Norway | Worker Participation

Abstract

Population:

4,985,870

Collective Bargaining Coverage:

70%

Proportion of Employees in Unions:

52%

Principal Level of Collective Bargaining:

national and industry

Workplace Representation:

union – “works councils” exist in some companies but their role is to improve competitivenes

Board-level Representation:

yes: state-owned and private companies

Company Board Structure:

monistic

Half Norway’s employees are in unions and this figure has remained stable over the last 10 years, while union membership has increased. Most unions are grouped in four confederations, LO, UNIO, YS and Akademikerne. While UNIO and Akademikerne primarily organise more highly qualified employees, there is membership competition between LO and YS unions.

Figures published by the national statistics office Statistics Norway show that there were almost two million (1,941,068) trade unionists in Norway at the end of 2020.[1] This total includes some non-working students, pensioners and others. However, two-thirds of trade union members are employed, a total of 1,314,640 working trade unionists.

Analysis from the research body Fafo, based on 2019 figures, shows that at point union density (the proportion of employees who were trade union members) was 50%, a figure that had remained almost unchanged over the previous 10 years.[2] This is very similar to the estimate in the OECD-AIAS database, which put union density at 49.2% in 2018.[3] This relatively high level of union density has been achieved and maintained (see below), despite that fact that, unlike Norway’s Nordic neighbours, unemployment benefits are not paid through the unions.

There are four union confederations in Norway, and LO is by far the largest, accounting for around half of all union members. LO has members across the economy, although it has fewer members with higher levels of educational qualifications. The unions affiliated to LO have 970,054 members in total and 615,000 in employment. (For LO, as for the other confederations, the figures are from Statistics Norway and are for December 2020.) The next largest grouping is UNIO with 380,803 members in total and 271,733 in employment. UNIO was founded in December 2001after the breakup of an earlier confederation (AF), when it brought together unions organising employees with college and university qualifications. UNIO’s largest areas of membership are teachers and nurses, although it also has other significant affiliates (see below). The third largest union confederation is YS, which has 228,824 members in total and 152,336 in employment. YS was formed in 1977 as a confederation of unions which had previously been independent. YS has members in both the public and private sectors, and it’ affiliates are often in competition with LO unions. The smallest confederation is the Akademikerne, whose member unions organise professionals with degree-level education. It has 231,000 members in total and 180,000 in employment.

There are also 130,387 members in unions which are not affiliated to any of the confederations, of whom 95,567 are employed. The largest of these non-affiliated unions is NITO, which primarily organises graduate engineers. It has 93,317 members in total and 66,755 in employment.

These figures mean that LO organises 24% of all employees, UNIO 10%, YS and Akademikerne 6% each, and other union organisations 4% (figures from Fafo for 2019).

Each of the confederations is made up of several individual unions, based on industrial and occupational groupings. LO has 25 individual affiliated unions.[4] The largest of these is Fagforbundet, which organises workers in in health and social care and local government and has 396,548 members in total (248,097 in employment). LO’s second largest affiliate, Fellesforbundet, covers workers in manufacturing construction and some services (hotels and catering). It has 164,679 members (118,134 in employment). LO’s other affiliates are significantly smaller. HK, which includes banking, retail, tourism, transport and a range of other service industries as well as non-manual workers in manufacturing, has 77,781 members (54,155 in employment); IE, which primarily organises workers in the oil and chemical industries, has 56,220 members (no figures for number in employment); and the central government union NTL has 53,087 members (32,027 in employment). The remaining 20 LO unions range in size from 31,000 (23,738 in employment) in FO, which organises social workers and others, to unions with fewer than 1,000 members. The authors’ union Forfatterforbundet has 410 members, for example.[5]

Norway’s second largest confederation, UNIO, has 13 affiliated unions.[6] As with LO, two are much larger than the rest. The largest is the education union Utdanningsforbundet, which has 183,184 members (121,507 in employment). Most work in primary and secondary schools, but the union also has a substantial membership among those working in pre-school education. The second largest UNIO union is the nurses’ union NSF with 122,279 members (89,113 in employment). Other medium-sized unions in UNIO are the Forskerforbundet, which organises academic-related staff in universities and research institutions and has 23,780 members (19,573 in employment), the Politiets Fellesforbund, which organises in the police and has 17,416 members (14,381 in employment) and the physiotherapists union, Norsk Fysioterpeutforbund, which has 10,022 members (8,498 in employment).

YS, the third largest confederation, has 13 affiliated unions.[7] The largest is Delta, which has 89,713 members (48,862 in employment) and organises primarily in local government. The next largest is Parat, with 41,157 members (30,436 in employment), which organises across a range of industries both the public and private sectors. It is followed by the finance union Finansforbundet, with 31,551 members (23,516 in employment) and Negotia, with 21,624 members (17,908 in employment), which organises workers in the private sector, primarily administrative and ICT staff.

The fourth largest confederation, Akademikerne, has 13 affiliated unions[8] and, like LO and UNIO, its two largest affiliates make up more than half of its total membership. Akademikerne’s largest affiliate is Tekna, with 86,8668 members (69,000 in employment). Its members are professional employees with an MA or equivalent in science or technology, irrespective of where they work. The second largest Akademikerne union, with 37,375 members (27,744 in employment), is the medical association, Den Norske Lægeforening, which organises doctors. Other significant Akademikerne unions are the association of business economists, Econa with 25,468 members (20,772 in employment) and the lawyers’ association, Norges Juristforbund, with 20,743 members (16,389 in employment).

The LO and the Labour Party (Arbeiderpartiet) in Norway have historically been close since their emergence at the end of the nineteenth century. (The Labour Party was founded in 1887, LO in 1899.) However, the organisational links have weakened over time. Despite this, there is still a strong relationship between the two. The president of LO and the presidents of LO’s two largest affiliates, Fagforbundet and Fellesforbundet, are all members of the Labour Party’s national executive board, and the leaderships of LO and the Labour Party meet every two weeks in a joint cooperation committee (Samarbeidskomiteen).

