Compulsory arbitration in wage setting in Norway­

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Åsmund Arup Seip, Fafo Institute for Labour and Social Reserach, Oslo

Use of wage committees for arbitration in labour disputes in Norway has roots far back. The Scandinavian labor congresses of the 1880s wanted to establish arbitration courts that could resolve labor disputes. While the Danes, by the turn of the century, had adopted arbitration to resolve disputes in working life, neither Sweden nor Norway had adopted a similar court system.

When a clearer understanding of the differences between disputes of interests and legal disputes was established through the use of collective agreements, arbitration became the normal way to handle legal disputes in Scandinavia and elsewhere, and labour court systems were institutionalized. However, from 1916 to 1922, the Norwegian government, with parliamentary support, started an extensive use of compulsory arbitration in disputes over wages. After the Second World War the government resumed this practice and established in 1952 a permanent wage board that could handle wage disputes. Since then, the government has regularly intervened on ad hoc basis with a peace duty in disputes of interests in the labour market. The National Wages Board will then settle the dispute by compulsory arbitration. The ILO and the Committee of Experts under The European Social Charter have criticized the Norwegian government on several occasions, arguing that the interventions have been violating the right to industrial action.

Despite the criticism from ILO and the Committee of Experts, state intervention in industrial action has a legitimate place in the Norwegian wage setting system. Both the social partners and the political institutions recognize compulsory arbitration as a mechanism to solve disputes in in the labour market, especially where “essential services” are involved. It seems therefor relevant to ask how this mechanism works, and why it is used. This article will examine the use of compulsory arbitration in labour disputes in Norway after 1990, and try to explain some off the effects of the mechanism on industrial action and public administration.