After four days of an unprecedented strike, given it took place during Norway’s interim wage settlement negotiations – the employer and employee representatives were able to reach an agreement on Thursday afternoon.

This year’s wage settlement negotiations were interim settlement talks, where only the salary was negotiated.

The employee side was represented by the Norwegian Confederation of Trade Unions (LO) and the Confederation of Vocational Unions (YS), while the employer side’s interests were looked after by the Confederation of Norwegian Enterprise (NHO).

So, will this deal benefit you? If you’re a member of any of the two big union families in the private sector (LO or YS), the short answer is – yes.

The deal

In Thursday’s agreement, the two sides agreed on a framework of 5.2 percent wage growth, with a larger proportion of the increase included in general supplements.

As the NHO explains on its webpage, a general supplement refers to a salary supplement for everyone within the collective agreement, either in the form of a percentage increase in wage rates or as a krone supplement.

So, generally speaking, what does this mean for LO and YS members in terms of wage growth in kroner?

All LO and YS members got 7.5 kroner an hour (i.e. 14,625 kroner per year), the low-paid got 11.5 or 10.5 kroner an hour, depending on whether they have local bargaining rights or not (the low wage supplement of 3 kroner per hour would mean 5,850 kroner a year for collective agreements with below 90 percent of the average industrial worker’s wage, while the low wage supplement for collective agreements without local bargaining rights, amounting to an additional 4 kroner per hour, would translate into 7,800 kroner a year).

Furthermore, an additional 1 kroner per hour was negotiated for the bus industry by YS.

As a reference point, an average industrial worker’s salary in Norway amounted to 544,700 kroner last year.

You can find more information on the details of the deal on the web pages of LO and YS.

Who is affected?

The settlement covers the broad union families of LO and YS. LO has gone out and said that around 185,000 union members in LO/NHO companies would be affected.

On the employer side, 33,000 companies were represented by the NHO.

Among others, unionised workers in the following segments of the private sector will be affected: industry, food and drink production, retail stores, hotels and restaurants, ski resorts, transport, veterinarians, bakers, printing, and others.

Workers with low-wage supplements got the most out of the wage settlement, according to the Fafo Research Foundation researcher Kristine Nergaard.

In the agreement between LO and NHO, the low wage supplement was increased by 3 kroner an hour. For those without local bargaining rights, it was increased by 4 kroner an hour.

“With the new low-wage supplement and the general supplement, those who receive the low-wage supplement, in industries where the average wage is low, came out on top,” Nergaard told the newspaper E24.

The other group singled out as profiting from the talks are those who would have needed help gaining traction in local negotiations.

“This is a settlement that aims to improve purchasing power. If you look at the sums, there have never been such high general supplements. It has been a long time since we have seen such high salary increases,” Nergaard said.

How Norway’s collective bargaining system work

The annual wage settlement in Norway is a process that determines new wage levels for the majority of employees, given that well over 50 percent of the workforce is covered by a collective agreement (more than two million people in the country are part of a union).

During the negotiation process, the parties usually discuss various issues, such as wage increases, benefits, and working conditions in Norway.

READ MORE: What is a Norwegian collective bargaining agreement?

However, the 2023 talks are an interim settlement (mellomoppgjør), meaning that the key aspect of the negotiations will be the wage. Every other year, the main settlement (hovedoppgjøret) takes place, in which the entire collective agreement is negotiated.

The negotiations, also known as collective bargaining or wage settlement, are meant to ensure that employees receive their fair share of the profits generated by their employer and that their pay is adjusted to account for the increasing prices of goods and services.

While non-union employees don’t have the same bargaining rights as their unionised counterparts, some employers may still adjust their pay on an annual basis.

Additionally, some industries have a statutory minimum wage level that is typically updated annually after the collective settlement negotiations are concluded, making the collective negotiations even more important.

Prices in Norway are expected to rise by 4.9 percent this year. The demand in this year’s wage settlement talks has been for the employer side to offer a wage increase that surpasses inflation.