LO and some of its affiliated unions also support the Labour Party financially at elections, although in recent elections they have also given smaller amounts to other parties.[9]

The close link with the Labour Party is one of the issues that divides LO from the YS confederation, which is in competition with LO for membership and emphasises its political independence. The other confederations, UNIO and Akademikerne, are also politically unaligned.

The number of trade unionists in Norway has grown in recent years. Between 2010 and 2020, the total number of trade unionists increased by 17.0%, rising from 1,658,786 to 1,941,068, and the number of trade unionists in employment grew by 12.7%, from.1,166,145 to 1,314,640.[10] However, not all confederations grew at the same pace, particularly in relation to union members in employment.

Looking at total membership, all groups of unions recorded growth between 2010 and 2020, but while LO grew by 11.3%, YS by 5.2%, and the unions not affiliated to the main confederations by 8.6%, the confederations organising employees with higher academic qualifications experienced higher growth. Membership in UNIO went up by 28.8% between 2010 and 2020, and membership in Akademikerne by 49.7% over the same period.

These trends are seen even more clearly if only union members in employment are considered. UNIO increased its employed membership by 19.6% between 2010 and 2020, while the employed membership of Akademikerne grew by 60.3%. In contrast, the number of employed members in LO grew by only 6.3% between 2010 and 2020, while the employed membership of YS fell slightly (by 3.7%), and the number of members in non-affiliated unions grew by 6.2%.

The strong membership growth in the confederations for more academically qualified employees means that union density remained stable despite an overall increased in the number of employees in Norway, which went up by 10.0% between 2010 and 2020.[11] Figures calculated by Fafo indicate density was 51% in 2010 and then remained unchanged a 50% between 2011 and 2019, while the figures for 2020 (published after the Fafo study) suggest that it increased to 51% in that year.

Rates of union membership are higher in the public sector (79%) than in the private sector (36%), and union density is higher among women (57%) than men (44%), although this largely reflects women’s greater concentration in the public sector.[12]

[1] The figures for total trade union membership and the membership of individual unions come from the statistics published on union members by Statistics Norway and, unless otherwise stated, relate to 31 December 2020 (Trade union members and strikes). See https://www.ssb.no/statistikkbanken/selectvarval/Define.asp?subjectcode=&ProductId=&MainTable=ArbgiverNHO&nvl=&PLanguage=1&nyTmpVar=true&CMSSubjectArea=kultur-og-fritid&KortNavnWeb=arborg&StatVariant=&checked=true

[2] Organisasjonsgrader, tariffavtaledekning og arbeidskonflikter 2018/2019 by Kristine Nergaard, Fafo, 2020, https://www.fafo.no/images/pub/2020/10332.pdf (Accessed 25.05.2021)

[3] OECD and AIAS (2021), Institutional Characteristics of Trade Unions, Wage Setting, State

Intervention and Social Pacts, OECD Publishing, Paris www.oecd.org/employment/ictwss-database.htm (Accessed 25.05.2021)

[4] LO website https://www.lo.no/hvem-vi-er/ (Accessed 25.05.2021)

[5] Forfatterforbundet website https://forfatterforbundet.no/hvem-kan-bli-medlem-i-forfatterforbundet/ (Accessed 25.05.2021)

[6] Unio website https://www.unio.no/om-unio/ (Accessed 25.05.2021)

[7] YS website https://ys.no/om-ys/ (Accessed 25.05.2021)

[8] Akademikerne website https://www.akademikerne.no/ (Accessed 25.05.2021

[9] LO gir 23 millioner kroner til rødgrønn valgkamp, Netavissen, 7 May 2021 https://www.nettavisen.no/nyheter/innenriks/lo-gir-23-millioner-kroner-til-rodgronn-valgkamp/s/12-95-3424124359 (Accessed 21.05.2021)

[10] Own calculation based on Statistics Norway for all the total membership figures and membership in employment from 2016 onwards; the figures for members in employment from 2010 to 2015 are from Fafo (Organisasjonsgrader, tariffavtaledekning og arbeidskonflikter 2018/2019)

[11] The number of employees went up from 2,313,000 in 2010 to 2,544,000 in 2020. Statistics Norway, 09733: Employees, by work hours arrangement, sex, condition of appointment, contents and year.

[12] Organisasjonsgrader, tariffavtaledekning og arbeidskonflikter 2018/2019 by Kristine Nergaard, Fafo, 2020. These figures are for 2018 and are based on administrative data. Labour Force Survey figures for 2017 show an overall higher union density figure of 52% and estimate density at 80% in the public sector and 37% in the private sector.

Agreements reached at national level provide much of the industrial relations framework that in other countries would be provided by legislation. Below this there is a hierarchical structure of annual negotiations at both industry and company/organisation level which set terms and conditions for around 70% of the workforce.

The framework

Collective bargaining in Norway operates within a clearly hierarchical structure. At the top there are the basic agreements (hovedavtalene) between the union confederations and the national employers’ associations which set the framework for bargaining and regulate issues that in many other countries are dealt with through legislation. These include rights to information and consultation, procedures for electing employee representatives, including the choice of European works council representatives, and rules for taking industrial action.

There are separate agreements between the different union confederations and the bodies representing employers but on many issues the agreements have identical wording, other than changes to take account of the specific structures involved. (There are, however, significant differences between the public and private sector agreements in terms of employee representation – see section on Workplace representation.) The most important of these agreements is the agreement between LO, the largest union confederation, and NHO, the largest national employers’ association in the private sector.[1]

At the next level in the hierarchy there are the agreements for specific industries, although these agreements normally include the text of the basic agreements as their first section.

A crucial element of the negotiations is the order in which they are conducted. The annual bargaining round opens with negotiations that cover primarily private sector manufacturing plus construction and some private sector services. The results of these negotiations then set the level of pay increases for the settlements in other parts of private services – finance and retail, the privatised industries, and central and municipal government, which come later.

The aim of this sequence of negotiations, known as the “frontline model” (frontfagsmodellen) is to allow the export-oriented manufacturing industries, which face international competition, to agree pay increases that retain their competitiveness.

