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STRIKES

Is Norway facing the prospect of strikes in April? 

Annual wage talks have broken down between Norway's biggest labour union and employer organisation. If mediation talks fail to bear fruit, strikes could follow.

Published: 3 April 2023 13:09 CEST
Pictured are workers at a meeting.
This is the likelihood of Norway heading on strike later this month. Pictured are workers at a meeting. Photo by Dylan Gillis on Unsplash

Talks between the Norwegian Confederation of Trade Unions (LO) and the Confederation of Norwegian Enterprise (NHO) over the annual wage settlement ended last week without an agreement being struck. 

“It wasn’t possible to make any progress in the negotiations”, Peggy Hessen Følsvik, leader of LO, said of the breakdown. 

 With talks breaking down, the two parties will enter mediation with the state mediator. 

Over the past eight years, wage growth has only been marginally higher than inflation. This year, LO has committed to ensuring workers get a wage rise that outpaces inflation. 

According to a government estimate, inflation is forecast to be 4.9 percent in Norway in 2023. This means LO is after a wage rise in the region of five percent. 

LO has argued that high wage rises for managers and executives and large profit margins for firms mean that businesses can afford the requested increases. 

Meanwhile, employers say that using inflation as a basis for wage negotiations isn’t suitable, as it doesn’t offer an indicator of firms’ profitability for 2023. 

Mediation talks will begin on April 14th, with a deadline of April 15th. The deadline can be extended at the will of both parties. However, LO has said it is willing to call strikes from the 16th. 

How likely is a strike? 

Essentially, a strike is entirely possible if the two parties fail to agree to a deal during mediation. Both parties have held their cards quite close to their chest, so how far apart they are is unclear. 

This year’s negotiations are for an interim settlement. 

The industries and sectors that could strike will be announced before the mediation talks. When the sectors or workers who may strike are revealed, a rough idea of how disruptive the industrial action will begin to form. 

If the proposed strikes threaten mass disruption, then the bargaining position of LO will be stronger in mediation. LO can take out around 185,000 workers on strike if it wishes to do so. 

Should the two parties in Norway be close to an agreement, they may find a solution in mediation or choose to extend the deadline to push through a deal. 

Strikes in Norway are pretty common. Over the past year, workers in the aviation, oil and gas, the private kindergarten sector, and teachers have all gone on strike. 

Furthermore, they tend to strike in waves – meaning that the strike will gradually be ramped up rather than have all the workers taken out at once. 

Norway’s government can choose to end strikes and force two parties to mediation if they feel the industrial actions threaten the health and safety of the general public. Although, it has also ended strikes when the risk to public health isn’t always straightforward. 

Once a strike is broken up by the government, the two parties are forced to a national mediation board. 

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IMMIGRATION

Nordic countries urged to set common working from home rules

The Nordic countries should have common conditions on working from the place of residence, including working from home, to fulfil the objective of an integrated labour market, says a report by the region's Freedom of Movement Council.

Published: 25 September 2023 11:41 CEST
Nordic countries urged to set common working from home rules

The proposal is part of a series of recommendations to simplify tax agreements to facilitate free movement of people and make the region “the most integrated” in the world by 2030, as agreed by Nordic Prime Ministers.

The Freedom of Movement Council argues that the pandemic revealed the flaws in the current system, as a large proportion of cross-border workers had to operate from home, facing taxation in two countries, different tax levels and mounting bureaucracy.

“Now that more companies are open to their employees working from home, the current Nordic tax agreement just isn’t keeping up. I hope this analysis will pave the way for dialogue and that the end result will be simplification and less bureaucracy,” said Karen Ellemann, secretary-general of the Nordic Council of Ministers.

Internationally less known than EU free movement rules, the region has a special agreement on free movement of people that dates back to the 1950s.

Under the Nordic Passport Union, citizens can move within the region without travel documents or residence permits and enjoy more rights than those granted to EU citizens within the European Union. Non-EU residents, however, only partially benefit as they do not have the automatic right to work in another Nordic state.

The Nordic free movement area covers Denmark, Finland, Iceland, Norway, Sweden, the Faroe Islands and Åland. Greenland is not part of the Passport Union but is in practice subject to some of its provisions.

The Nordic governments set up the Freedom of Movement Council as an independent body to identify obstacles to this principle and propose how to remove them.

In an interview with The Local, chair Siv Friðleifsdóttir said the Council has identified over 100 barriers to free movement and prioritised 30. The tax system is one of them.

“The Nordic countries currently have several agreements that regulate cross-border and remote working. Common to all of them is that they’re based on the countries’ need to protect their tax base,” the Council notes.

INTERVIEW:

The report, prepared by consultancies KPMG and Resonans Nordic, points at four problems in particular: rules for domestic work, registration obligations in more than one country for employers, as well as taxation of wages and pensions when working in another Nordic state.

The Council therefore proposes to set common conditions on “permanent establishment” when working in the country of residence, including from home. It also suggests to tax salaries in the country of employment and consider work from home in the country of residence equal to work in the country where the employer is located.

In addition, advance tax should be reported and collected in the employer’s country to avoid having different rules for the same salary.

Pension contributions should be mutually recognised as deductible in another Nordic states and returns taxed only under the legislation of the country where the pension plan is established, the Council argues.

In the Øresund region, between Denmark and Sweden, a fully integrated labour market could generate combined annual socio-economic gains of 2.9 billion Danish kroner, the report estimates.

“Our countries have a lot to gain from having a flexible common labour market. It can solve the problem of skills shortages in one country and the problem of unemployment in another. In other words, a functioning labour market is a strong catalyst for our countries’ economies,” says Siv Friðleifsdóttir, chair of the Freedom of Movement Council.

The full report is currently only available in Danish but translations are expected in the coming weeks.

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