Definitive Report - Report No 234, June 1984

Case No 1255 (Norway) - Complaint date: 12-JAN-84 - Closed

1. 171. The Norwegian Trade Union Federation of Oil Workers (Oljearbeidernes Fellessammenslutning, OFS) presented a complaint of violation to trade union rights in Norway in a communication dated 12 January 1984. The Government supplied its observations in a communication dated 13 April 1984.
2. 172. Norway has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainant's allegations

1. 173. In its communication of 12 January 1984, the OFS alleges that in 1980, 1981 and 1982 the Government of Norway violated Conventions Nos. 87 and 98 by introducing, when negotiations in the petroleum-producing sector were deadlocked, ad hoc legislation prohibiting the complainant organisation's right to strike and referring the disputes to compulsory arbitration; in addition, the OFS maintains that the body to which the disputes were referred in 1980, 1981 and 1982 - the National Wages Board - is not independent since the majority of its members are appointed by the Government.
   • The complainant points out that under Norwegian law workers' organisations have a duty to keep the peace during compulsory conciliation proceedings but, once such proceedings fail they have the right to resort to industrial action. However, according to the complainant, the Government prohibited the legal strikes by introducing Provisional Ordinance of 18 July 1980 when the members of the OFS had been striking for two weeks in that case, Provisional Ordinance of 15 August 1981 when the strike had not yet commenced, and Bill No. 15 of 1982-83 before the strike had commenced, the Act being passed by Parliament several days later when the legal strike in question had already commenced. The complainant explains that in 1980 and 1981 provincial ordinances were passed by the King in Council under section 17 of the Norwegian Constitution since Parliament was not in session when the disputes arose, and the Government Bill was used in 1982 since Parliament was in session.
2. 174. The OFS states that the Government has given several different reasons for prohibiting strikes and referring collective bargaining disputes to arbitration: first, reference has been made to the considerable loss of revenue in the form of taxes, rates and dues from oil production; secondly, it has been claimed that a long-lasting strike may result in other groups of employees being given temporary leave of absence without pay; thirdly, it has been alleged that a lengthy closure of the production plants may entail safety problems of corrosion and leakage and that strike action would lead to increased danger of accidents. The OFS, however, answers these reasons stating that it has always co-operated in ensuring that the safety conditions on production installations do not deteriorate during strike action. The organisation has made available safety crews required by the employers and there has been virtually no increased risk of accident or damage caused by strike action. Moreover, the OFS maintains that a strike on the production installations in the North Sea will not affect Norwegian industry in general, or if so, only to a small degree. For example, in 1980 when the strike lasted for two weeks, only 928 workers were laid off on account of the strike although about 1,800 workers participated in it. The complainant states that neither the risk of loss of revenue, nor the danger of far-reaching consequences for the Norwegian industry in general, are sufficient reasons for justifying such interference by the Government.
3. 175. The OFS alleges that strike prohibitions have deprived it of the most important instrument for achieving satisfactory agreements on wages and conditions of employment. The employers are virtually exempted from carrying on any collective bargaining with the organisation in such situations and, if no collective agreement is concluded, the employers can expect that no stoppage of work will take place and that the wages and conditions of employment will be fixed by the National Wages Board in accordance with the Government's intervention measures. According to the OFS, in this situation workers would see little purpose in joining any workers' organisation and the organisation loses prestige among its members and would suffer loss of authority in its relationship with the employers.
4. 176. The OFS goes on to explain in detail the background to the 1980, 1981 and 1982 disputes. It entered into negotiations with the operating companies (Philips Petroleum Company Norway, Mobil Exploration Norway Incorporated and Elf Aquitane Norge A/S) on 6 February 1980 and negotiations continued until 21 May when it broke off negotiations and gave strike notice. On 23 May the national conciliation officer issued an order prohibiting any work stoppage and compulsory conciliation proceedings commenced on 5 June. Twelve conciliation meetings took place without any success and a work stoppage commenced on 3 July 1980. The Government reacted by introducing the Provisional Ordinance of 18 July 1980. Under the Provisional Ordinance the dispute was referred to compulsory arbitration before the National Wages Board which made decisions on 8 and 16 October and 1 December, stipulating the new wages of the OFS members as well as the contents of the collective agreement as a whole which was to remain in force for two years from 1 April 1980. It was decided, however, that the workers had the right to negotiate an increase of wages from 1 April 1981 and industrial action might be used if agreement would not be obtained. It was within this context that the second dispute arose. The parties entered into negotiations which broke down without result on 3 April 1981. The national conciliation officer issued a provisional order prohibiting any work stoppage and