The system is supported by regular reports on pay settlements from a joint employer/union/government body, the Technical Calculation Committee for Income Settlements (shortened to TBU in Norwegian). The TBU normally produces two main reports each year, one before and one after the wage settlements. The first report provides an overview of pay and price developments, including a price forecast for the current year and developments in competitiveness. It also analyses developments in the international and Norwegian economy. The second report looks at the results of the settlements negotiated in that year.[2]

Below the industry-level negotiations, there are further negotiations at local level (in companies or local organisations). The extent to which pay and conditions are set by industry-level or local negotiations varies, depending on the industry concerned, the unions and the type of employee.

The TBU distinguishes between three main types of collective agreement.[3] These are:

minimum wage agreements;
normal wage agreements; and
agreements without central wage provisions.

Minimum wage agreements, which are the most frequently found type of agreement in the private sector, particularly for manual workers, set industry-wide minimum rates. However, there is then scope for local negotiations to negotiate top-up payments. These should take account of four specific criteria, company finances, productivity, future prospects and competitiveness, plus, in the Industry Agreement which covers the export-oriented industries, the labour market situation. In some industries, only a few minimum rates are set, covering only the lowest paid. And in these cases, there is a much wider scope for local negotiations. In other industries, minimum rates are set for most points on the scale, leaving less scope for local negotiation. As well as covering much of the private sector, local government workers are also covered by a minimum wage agreement, although here the industry agreement sets out a framework for local top-ups.

Normal agreements set all key terms relating to pay at industry level, leaving no room for locally negotiated additions. This type of agreement covers the employees of central government, local government in the capital, Oslo, as well as the bus industry, electrical engineering and cleaning and security.

Agreements without central wage provision leave all pay negotiations to the local level, with industry agreements only providing an agreed procedural framework within which local agreements, both collective and individual, can set pay and working conditions. The areas where agreements without central wage provision are dominant include those for highly qualified staff in the private sector and the agreements signed by the YS union confederation for non-manual staff in the private sector.

One important aspect relating to local level negotiations is that these are subject to the so-called “peace clause” in the basic agreements, which means that they must be negotiated without recourse to industrial action. The industry level agreement will normally include procedures to attempt to resolve any disputes at company level, but, if the parties disagree, the employer usually has the final say.

In the public sector, the agreements apply to all employees, but, in the private sector, they only apply in companies where there are union members, normally at least 10% of the employees, even if the company itself is part of an employers’ association which is a signatory to the agreement. There are no official figures on the proportion of private sector employees covered by collective bargaining, but depending on the sources used, it has been estimated in two separate Fafo reports to range between 46% and 52% in 2018.[4]

There is also no general mechanism for extending collective agreements across a whole industry in the way that exists in some EU states. However, under the General Application Act (Allmenngjøringsloven) which came into force on 1 January 1994, part or all of a collective agreement can be extended to companies without a collective agreement where “it is documented that foreign employees perform or may perform work on terms that … are less favourable than those that apply” in the collective agreement for that industry. A joint board made up of representatives of the unions and the employers’ association plus independent members hears applications for the extension and makes a ruling.

Initially this provision was hardly used. However, migration into Norway from Central and Eastern Europe since 2004 changed that, and by the start of 2021 nine agreements had been extended in this way, covering large numbers of employees in construction, electrical installation hotels and catering. Overall, these extensions are estimated to add another 240,000 employees to the number covered by collective bargaining, increasing the proportion of private sector employees covered by around 10 percentage points.[5]

The TBU estimates that, with 100% coverage in the public sector, and at coverage in the private sector boosted to 55% because of the impact of the extension of some agreements, overall collective bargaining coverage is around 70%.[6]

Mediation plays an important role in collective bargaining in Norway. Where negotiators fail to reach agreement, the issue must be referred to a mediator, who has the power to delay any industrial action for up to 14 days (21 in the central government.) Mediation will normally lead to further negotiations with the final compromise, if it is reached, being put to a ballot of the membership. The government also has the power to intervene in disputes and impose compulsory arbitration if it feels this is necessary. This power has been invoked most frequently in disputes affecting the public sector and the oil industry, although also in other sectors.

Norway does not have central tripartite body, with representation from unions, employers and government, like the social and economic councils which exist in many European states. However, there is Working Life and Pension Policy Council (Arbeidslivs- og pensjonspolitisk råd) which provides a forum for dialogue between the government, unions and employers, while the tripartite TBU, referred to above, provides technical support for collective bargaining.

One indication of the close cooperation between the government, unions and employers is the series of agreements on Inclusive Working Life (Inkluderende arbeidsliv). These agreements, first signed in 2001 and renewed regularly thereafter, aim to develop and implement policies to reduce sick absence, improve the work environment and ensure that all parts of society have access to rewarding work. There are also tripartite bodies such as the TBU, referred to above,

There is also the Contact Committee (Kontaktutvalget) which brings together unions and employers in the public sector, including the government, to discuss pay and wider issues.

Who negotiates and when?

The top-level basic agreements are negotiated between the union confederations and the national employers’ associations. As already noted, there are separate agreements between the different national employers’ associations and the different union confederations. For example, LO has separate basic agreements with NHO, the main private sector employers’ association, Virke (formerly HSH), the main employers’ association for the private services sector, and Spekter, the employers’ association which primarily represents privatised bodies. The same is true with some variations for the other union confederations, which have their own basic agreements with the employers’ associations. However, this is not the case in the public sector, where basic agreements are negotiated jointly with all the union confederations. The basic agreement for central government is signed by the union confederations, Unio and Akademikerne, and LO Stat and YS Stat, the groupings of unions representing these employees in the confederations LO and YS. Similar arrangements apply to the basic agreement with KS, the municipal employers’ association.

These basic agreements are negotiated every four years.

Industry level agreements are negotiated between individual unions and the confederations on the union side and by the individual employers’ associations for the industries involved and the national employers’ federations on the employers’ side. In the pay review negotiating rounds, which take place every other year (see below), bargaining is almost always centrally coordinated.[7]

Despite this, there continue to be aspects of the agreements which are specific to specific industries and in some cases, such as in finance, the individual unions play a greater role.

