Meeting with Heads of Mission resident in Oslo

The Norwegian model of tripartite collaboration and the Government`s efforts and priorities in labour market policy.

Dear Excellencies

Thank you for this occasion to meet with all of you.

I`ve been Minister of Labour and Social Inclusion for only two months now, so please forgive me if I`m not entirely on top of everything.

And let me just state right away: I would love to hear more about how things are done in your countries as well, at a later occasion. As I am sure that we can learn a lot from each other.   

I`m born in Norway. My parents are from Pakistan. From the city of Quetta.

Growing up in Norway, I`ve been to Pakistan many times. Although not so much the last few years, as things have been keeping me busy here in Norway.

But considering the fact that my father came to Norway as a labour migrant in the early 70s, it`s only fitting that I am the minister of labour, don`t you think?

When it comes to productivity, according to OECD (2019), Norwegian workers are the second most productive workers in the world. Only the Irish are more productive.

Your Excellency Keith McBean, I understand that you are here. We would love to hear from you later about how the Irish are doing this.

I am going to claim that this is not in spite of our well-organized labour markets. It is because of the level of organization.

A high level of organization, as we see it, is not only better for each individual worker, but it is also better for us as a society.

It gives us a more well-functioning economy. It gives us very few social conflicts. And a high level of social cohesion.

A research foundation called Fafo, which I am sure many of you have heard about, has pointed out three basic pillars for the Norwegian or Nordic models of society:

  • Active states with a stability-oriented macroeconomic policy.
  • Universal welfare states contributing to income security, development of skills and labour market participation.
  • Strong social partners and coordinated collective bargaining. And obviously, in order to have collective bargaining, and for it to be relevant, you need well organized labour markets.

The three elements are interconnected.

For instance you need a high level of labour participation, in order to be able to finance universal welfare.

And you need solid levels of social cohesion, in order to have legitimacy around the levels of taxation needed for financing the welfare.

But today I will focus on the role of the social partners and the three-way interplay between them and the Government. This so-called tripartite collaboration is a key aspect in the Norwegian model.

The importance of having strong social partners has several dimensions, and I am going to specifically mention four of them.

1) The first aspect is the importance of trust and cooperation in the workplace and in society in itself.

Trust is such a valuable – and precious thing.

And the trustful collaboration between employers and employees – but also between Government and the social partners – is a very profitable resource for the Norwegian society.

And it makes totally economical sense to solve problems without lawyers if you can and solving them between partners instead.

2) Secondly: The social partners are responsible for bargaining on collective agreements, including wage settlements at industry and company level.

For the employees it gives them real influence on their own wages. And it turns out, again and again, that if you give someone responsibility to not only think about their own wallets, but to take into consideration societal gains, they actually end up doing so.

And for the employers, it gives them very reliable and productive workers, as the OECD statistics showed.

3) Thirdly, strong social partners working together has secured safe and decent working conditions. And that probably contributes to the elements of trust that we see.

4) Finally, the social partners participate in policy formation at national level.

Through political initiatives an extensive collaboration between Government and the social partners takes place.

This has produced well-functioning guidelines for wage formation, a low level of conflict, increased wages for workers combined with the beforementioned productivity growth for business.

The continuing dialogue between the social partners and the Government, reproduce trust between the partners.

I'm not implying that there never is any kind conflict of interest or any conflicts at all. Of course, there are, but they are generally resolved through dialogue and compromise.

Another important result of this, is that we have been able to maintain relatively small wage differences.

And also, a very competitive industry sector.

Because having a compressed wage structure produces less inequality between people and even encourages businesses to invest more in the skills of workers.

This has in turn been very beneficial for the growth of new, and more productive, industries – and better jobs.

Having a high labour force participation is yet another important result of the tripartite collaboration.

We have been able to consider expansion of welfare facilities like childcare and parental leave as social investments, which in turn allows for both women and men to make a career.

As some of you may know, a few years ago we compared the economical results of women participation in the work force in Norway with the OECD average participation of females. And we found out, that the Norwegian women's participation in the work force actually equals the worth of the Norwegian oil fund. So this means, Women are profitable than oil. Investing in women, and investing in welfare for women and families, is not only more just. It is also actually economically quite clever.

The Norwegian labour market model is above all a political construction.

It is bey no means genetical.

It is in my opinion quite necessary to invest resources and political will to reinforce the collaboration. This is a vital task for the new Government.

I will mention three important areas where our Government will present new initiatives aiming at a better functioning labour market policy:

1. Promote unionization and an organized working life

The Government is taking initiatives to increase the rate of unionization and the share of workers covered by collective agreements. A high unionization rate is in many ways a precondition for our way of organizing labour market and welfare.

so, I`m proud to say that in two years, the tax deduction for trade union dues will be doubled. And as far as I know it has never been done before in such a short period of time.
We will also reinforce collaboration with the social partners and include them in all councils and commissions that deliberate and prepare new policies, even on climate change.

Because climate change will influence all jobs, all sectors, all working conditions.

2. Promote full-time, permanent employment

We will take initiatives to change labour laws to strengthen workers` rights and clarify the roles as employer and employee.

We have seen a risk of more bogus self-employment in a working life with new possibilities for digitalization and platform work.

A commission on the Future of Work (Fougnerutvalget) with members from the social partners along with independent experts have proposed several interesting new changes in the Working Environment Act.

We have pledged to follow-up several of these proposals.  

And we will remove the general possibility for fixed-term employment and minimize the use of temporary work agencies.

The employers will still have a large degree of flexibility, when they need temporary workers to fill in vacancies, or short-term needs. But what we do not want is short-term employment for fulltime needs.

The last time we were in government, we introduced a regulation where trade unions could bring civil action on illegal contracts of service from temporary work agencies. The regulation was terminated by the former government, but we are now planning to reinstate the regulation.

3. Oppose social dumping and work-related crime

We will seek to counteract low wage-competition and social dumping through increased inspection from public agencies and strengthen their possibilities to use penalties.

A priority will be to use public procurement to promote suppliers that are professional, that abide by laws and regulations and that treat their workers well.

In our political platform we have declared a "thorough house cleaning" in working life. Yes – we seek to optimize work-life balance.

Our goal is to ensure all workers decent wage and working conditions
And also strengthen efforts to ensure the same for migrant workers.

Workers from European countries, and other continents as well, represent an important and increasing part of the Norwegian working life.

We are grateful for the helping hands of immigrant workers.

My father was one, and members of your countries are today.
However, they are also a very vulnerable group in the labour market that could benefit by closer connection to trade unions and collective agreements.

So very soon, the Labour Inspection Authority will scrutinise the situation for migrant workers in closer detail. So, thank you so much.

It`s been an honour talking to you. Thanks a lot for your attention. I`m looking forward to your questions and views.