summoning the parties to compulsory conciliation. These proceedings were postponed pending the outcome of the principal wage negotiations concerning workers ashore. On 3 July, when these results were known, the national conciliation officer presented a proposal for a collective agreement which was submitted to a direct vote by the OFS members who, however, rejected it by a clear margin. Accordingly, a work stoppage was put into effect from 24 August 1981. On the same day the parties were summoned to a meeting with the responsible Minister who announced that the Government was going to adopt an order prohibiting any work stoppage and appealed to the OFS to refrain from striking until the provisional order had been formally adopted. The OFS did not agree with this and on 25 August the provisional ordinance prohibiting any strikes was adopted by order of the King in Council. Thereafter, the strike was ended and the dispute was referred to the National Wages Board which decided on a wage increase amounting to 1 per cent for the OFS members. The complainant organisation stresses in this connection that the three employer companies at the same time had given their unorganised employees general wage increases ranging from 5 to 15 per cent, a fact which led to several illegal strikes outside the control of the OFS during autumn of 1981. These illegal strikes compelled the employers to adopt completely new pay regulations involving wage increases more closely conforming with the increases already given to non-unionised workers. Negotiations for a new collective agreement for the 1982 period again failed over the question of the pay regulations which had been adopted after the illegal strikes in 1981. Negotiations were broken off on 18 May and the national conciliation officer summoned the parties to compulsory conciliation. After several unsuccessful meetings the workers' organisations gave notice that they would go on strike on 24 August 1982. In a voluntary conciliation meeting on 24 and 25 August the national conciliation officer put forward a compromise proposal which was again rejected by a direct vote of the workers concerned. After further unsuccessful attempts at agreement the workers decided to stop work as of 13 October. On that day the parties were summoned to a meeting with the minister concerned who advised that the Government again proposed to use compulsory arbitration and again asked the workers' organisations to refrain from striking. The Government Bill was adopted on 18 October 1982. During the five days between proposing the Bill and adoption, the strike took place but it was immediately brought to an end once Parliament adopted the Act. The dispute was referred to settlement by the National Wages Board which decided in favour of the employers.
5. 177. The complainant organisation points out that the Government's reasons for resorting to compulsory arbitration have always been loss of revenue and not that a strike would threaten vital public interests by endangering the security of the nation or the health of the population. According to the OFS, a strike in the oilfields would not threaten the supply of necessities to the community, including the supply of oil to the country; most of the production from the oil fields goes by pipeline to other countries and Norway imports most of its oil from abroad. In this connection the OFS points out that in addition to being concerned with revenue, the Government claims that oil workers' wages might affect wages in other industries. Therefore, the Government has attached much importance to the task of moderating wage increases, in particular to the oil industry through the means of compulsory arbitration. According to the OFS, the Government uses the National Wages Board since the majority of its members are appointed by the Government. For example, the Chairman of the Board from 1981 to 1983 was the National Director of Price Control, and one of the other members of the Board is also a member of the National Tax Board and of the National Oil Taxation Appeal Board. The practical implications of the Government's incomes policy within the Board is to intervene on the side of the employer to restrict nominal wage increases and to prohibit strikes. The OFS points out that the Board is composed of seven members, five of whom are appointed by the Government, the parties to each dispute appointing one member each. Two of the members appointed by the Government come from the two largest organisations on the employer and the worker side, that is, the Norwegian Employers' Confederation and the Norwegian Federation of Trade Unions (LO). The OFS points out that it is not a member of the LO and that competition exists between the two organisations for membership of the oilfield workers. The practical consequences of this have been that the LO members of the National Wages Board who should represent the interests of oil employees thereon, have always voted against the claims of the workers.
6. 178. Lastly, the OFS alleges that the National Wages Board in its decisions has followed the practice of punishing the workers' organisations directly for having used the right to carry out legal strikes. For example, the Board has adopted a principle to the effect that wage increases decided by the Board during a strike shall come into force on the date on which the strike terminates, if no strikes have been commenced the wage increases are in effect from the date of expiry of the last collective agreement. Yet when the size of wage increases is calculated, the Board uses the expiry date of the last collective agreement as its basis. The OFS emphasises that this occurs in cases where strikes have been carried out legally and without making any evaluation as to which of the parties is to blame for the dispute not being resolved without a strike.