The complete agreements are re-negotiated every two years but pay rates are reviewed in the years in between. As a result, there is annual bargaining at industry level, with settlements normally coming into effect at the start of April or May.

Company-level negotiations also take place annually between individual companies and the elected union representatives at company level (see section on Workplace representation).

The subject of the negotiations

As already noted, at the highest level, negotiations in Norway cover a range of issues, such as the procedures for electing employee representatives, which in many other countries would be the subject of legislation. The basic agreements signed at this level also cover, gender equality, health and safety, the use of new technology, work monitoring and job evaluation.

At industry level the agreements lay down a wide range of detailed arrangements on topics such as pay and pay systems, holidays, working hours, travel expenses, health and safety, special leave – such as bereavement leave, and equality issues. They also deal with early retirement arrangements.

Company-level negotiations are intended to adapt the industry-level negotiations to the situation of the company. Their key concern is pay and the specifics of the company.

Norway does not have a national minimum wage.

[1] LO website https://www.lo.no/hva-vi-gjor/hovedavtalen/ NHO website http://tariffavtaler.nho.no/?page=list&&sort=navn (Accessed 25.05.2021)

[2] Rapporter fra det tekniske beregningsutvalget for inntektsoppgjørene (TBU) https://www.regjeringen.no/no/tema/arbeidsliv/lonn-og-inntekt/innsikt/inntektspolitikk-og-lonnsoppgjor/det-tekniske-beregningsutvalget-for-inntektsoppgjorene-tbu/rapporter-fra-det-tekniske-beregningsutvalget-for/id450757/ (Accessed 25.05.2021)

[3] Grunnlaget for inntektsoppgjørene 2021 Institusjonelle trekk ved lønnsdannelsen i Norge, NOU 2021:5 https://www.regjeringen.no/contentassets/34ab14e508fa4c3898f37d3118cae363/no/pdfs/nou202120210005000dddpdfs.pdf (Accessed 25.05.2021)

[4] Arbeidsgiverorganisering og tariffavtaler by Kristin Alsos, Kristine Nergaard and Elin Svarstad, Fafo 2021 https://www.fafo.no/images/pub/2021/20775.pdf uses figures from a collective agreed pension fund from the private sector and estimates coverage at 46%, while Organisasjonsgrader, tariffavtaledekning og arbeidskonflikter 2018/2019 by Kristine Nergaard, Fafo, 2020, https://www.fafo.no/images/pub/2020/10332.pdf uses information from employers’ organisations and estimates coverage at 52% (Accessed 25.05.2021)

[5] Arbeidsgiverorganisering og tariffavtaler by Kristin Alsos, Kristine Nergaard and Elin Svarstad, Fafo 2021

[6] Grunnlaget for inntektsoppgjørene 2021 Institusjonelle trekk ved lønnsdannelsen i Norge, NOU 2021:5

[7] See Labour Relations in Norway, Espen Løken and Torgeir Aarvaag Stokke, Fafo-report 2009:33 (http://www.fafo.no/pub/rapp/20123/20123.pdf)

Union representatives provide the most important element of workplace representation in Norway and play the main role in information and consultation, employee representation and local negotiations.

The arrangements for workplace representation in Norway flow primarily from the basic agreements (hovedavtalene) between the union confederations and the national employers’ association, although legislation plays some role. The Work Environment Act, (known by its Norwegian initials as AML), which was first passed in 1977 and has been subsequently substantially amended, deals with a range of issues including health and safety representation (see below) and arrangements in cases of large-scale redundancies and transfers. However, in the general area of information and consultation, it specifically permits collective agreements to take precedence over its terms, so its impact here is effectively limited to non-unionised companies. In addition, amendments to the AML, which came into effect at the start of 2006, were used to implement the EU’s 2002 information and consultation directive (2002/14/EC) and so provide basic information and consultation rights in companies with 50 or more employees.

The most important of the basic agreements providing the framework for employee representation is that between Norway’s largest union confederation, LO, and its largest employers’ association, NHO. The other basic agreements are similar, although there are some differences. For example, the ratio of union representatives to union members varies slightly between the agreements with NHO and those with the employers’ association for private services Virke. There are particularly important differences between the basic agreements for the private and public sectors (see below).

In private sector companies covered by the basic agreement, the employees are represented by their union representatives / shop stewards (tillitsvalgte), elected by the union members. These are the key figures in employee representation in Norway. However, as the main agreement states they are “representatives … of the organised employees”, in other words, the union members.

In addition to union representatives, and of much less importance, a works council (bedriftsutvalg), elected by all employees, should be set up in companies with 100 or more employees. There is also the possibility of setting up departmental councils (avdelingsutvalg) in larger companies – those with more than 200 employees – where there are separate departments, or in companies with between 100 and 200 where departments are clearly separate because of their geography or in some other way. However, it is important to recognise that these arrangements, which are set out in Part B of the agreement (the main rights are in Part A), originally grew out of the production committees set up after World War II and their key role is to improve the efficiency and competitiveness of companies through increased cooperation between the employees and their representatives and the employer, rather than being the main channel for employee representation.

In the public sector, the works council structure does not exist – the agreements for the sector do not provide for it, and clearly state that the right to participation is “best exercised” by union representatives. However, the Local Government Act provides for a joint committee (administrasjonsutvalget) composed of elected political representatives of the municipality and representatives elected from among the employees. There are also other differences in the public sector in the way that unions are able to influence employers’ plans (see section on tasks and rights).

In non-unionised companies the only rights are those which come from the 2006 legislation (AML) which states only that employers with 50 or more employees must inform and consult with employee representatives without providing any detail on their election or rights.

