workers at the local level (Fagforbundet), said she now looked forward to the negotiations she’ll lead from next week. “Pay growth of 5.2 percent and a clear plan for low-income workers offer a good foundation for negotiations in the public sector,” said Nord, adding that “those earning the least must get the most.”
Both Eggum and Norsk Industri’s new acting leader, Knut Sunde, looked exhausted at their press confernce Sunday night, with Sunde admitting they were “dead tired.” He’d had to suddenly take on his role after Norsk Industri’s veteran leader Stein Lier-Hansen abruptly resigned last fall, and then landed in serious trouble over how he’d spent millions of the organization’s money leasing prime hunting land and cabins, along with sea planes used to fly him and others in and out. Lier-Hansen, an avid hunter himself, claimed it was all an investment in relation-building, while others noted how he had personally benefited from the leasing deal that was quickly cancelled. Lier-Hansen has since been charged with serious economic fraud and remains under investigation.
The exclusive hunting trips that cost Norsk Industi members more than NOK 18 million over several years were also viewed as a new “weapon” for trade union federations. “They (the employer organizations) will of course have problems with their reputation, when they’ve spent money on such elite activities, at the same time they’ve been tough against workers and the labour movement,” Peggy Simcic Brønn, a professor emeritus specializing in commuication and reputation, told newspaper Aftenposten. “It appears hypocritical.”
The board of Norsk Industri and NHO itself claimed they’d been unaware of Lier-Hansen’s practice of flying business acquaintances, family and friends into Norway’s scenic wilderness, at Norsk Industri’s expense. Lier-Hansen’s former bosses quickly condemned it, but had not revealed it last fall or tied it to their former director’s abrupt resignation. It was business news service E24 who reported on the controversial “elitist” activity a few months later.
Labour union leaders have also been provoked by the huge pay hikes and bonuses granted to top management at Norway’s biggest companies, several of which are state-owned. Oil and energy company Equinor, in which the state owns a 67 percent stake, paid its CEO Anders Opedal NOK 20.7 million last year, while the CEO of industrial firm Aker, Øyvind Eriksen, received total compensation of NOK 34 million and Orkla’s boss was paid NOK 25.4 million.
Executive pay in Norway remains lower than in many other countries including the US and UK, but the gap between workers’ pay and management’s pay has expanded in recent years in line with profits. Most of Norway’s biggest companies have been highly profitable, not least Equinor and Norway’s largest bank DNB, in which the state holds a 34 percent stake. While many Norwegian workers have struggled with high interest rates, high energy rates and high inflation, DNB has earned billions, and its executives have also received record-high compensation, nearly NOK 16 billion for DNB chief Kjerstin Braathen.
“I’d describe the executive pay as perverse,” Steinar Krogstad, deputy leader of Norway’s largest trade union confederation LO, told newspaper Klassekampen last week. “It increases year by year. There’s nothing suggesting where this (executive compensation) will end. There’s a view that it’s the leaders who are behind value creation in the companies. I would say leaders are important in the same manner that all employees of an organization are important.”
Krogstad noted that the so-called “Norwegian model” is based on not having differences between leaders and workers that are “too big, not in pay matters either. If we want to have mutual confidence between leaders and workers, then major pay differences are poison.”
Calls to limit executive pay increases to the same level as workers’ either haven’t been heard, or are offset by large bonuses. There’s been increased media attention on executive pay in Norway, and scandals like the one at industry organization Norsk Industri may also have played a role in this year’s wage settlement.
Some bank economists, meanwhile, quickly expressed fears that the 5.2 percent wage increase (higher than the 4.9 percent that Norway’s central bank had predicted) could delay any reduction in the central bank’s policy rate of 4.5 percent. It’s already been put off until this autumn at the earliest.
NewsinEnglish.no/Nina Berglund