B. The Government's reply

1. 179. In its communication of 13 April 1984, the Government gives a description of the background to the three events which coincides with that given by the complainant. First, the Government points out that in the spring of 1980 negotiations were entered into concerning the collective agreement between the oil workers and the employer bodies. Negotiations broke down on 21 May 1980 and the state mediator (ILO official translation, state conciliation officer, see LS 1927 - Nor. 1) issued a temporary prohibition against any stoppage of work under section 29(2) of Act No. 1 of 5 May 1927 concerning labour disputes and summoned the parties to compulsory mediation. Mediation procedures started on 5 June 1980 but were terminated on 1 July at the request of the workers' associations, after 12 mediation meetings had been held without success. On the same day as mediation was terminated the Minister of Local Government and Labour summoned the parties to a meeting to discuss the possibilities of resuming mediation. However, the workers' association subsequently gave notice that the OFS would convene a meeting on 3 July to discuss possible industrial action. According to the Government, in spite of this, the OFS members went on strike as early as midnight on 2 July. The strike led to a complete close down of production at all oilfields in the Ekofisnk and Statfjord areas. The Government goes on to explain that after the work stoppage the state mediator held several informal talks with the parties in an attempt to arrive at a basis for renewed mediation, but in vain. In view of the serious effects of the strike and the deadlock situation, the Government found itself compelled to propose that the conflict should be resolved without further direct industrial action and accordingly a decision was taken by the King in Council on 18 July 1980 to use compulsory arbitration and to end the 15-day-long strike. It was thereafter examined by the National Wages Board which drew up a comprehensive agreement which, according to the Government, was the first ever basic agreement between the parties.
2. 180. Secondly, the Government states that negotiations concerning the revision of the collective agreement expiring on 1 April 1981 broke down on 3 April 1981. The OFS gave notice to cease work for about 2,500 of its workers with effect from 3 May 1981. The state mediator issued a temporary prohibition against any stoppage of work and summoned the parties to compulsory mediation on 22 April. At a meeting on 30 April, the parties agreed to postpone further mediation until the negotiations at the central level were finalised. However, since no understanding was reached on a new collective wage agreement at the main negotiations it was resolved to refer that dispute to compulsory arbitration. Once the National Wages Board's ruling in the main settlement was made known on 20 June 1981, the parties were summoned to renewed arbitration on 3 July at which meeting the state mediator put forward a draft settlement for voting by the members of the OFS. Since the OFS members rejected the proposal, the OFS notified a step by step withdrawal from work by its members involving three oil sites. On 24 August 1981 the parties were summoned to the Ministry of Foreign Affairs (acting on behalf of the Ministry of Local Government and Labour), which meeting however again did not resolve the dispute. The Minister announced that to avoid any conflict the Government would propose that the dispute be referred to compulsory arbitration and he appealed to the OFS to postpone the intended work stoppage until the dispute had been dealt with by the extraordinary meeting of the Cabinet the following day. According to the Government, the OFS rejected this appeal and announced strike action at all oilfields as from 6 p.m. on 24 August 1981. On 25 August the Cabinet decided again to settle a dispute by compulsory arbitration, and a ruling of the National Wages Board was announced on 14 October 1981.
3. 181. Thirdly, the Government explains that negotiations towards a new collective agreement for 1982 broke down on 18 May 1982 and the state mediator issued a prohibition against direct industrial action and summoned the parties to compulsory mediation. Although mediation commenced on 28 May it terminated on 16 June without success after eight mediation meetings. New attempts were made at mediation on 5 and 6 July, but again no agreement was reached. According to the Government, the workers' associations then announced a new work stoppage for its members effective from 23 August 1982. After further mediation meetings, the state mediator put forward a settlement proposal for vote. Since the proposal was rejected by members of the workers' associations involved, the Minister of Local Government and Labour convened a meeting on 13 October which was again unsuccessful. The Minister then made it clear that in the current economic situation the Government was prepared to propose that the dispute should be settled by compulsory arbitration and requested the workers' associations to postpone strike action until such proposal had been considered by Parliament. This appeal was rejected by the workers who announced that the strike would commence with effect from 13 October at 1200 hours. The Government presented its proposal for compulsory arbitration which was adopted by Parliament on 18 October 1982 thus terminating the five-day-long strike. The National Wages Board issued its ruling in this case on 30 December 1982.
4. 182. The Government points out that it is the State which must bear the greatest financial loss in the event of a temporary production stoppage in the North Sea oil-producing installations. According to the Government, the 15-day-long conflict in 1980 was estimated to have caused a loss of some NOK2,000 million in production earnings and an estimated NOK500 million in taxes and duties. A revenue loss of such dimensions is of great significance to the Norwegian economy. The Government gives several statistics maintaining that oil activity plays a crucial role in the Norwegian economy contributing some 17 per cent of the gross domestic product and 33 per cent of total exports. The Government stresses that oil tax revenue constitutes an essential factor in the fiscal and social security budget of the State and that the oil sector is also of great significance for employment, some 50,000 persons work in oil-related activity of which about 7,000 work on production platforms in the North Sea.