In addition, in companies with at least 50 employees (or with between 20 and 50 if the union or the employer wishes or the labour inspector considers it necessary – in which case there is no lower limit), a working environment committee should be set up to deal with health and safety issues. (This is a legal requirement under the AML legislation.) This is in addition to the right under the AML legislation that safety representatives should be elected in all undertakings, although in those with fewer than 10 employees the two sides may reach a written agreement not to have safety representatives. Where safety representatives are present, they have the right to halt work if they consider “that the life or health of employees is in immediate danger and such danger cannot be averted by other means.”

Numbers and structure

The number of union representatives is linked directly to the number of union members in the company who belong to each union confederation. In the basic agreements of both LO and YS with the NHO the number ranges from two to 12. In theory there is no minimum number of union members required before there is a right to have union representatives (see table). In practice, employers insist that there must be two union members before one of them can be elected as a union representative.

Number of employees in union	Number of union representatives
Up to 25	2
26 to 50	3
51 to 150	4
151 to 300	6
301 to 500	8
501 to 750	10
More than 750	12

The fact that the entitlement is per confederation, means that a company with 40 LO members and 10 YS members could in theory have three LO union representatives and two YS representatives. The basic agreement also states individual companies can agree to have a higher number of union representatives if appropriate, and that this must happen if there are more separate working groups in the company than the number of union representatives in the table (see section on election and term of office).

The union representatives should elect a chair, vice-chair and secretary, who form the executive committee.

In addition to these specific provisions set out in the basic agreement, there is also a recommendation that the union and the employer at each company should reach their own agreement to find “practical forms” which allow them to work together. A study undertaken by the research body Fafo in 2009, which looked at all forms of the union/employer relationship at company level found that the parties generally did find their own ‘practical forms’ and that the formal rules and regulations were of less importance. However, it also found that where relationships were difficult or hostile the trade union representatives fell back on the precise provisions of the basic agreement.[1]

The rights that result from the 2006 amendments to AML, which implement the EU’s 2002 information and consultation directive (2002/14/EC), relate to companies with “at least 50 employees”. The AML states (§ 8-1) that “the ministry may issue regulations on the calculation of the number of employees in the enterprise” but no such regulations have been issued. It is only clear that both full-time and part-time employees must be included in the calculation.[2]

Works councils, whose main task is to improve efficiency and productivity (see section on tasks and rights), should be set up in unionised companies with at least 100 employees, and they can be set up in companies with fewer than 100 employees provided either the union or the employer requests it and the union confederation and the nation employers’ association agree. Companies without unions, which are therefore not covered by the basic agreement, do not have a works council structure.

Most employees are not covered by works councils. The Fafo study referred to above found that only one third of private sector employees worked in companies with a works council, and only one third of employees in companies with more than 200 employees – the threshold – reported that a departmental council had been set up. However, this does not necessarily mean that cooperation does not take place, only that other forms, and possibly other terms, are used.

Works councils are joint bodies and consist of equal number of employee and management representatives. The number of employee members varies according to the size of the company (see table).

Number of employees	Number of employee members
Fewer than 100 (not obligatory)	3
100 to 400	5
More than 400	7

Although all employees can vote for members of the works council, including non-unionised employees (see below), unions are guaranteed a role in the composition of works councils: the leading union representatives are automatically present. Where the works council has three or five employee members, one of them must be the chair of the union representatives; where the works council has seven members, one must be the chair and another the vice-chair or another member of the union executive committee. The basic agreement also provides for guaranteed representation for specific groups of employees. In works councils with three employee members, one must be elected jointly by the supervisory, technical and sales staff; in works councils with five employee members, one must be elected by supervisory staff and one jointly by the technical and sales staff; and in works councils with seven employee members, one each is elected by the supervisory staff, the technical staff and the sales staff.

The chair of the works council alternates on an annual basis between the employees’ and the management side, and the side which does not provide the chair provides the secretary.

The works council should normally meet at least once a month.

Where there are department councils (normally only possible where a company has at least 200 employees), the unions and management at company level decide on their composition. However, they must include the senior union representative in the department on the employee side.

Where there is a working environment committee covering health and safety issues (normally possible where a company has at least 50 employees), there should be an equal number of employee and management representatives. In addition, those responsible for health and safety in the company should also be on the committee, but with no vote.

Tasks and rights

Union representatives play the key role in representing employees in the organisations in which they work. They are the main recipients of information provided by the employer; they must be consulted by the employer before major changes can be made; they are involved in disputes between management and individual employees; and they also negotiate on terms and conditions at the company within the framework of the industry-level agreement. This is in addition to their role on behalf of the union in recruiting new members.

Although they represent their members, the basic agreement emphasises the need for “good and trusting relationships between the employees, their union representatives and the enterprise”. It also states that “the management of the enterprise, the employees and their union representatives have a common duty to take the initiative and actively support and contribute towards cooperation.”

The tasks and rights of the union representatives are set out in a number of different chapters of and annexes to the basic agreement, reflecting the fact that they have been negotiated over time.

In the area of information and consultation, the management should have discussions with the union representatives on at least a monthly basis on the following topics:

the financial position of the company and its production and development,
workplace issues, and ongoing operations; and
pay and working conditions, with particular attention being paid to any use of contract employees and agency workers.

Accounts should be provided if requested and the annual financial statement should be given to the union representatives as soon as it has been adopted.

In addition, the basic agreement makes specific reference to two types of change, which it says should be discussed with the union representatives as soon as possible. The first covers changes in working conditions, the reorganisation of production systems and plans to increase or reduce the number of employees. The second is where a company plans to merge with another business, dispose of parts of its operations, close down completely or change its legal form. In both cases management must give the reasons for its actions and set out their legal and employment consequences. Where employees are being transferred, the union representatives have the right to meet the new owner, and where a company is being closed down, the union representatives must have the opportunity of discussing whether the employees wish to take over the business.

Where a company plans to take decisions that affect employees’ jobs and working conditions, union representatives should have an opportunity to present their views, and where their views are not accepted, the company must explain its reasons, which should be recorded in the minutes.

In the specific area of lay-offs, which cannot last for longer than six months, union representatives must be consulted in advance.

