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Why 22,000 workers in Norway could strike from the end of the week

Should mediation talks fail to reach an agreement on wage rises, Norway’s largest trade union umbrella, LO, has announced that over 22,000 workers can strike from Sunday.

Published: 12 April 2023 13:56 CEST

Pictured is a business meeting.

Pictured is a business meeting.Photo by Gabrielle Henderson on Unsplash

The union group was required to announce how many workers could strike as part of the mediation process.

At the end of last month, talks between the Norwegian Confederation of Trade Unions (LO) and the Confederation of Norwegian Enterprise (NHO) over wages broke down.

Mediation on talks, with assistance from the national mediator, will begin on Friday. If an agreement isn’t reached by Sunday, a strike may begin from 6am.
However, both parties can also agree to extend the mediation deadline to avoid strike action and dedicate more time to finding an agreement.

Ferry services and breweries are among the businesses that could be affected by the first wave of strikes. Meanwhile, another trade union group, YS, has announced it would take out 1,400 members on strike. These withdrawals would mainly concern security staff for shops and businesses.

LO has maintained throughout talks that it was pushing for a real wage increase for its members. 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.

“Norwegian workers have taken responsibility through several challenging years for Norwegian working life, with the pandemic and high price growth. Now we see that many companies are doing very well and profits are high. Our aim is to equalize differences between people and ensure that Norwegian workers get their share of the value creation,” Peggy Hessen Følsvik, leader of LO, said in a press release.

The 22,000 workers that could be taken on strike would represent a first wave. If an agreement isn’t reached, LO can take out up to 180,000 members on strike.

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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 myths and realities of Nordic freedom of movement

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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