5. 183. According to the Government, in Norway there is in principle full freedom to strike, only the police service, the national defence forces and senior civil servants having restrictions thereon. It is the Norwegian Government's firm belief that workers' and employers' organisations are responsible for concluding collective wage agreements and for maintaining peaceful conditions in working life. It makes the point that too frequent use of compulsory arbitration may weaken the system of negotiation. Nevertheless, according to the Government, in today's society the effects of labour conflicts reach far beyond the parties directly involved; for example, the effects of a strike on society may be so serious and far-reaching that it would be indefensible for the authorities not to intervene. The Government explains that in Norway there is no permanent statutory authority for prohibiting strike action; such prohibitions must be adopted either by special legislation or by a provisional ordinance passed by the King in Council as was the case in the present situations. In each dispute, a concrete assessment is made of the damage which a strike could cause to society and voluntary solutions are invariably sought before the serious step is taken to prohibit a strike. The Government stresses that it is not its intention to prohibit production workers in the North Sea from the right to strike. However, its decisions in the 1980, 1981 and 1982 conflicts to propose compulsory arbitration were taken in the light of the likely extent of the harmful effects of the conflict. It points out that in these disputes workers on all production platforms in the Norwegian shelf were brought out on strike and there was very little possibility of an early settlement in each case.
6. 184. According to the Government, a further factor in its assessment of the 1980, 1981 and 1982 disputes concerned safety, which is of special importance owing to the particular climate and technological conditions in the North Sea. For example, in connection with the 1980 conflict, a number of problems of co-operation arose at some installations which led at times to confused conditions and to lapses of information to the control authorities. According to the Government, conditions such as these increase the danger of mishaps and accidents. In this connection, the Government points out that ILO instruments protecting the right to organise and collective bargaining do authorise, under certain conditions, the prohibition of strikes both permanently and in individual cases after an evaluation of the likely harmful effects of strike action, and it therefore considers that the necessary conditions for prohibiting strike action were fulfilled in the conflicts in question in the North Sea.
7. 185. As regards the complainant organisation's criticisms of the National Wages Board, the Government refers to a previous case concerning Norway examined by the Committee in May 1982 (Case No. 1099, 217th Report, paras. 449-470, approved by the Governing Body at its 220th Session, May-June 1982]. In addition, the Government explains that the National Wages Board is a permanent arbitration body which is appointed pursuant to Act No. 7 of 19 December 1952 relating to wage committees in labour disputes; members of the Board are appointed by the King in Council for a three-year term; the Board is available to workers' and employers' organisations to settle labour conflicts and the State will bear the expenses of such arbitration; the Board is composed of seven members five of whom are appointed by the Government for a three-year term, three of those permanent members being independent of both the Government and of the workers' and employers' organisations; members represent the interests of the employers' and workers' sides respectively and must have special knowledge of the nationally applicable pay scales which are decisive for wage levels in the country; from the private sector the Government has appointed representatives from the two largest industrial organisations, the Norwegian Employers' Confederation and the LO who play only an advisory role on the Board and have no independent right to vote; the Act sets out the Board's rules for procedure which ensure that the parties may be represented by a counsel and are entitled to put before the Board all information which they consider to be of significance to the case in question. The Government therefore concludes that the Board is not bound by the Government's incomes policy and is completely independent.
8. 186. In this connection, the Government explains the appointment of the Director-General of Prices to the position of Chairman of the National Wages Board which was complained of by the OFS. It points out that when appointments are made, importance is attached to finding candidates with particular knowledge of the legal aspects of collective wage fixing and who enjoy general respect; in the present context it was indeed fortuitous that the person who was appointed Chairman was the Director-General of Prices. The Government states that the person in question left this post on 1 April 1983 to become a judge of a district court and in February 1984 was appointed a judge of the Supreme Court. Regarding the post of Chairman in general, the Government points that section 4 of Act No. 7 of 19 December 1952 relating to wage committees in labour disputes and section 13 of Act No. 1 of 5 May 1927 allow for objections to ineligibility of membership; for example, a member of the National Wages Board is disqualified in the same cases as a judge in ordinary civil cases.
   • In addition, the question of withdrawal of a member may be raised by both the member in question or by the parties to the dispute. The Government stresses that the OFS raised no such objection in the 1980, 1981 or 1982 disputes. As regards the OFS's complaint concerning another member of the National Wages Board who is also a member of the National Tax Board and of the National Taxation Appeal Board, the Government states that it is unable to see why the holding of such posts should disqualify a person from serving on the National Wages Board. It adds that the OFS again raised no ineligibility objections against this member during proceedings before the Board. Lastly on this point, the Government states that the OFS's assertion that the LO's representative on the National Wages Board (who was appointed owing to his special insight into nation-wide collective pay agreement conditions) has invariably voted against the workers' side in individual conflicts must be due to a misunderstanding since this representative is not entitled to vote.
9. 187. As regards the allegation that the Board's rulings punished workers for having engaged in industrial action, the Government stresses that the Board is in a free position from the authorities and that the Government has no authority to instruct the body as regards the date of entry into force or the size of wage increments. The Government also points out that it is the long-standing and fixed practice of the Board to decide on its own discretion when its ruling, and thereby the new collective agreement, will enter into force.
10. 188. Lastly, the Government refers to the alleged poor settlements resulting from the Board's decisions in 1980, 1981 and 1982. It supplies statistics which maintain that the take-home pay for all employees in this particular sector showed a 19.7 per cent growth between 1981 and 1983, whereas the average mainland manufacturing wage rose in the same period by 18.9 per cent.