The basic agreement and its annexes also include several references to specific issues where information should be provided. These include:

lists of new employees;
details of share transactions when a new buyer acquires more than 10% of the shares or increases his or her holding to more than a third of the shares;
information on the introduction of new technology and on surveillance methods; company objectives for future training; and
progress towards gender equality.

Union representatives are entitled to see in advance all briefing materials that the management intends to present to employees and there should be at least an annual meeting with all employees where management provides a briefing on the company’s position and prospects.

Union representatives also have the right to meet the directors of the company, where either side requests this. These “contact meetings” are intended to allow union representatives to “present their views to the owner’s representatives on the board of directors”.

These are all rights as set out in the basic agreement. In addition, the AML legislation contains the requirement for management to consult with employees’ representatives “at the earliest opportunity” on large-scale redundancies and “as early as possible”, where employees are being transferred to a new company.

As well as their role in information and consultation, union representatives under the basic agreement have a personal representation role, in that they “have the right to deal with and to try to settle amicably any grievance individual employees may have against the enterprise or the enterprise may have against individual employees.” They must also be consulted before any individual is dismissed, provided the individual employees have no objection.

Union representatives also have a negotiating role under the basic agreement, which states that they “have the right to commit the employees in matters that concern the entire workforce or groups of employees”, provided that this is within the terms of the industry agreement and that they have consulted the employees on the issue, where necessary. The negotiations should be with the appropriate level of management.

As well as the structure of union representatives, there is also a joint employee-management works council in larger unionised companies – normally those with more than 100 employees. As already noted, this is not the main channel for employee representation. Instead, its main role is to improve efficiency and competitiveness. As the basic agreement states, “the main task of the works council is, through cooperation, to work for the most efficient production possible and for maximum wellbeing of all who work” at the company. It should receive regular reports on the financial situation of the company and management plans in a range of areas, such as investment and restructuring. Its views should be presented to the board of directors or the shareholders and it has the authority to set general guidelines in the area of training and education. Management may also give it authority for implementing social welfare measures, within a set budget.

However, the works council may not deal with questions relating to pay or working hours or questions relating to the interpretation of collective agreements. These are the exclusive responsibility of the union representatives, who are much more important in the Norwegian system.

The situation is different in the public sector, where, among other things, there is no provision for works councils. However, as well as providing union representatives with extensive information and consultation rights, the basic agreement for the state sector (largely central government), for example, gives them the right to negotiate certain organisational changes, provided the changes are not of a political nature. Changes made to the basic agreement, to adjust it to the specific circumstances of a particular state agency must also be negotiated.

In both cases, if the two sides do not agree the issue is referred to a tribunal made up of representatives of the employer and the relevant union confederation, with a neutral chair.

In non-union companies, employee representatives, where they exist have, under the AML legislation, the right to be informed about the company’s activities and economic situation, and to be informed and consulted about both the employment situation in the company, including any planned cutbacks, and any decisions that might result in significant changes in work organisation or conditions of employment. This is in addition to the right to be informed and consulted about large-scale redundancies and business transfers.

Election and term of office

Union representatives are elected by the union members in the company. The precise arrangements for the election are to be determined at company level but the basic agreement states that the election of union representatives can be arranged by groups and that any working group that has at least 25 employees is entitled to a separate union representative, even if this takes the total over the normal limits. The basic agreement states that union representatives should be elected from among “workers of recognised ability, with experience of and insight into working conditions” at the company, and, if possible, they should have been employed for at least two years.

It also states that union members who are in a particular position of trust in the company, such as a manager or the personal secretary to the management, or who represent the employer in pay and conditions negotiations, may not be elected as union representatives.

Under the terms of the basic agreement, the term of office for union representatives is one year, although the key union representatives – chair, secretary and vice-chair – can be elected to their positions for two years.

Employee members of the works council, other than the senior union representatives who have an automatic seat (see section on numbers and structure), are elected by written secret ballot. All employees have a vote, whether or not they are union members. The election is organised within the different groups of the company by the appropriate union representatives, who should confer together if several unions are involved. The candidates should be over 20 and recognised to be competent and, if possible, they should have worked in the company for at least two years.

The term of office for the elected members is two years.

Protection against dismissal

The basic agreement states that where union representatives are dismissed “due regard should be given to the special position” they have in the company. They should have at least three months’ notice unless the cause of the dismissal relates to the individual’s own conduct. Management should discuss the planned dismissal of a union representative with the union executive committee in the organisation (chair, secretary and vice-chair) and, if the union confederation nationally considers the dismissal was not justified, the individual cannot be dismissed until a labour court has heard the case.

Employee members of the works council have exactly the same protection.

Time-off and other resources

Under the terms of the basic agreement, union representatives must be allowed the time they need to perform their duties, and a local agreement may set out the precise terms of the arrangements. They can hold their meetings during working hours without loss of wages, provided management agrees, and they must be paid for the time they spend in negotiations with management and in meetings of the works council, if one exists. In practice, union representatives will be entirely freed from their normal duties in larger organisations, with their wages continuing to be paid by the employer.

The basic agreement suggests that there should be local discussions to decide on the extent of the material support they are given but it indicates that, where it is practicable and can be agreed, they should have access to the office equipment used in the company. In any case they should have access to a telephone, a locker and access to appropriate communications equipment, where this is present.

They can also use external experts, although management must be informed in advance. The question of who bears the costs of these external experts is determined by local agreement, although in the case of large-scale redundancies, the AML legislation states that the company must pay.

There are no specific arrangements for time off or other resources for works council members.

Training rights

The basic agreement contains a clear commitment to providing training for union representatives. It states that “representatives of both the workers and the enterprise should have the best possible qualifications for dealing with questions of cooperation” and that “through providing information and courses the central organisations will seek to train the parties' representatives for the duties incumbent upon them.”

Elsewhere it makes clear that union representatives must not, unless absolutely necessary, be refused leave of absence when asked to take part in union courses or other informative union activities. And it also states that employees who are being trained for positions of trust within the trade union, are also to be given leave of absence to a reasonable extent to attend union courses.