C. The Committee's conclusions

1. 189. This case concerns alleged government intervention in the legal activities of the complainant trade union organisation through the adoption of special legislation prohibiting that organisation from calling a strike in disputes related to the negotiation of collective agreements in 1980, 1981 and 1982 and through the imposition of compulsory arbitration before a board which, in the complainant's opinion, is not impartial. The Committee notes that while the background to the situation in question is not in dispute, the complainant's version of the facts and the Government's explanations as to why this special legislation was adopted are contradictory.
   • Both parties give detailed descriptions as to the non-essential or essential nature of the sector in which the strike prohibition was imposed, and both parties give detailed descriptions of the composition of the National Wages Board which was called upon in that legislation to arbitrate the disputes as a compensatory procedure for the loss of oil-production workers of the right to strike.
2. 190. In this connection, the Committee notes that it has already examined a similar case against the Government of Norway to which the Government makes reference in its reply. [See Case No. 1099, 217th Report, paras. 449-470.] The Committee adopts the same conclusions it reached in that case as regards the strike action, namely, that restrictions on or a prohibition of what is an essential means available to workers to defend their occupational interests can only be accepted in the civil service or in essential services in the strict sense of the term, i.e. services the interruption of which would endanger the life, personal safety or health of the whole or part of the population. Applying this criterion to the particular circumstances of the present case, the Committee notes the information supplied concerning the general economic consequences of a strike on the North Sea oil-production installations. It considers that the withdrawal of services by the workers concerned, while possibly leading to a close down in production and serious consequences in the long term for the national economy, would not endanger the life, personal safety or health of the whole or part of the population. [See, for example, 233rd Report, Case No. 1225 (Brazil), para. 668.] It is, accordingly, of the opinion that the legislative action taken by the Government which resulted in the total exclusion of this particular category of employers from the possibility of taking strike action was inconsistent with the principles of freedom of association.
3. 191. As regards the further allegation that the body charged with the compulsory arbitration as a result of the legislation introduced to settle the 1980, 1981 and 1982 disputes is not impartial, the Committee notes that, according to the Government, adequate guarantees of impartiality were accorded to the workers concerned through the National Wages Board. After examining the composition and rules of procedure of this body, in particular as regards the right to vote, the Committee does not find itself in a position to uphold the allegation that the composition and procedures of the Board are such as to call into question its impartiality.

The Committee's recommendations

1. 192. In these circumstances, the Committee recommends the Governing Body to approve this report and, in particular, the following conclusions:
   • (a) As regards the legislation prohibiting strikes by certain employees in North Sea oil-production installations, the Committee considers that, despite the detailed information supplied by the Government as to the economic consequences of any such strike, the legislative action taken by the Government which resulted in the total exclusion of this particular category of workers from the possibility of taking strike action was inconsistent with the principles of freedom of association according to which strikes may only be prohibited or restricted in the civil service or in services that are strictly essential in character.
   • (b) As regards the allegation that the compensatory procedures provided by the Government under the legislation prohibiting strikes are not sufficiently impartial, the Committee does not find itself in a position to uphold the allegation that the composition or procedures of the body in question - the National Wages Board - are such as to call into question its impartiality.