In practice, Norwegian union put substantial resources into training union representatives. Norway’s largest individual union, Fagforbundet, states on its website that “all our shop stewards must have training, and about 8,000 shop stewards participate each year. The union's union election training is free, and includes travel, accommodation and course materials. The trade union is responsible for training its own shop stewards.”[3]

The basic agreement also states that the right to leave applies for educational courses lasting up to one week for employee representatives at board level (see section on board-level employee representation), and that the representative must be paid for loss of earnings in connection with courses approved by the enterprise.

Representation at group level

The basic agreement provides for the establishment of a group committee of union representatives in groups of companies and suggests three ways of doing this. (Chapter XVI in the LO/NHO basic agreement.) Where all parts of the group are covered by the same collective agreement, a coordinating committee of union representatives, made up of the chairs of the union committees from the different parts of the group, can be formed. Another possibility is a committee made up of union representatives from different parts of the group plus other employee representatives from the works council who meet senior management to discuss developments at least once a year. Finally, other non-specified forms of cooperation can be used.

In addition, the basic agreement also provides for the possibility that, where the group of companies has more than 200 employees, a group union representative can be elected. As with the group committee, the group union representative can be elected in different ways: for example, there can be a single group union representative representing all the union confederations in the company, or group union representatives from each of the confederations. A number of studies have shown that these individuals are often the most important union figures in the group. In particular, they play an important role in restructuring and organisational change.

[1] Bedriftsdemokratiets tilstand Medbestemmelse, medvirkning og innflytelse i 2009, by Eivind Falkum, Inger Marie Hagen and Sissel C. Trygstad, Fafo-rapport 2009:35 https://www.fafo.no/zoo-publikasjoner/fafo-rapporter/item/bedriftsdemokratiets-tilstand (Accessed 25.05.2021)

[2] Medvirkning og medbestemmelse i arbeidslivet Del 4 https://www.regjeringen.no/no/dokumenter/NOU-2010-01/id597723/?ch=5#kap6 (Accessed 25.05.2021)

[3] Fagforbundet website https://www.fagforbundet.no/for-tillitsvalgte/ny-som-tillitsvalgt/ (Accessed 25.05.2021)

The right to have a single employee representative at board level starts with companies with 30 employees in Norway. In companies with more than 50 workers, one third of board members are elected by and come from the employees.

Employees in Norwegian companies with 30 or more employees in both the public and private sector are entitled to elect employee representatives on to the board of directors and in smaller companies this can be done on a voluntary basis. The right to elect employee representatives as directors is contained in a number of different laws, but most forms of company are covered, as are a number of state agencies, such as universities. The laws apply, with minor exceptions, to all workplaces which have a separate legal personality, with the precise number of board-level employee representatives depending on the number of employees.[1] Employee numbers are calculated on the basis set out in the Work Environment act (AML), with employees working more than half normal hours counted as single employees, while those working less than this are counted as half employees.[2]

In companies with between 30 and 50 employees, they are entitled to a single board member plus one observer, irrespective of the size of the board, and in companies with more than 50 but less than 200 employees, they are entitled to up to one third of the seats and at least two board members.

Companies with more than 200 employees should in principle have a different structure, with a corporate assembly (bedriftsforsamling) as well as a board. The corporate assembly must have at least 12 members, with two-thirds elected by the shareholders and one third elected by and from the employees. The corporate assembly has a general supervisory role and may take decisions on large scale investments or restructuring. The corporate assembly also chooses the board of directors, although one third of the board (at least two members) continues to be chosen by the employees. However, companies with more than 200 employees can chose not to have a corporate assembly, provided that they have reached agreement with unions representing at least two-thirds of all the employees. In this case the employees are entitled to an additional board member on top of the one third they already have, plus two additional observers.

In practice, a study by the research group Fafo published in 2015 found that fewer than 20 companies with more than 200 employees actually had a corporate assembly.[3] However, only two-thirds of these companies compensated employees with the additional board level representation the law requires. Around one third did not.

In private sector companies with fewer than 200 employees, board-level employee representation is not automatic; the employees must request it, either through a formal request signed by at least 50% of the workforce or a majority vote on the issue, which can be initiated by either the works council or one of the company unions. However, if a request along these lines is received, and the company has 30 or more employees, employee board-level representation must be established. In practice, while employee directors are common among larger companies, they are found less frequently in smaller ones.

The 2015 Fafo study, which looked at all affected companies on the basis of the business register, found that 57% of companies with 200 or more employees had employee directors, but the figure fell to 31% for those with between 50 and 199 employees and 12% with those between 30 and 49. The overall percentage for all companies with 30 or more employees was 26%.

The same legislation applies to groups of companies, where employees have a right to directors on the group board. Here the 2015 Fafo study found a similar pattern of employee involvement: 66% among those with 200 or more employees, 38% among those with 50 to 199 employees, 18% among those with 30 to 49 employees, and 41% overall.

A more recent Fafo study looked in detail at the proportion of private sector employees working in companies with employee representation at board level in 2018.[4] It found that 29% of all private sector employees worked in companies with board-level employee representation, but that if only employees working in companies above the threshold above which employees can request board-level representation (at least 30 employees) were examined, the proportion rose to 55%. If only companies where board-level employee representation is mandatory (at least 200 employees) were considered, the proportion working in companies with board-level representation was higher still at 72%.

These proportions were, however, lower than three years earlier, when 36% of all private sector employees, 61% of employees in companies above the 30-employee threshold and 79% of employees above the 200-employee threshold, had board-level employee representation.

The arrangements for the election of board-level employee representatives are set out in separate regulations.[5] All employees employed by the company on election day, other than managers and those owning more than 10% of share capital the company, have a right to vote, although the votes of part-time employees only count for half those of full-time employees. Everyone with a right to vote has the right to make a nomination as does the local trade union. If the election is conducted using a list system, nominations must be supported by six employees or the local union.

Candidates must be employees of the company, and at least one female candidate must be nominated if women make up more than a third of the company’s employees. If two or more board members are to be elected there must be at least one candidate of each sex, unless one of the sexes make up fewer than 20% of the company’s employees. Each gender must also be included among the elected members, if there are two be two or more, unless one of the sexes make up fewer than 20% of the company’s employees. Elections take place every two years, although the term of office runs until the end of the annual general meeting in the year in which the election period ends.

The unions have considerable influence on the election process and often the leading union figures within the company are also the employee representatives on the board.

Unusually there is specific provision for training for board-level employee representatives. The basic agreement between the main employers’ association and the LO union confederation states that they have a right to leave for educational courses lasting up to one week.

Employee directors have the same powers and rights as all other directors.

[1] Flere styrer – færre ansattevalgte styremedlemmerby Inger Marie Hagen, Søkelys på arbeidslivet04 / 2017 (Volum 34), 2017 https://www.idunn.no/spa/2017/04/flere_styrer_faerre_ansattevalgte_styremedlemmer (Accessed 26.04.2021)

[2] Medvirkning og medbestemmelse i arbeidslivet, 6.1.3 NOU 2010: 01, 2010 https://www.regjeringen.no/no/dokumenter/NOU-2010-01/id597723/?ch=5#kap9 (Accessed 26.05.2021)

[3] Et sidespor: den demokratiske bedriftsforsamling by Inger Marie Hagen, Fafo-rapport 2015:34, 2015 https://www.fafo.no/images/pub/2015/20439.pdf (Accessed 26.05.2021)

[4] Ansattes styrerepresentasjon i privat sektor by Inger Marie Hagen and Elin Svarstad, Fafo-notat 2021:07 https://www.fafo.no/images/pub/2021/10344.pdf (Accessed 26.05.2021)

[5] Forskrift om de ansattes rett til representasjon i aksjeselskapers og allmennaksjeselskapers styre og bedriftsforsamling, 2017

There is a difference in the way that Norwegian representatives on European Works Councils and those within the European Company are chosen. While representatives for the EWC are elected by all employees, representatives in the European Company structure are, in the first instance, chosen by the local unions.

European Works Councils

Norwegian members of the special negotiating body (SNB) for a European Works Council (EWC) are elected by the employees. The elections are either conducted in the same way as those for employee members of national works councils, that is through a written secret ballot in an election organised within the different groups of the company by the appropriate union representatives, or, if this is not appropriate, they are chosen using the method for the election of employee board-level representatives, which also give the union representatives an important role. They must be employees. (The rules for EWCs in Norway were initially part of the basic agreement between the union confederation LO and the national employers’ association NHO and then made generally applicable by the Norwegian parliament.)

If the SNB is unable to reach agreement with management after two years of negotiation, or if negotiations are terminated earlier because agreement cannot be reached, or if management refuses to begin negotiations within a period of six months, the issue is referred to a joint union employer body. This body – the Bedriftsdemokratinemnd or industrial democracy board – is made up of representatives of both LO and the employers’ association NHO with a neutral chair. It has the power to instruct a company to set up an EWC, whose structure and duties “shall be determined by the board”. These arrangements replace the normal fallback provisions which other states have used to implement the terms of the annex to the directive.

European Company

Norwegian members of the special negotiating body (SNB) for the European Company can be chosen by the unions in the company, provided they represent at least two-thirds of the employees. If this is not the case, or if the unions cannot agree who should be chosen, the SNB members are elected by all the employees. Only employees can be SNB members.

The same rules apply for Norwegian members of the SE representative body (arbeidstakernes representasjonsorgan) as set up under the fallback provisions of the directive.

Norwegian employee representatives at board level in a European Company set up under the terms of the annex to the directive are also appointed in the same way – by the unions if they represent two-thirds of employees, otherwise by elections. Again they must be employees.

Financial Participation

By European comparison workers’ financial participation schemes in Norway are relatively widespread. Since the 1980s profit-sharing and employee share ownership schemes have been customary in large Norwegian companies.

In the past two decades more and more Norwegian companies have introduced profit-sharing and employee share ownership schemes.1 var obj = document.getElementById('note_hidden'); obj.value = obj.value + '1

1. Langeland, O. (1999): Employee share ownership and stock options on the increase.

Basic Data on Profit-Sharing / Employee Share Ownership

In Norway various forms of participation in the enterprise are possible for employees. The incidence of profit-sharing and employee share ownership schemes is slightly above-average by European comparison and related to the size and nature of the company.

The structure of profit-sharing and employee share ownership schemes in Norway is not uniform. Companies can set up employee share ownership schemes with different conditions.1 var obj = document.getElementById('note_hidden'); obj.value = obj.value + '1

1. Nordbø, E. et al. (2011): Employee share plans: Norway. A Q&A guide to employee share plans law in Norway.

Legal background

There is little by way of tax incentives for workers’ financial participation in Norway.

Typically, the structure of employee share ownership schemes in Norway is relatively simple. Specific tax concessions apply only to some forms of employee share ownership, which counts as regular income. Income tax and social security contributions thus have to be paid. Capital gains and profit made on selling employee shares are taxed at the usual rate of 28%. If all employees benefit from an employee share ownership scheme 20% of the capital gains is tax-exempt. Thus it doesn’t make any difference from a tax perspective if there is differentiation between employees on the basis of length of employment and level of income. The tax benefit of broadly-based employee share ownership schemes is limited to 1,500 Norwegian krone (around 185 euros) per year.1 var obj = document.getElementById('note_hidden'); obj.value = obj.value + '1

1. Nordbø, E. et al. (2011): Employee share plans: Norway. A Q&A guide to employee share plans law in Norway.

Trade Union Positions

In Norway the trade unions are typically in a strong position. In recent years they have developed a more open attitude with regard to profit-sharing or employee share ownership schemes.

In Norway the trade unions are strong and employee participation in company decision-making is underpinned by a robust legal and institutional context.1 var obj = document.getElementById('note_hidden'); obj.value = obj.value + '1

1. Brøgger, B. (2010): An innovative approach to employee participation in a Norwegian retail chain. In: Economic and Industrial Democracy, Vol. 31(4): 477–495.

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