At the same time, this year's settlement is taking place in a world characterized by geopolitical unrest and economic uncertainty. On March 13, the Technical Calculation Committee (TBU) adjusted the estimated consumer price inflation to 3.2 %, which largely reflects the consequences of the war in the Middle East. The situation is leading to increased energy prices and expectations of higher price inflation around us. How inflation develops depends on how long and how extensive the war is. This makes this year's wage settlement extra challenging to navigate for all parties.
BUHR guides you here through the most important concepts and what you should know - whether your company has a collective agreement or not.
Who meets for salary negotiations – who are the parties to the salary settlement?
The main organisations LO and NHO are Norway's largest employee and employer organisations, respectively. Both LO and NHO have members in a number of different sectors and industries. LO organises employees in both the public and private sectors.
On the employer side, the central organizations are NHO, KS, Spekter and Virke – in addition to the state and the municipality of Oslo, which negotiate on their own behalf.
On the employee side, we find four major unions: LO, Unio, YS and Akademikerne – in addition to some independent organizations such as NITO and Lederne.
The front-line model – where the settlement begins
The front-line profession model is central and a pillar of Norwegian wage formation.
The frontline model implies that wage growth in competitive industries should function as a norm for wage growth in other parts of Norwegian working life, which must then be based on what competitive industries can tolerate. Wage growth in the frontline is affected by international price and productivity developments in Norwegian export products.
The wage negotiations are therefore carried out first in this competitive industry. In practice, this means that the Confederation of Norwegian Industries first negotiates with its counterpart, Norsk Industri, about the Industrial Agreement. The negotiation result in the frontline sector provides strong guidance for the settlements in the private and public sectors. The frontline sector should not be a ceiling or a floor for other collective bargaining areas, but a guiding norm.
The submission of demands and the start of negotiations was on 23 March, and the negotiation deadline was 26 March. At that time, a break in the negotiations was declared, and the Norwegian Confederation of Trade Unions sent a notice of termination for all its members covered by the Industrial Agreement. A notice of termination takes place in advance of a possible strike, and involves a collective termination of the employment contracts. This is necessary so that a legal industrial action (strike) can be initiated.
Businesses that are covered by the layoff notice can give a conditional layoff notice to employees. This means that the other, remaining employees in the business who cannot be employed in a "rational manner" during a possible strike are laid off. The deadline for notifying such a layoff is 14 days. In the case of layoffs that are a direct result of a strike, the wage obligation that normally occurs at the start of a layoff does not apply.
The mediation in the frontline trade union started after Easter, and the mediation deadline is April 11. If the parties do not reach an agreement, the employee side must give a notice stating specifically which employees will be taken out on strike. This specific notice is called a resignation, and only then will we know which businesses and who will be covered by a possible strike.
If there is no strike in the frontline trades, the settlement will continue with the start in the various collective bargaining areas throughout April.
Main settlement or intermediate settlement – and what is the difference?
In 2026, there will be a main settlement, also called a collective bargaining agreement. In a main settlement, both wages and other terms and conditions in the collective bargaining agreement are negotiated. There are normally main and intermediate settlements every other year, with the main settlement in even-numbered years. The parties then negotiate all the content of the collective bargaining agreements, for example wages, working hours, pensions, welfare leaves, overtime pay, provisions on work clothes and other things that can be changed.
In the interim settlements, only kroner and øre are negotiated, i.e. salary supplements.
LO's representative council decided in February that this year's settlement will be carried out federation-wide, which is the most common form of a main settlement. This means that NHO's national associations and other employer organizations negotiate directly with each individual federation about their respective collective agreements – as opposed to a coordinated settlement, where LO and NHO negotiate centrally across all agreements.
A new collective agreement can be established in 3 ways:
- The parties may reach an agreement during the negotiations. The result will be put to a final vote.
- If the parties do not reach an agreement during the negotiations, the parties are sent to mediation, where the Ombudsman may present one or more proposals for a solution. The proposal is first considered centrally by the parties, who decide whether they will recommend the proposal to the members. Then it goes to a vote.
- A voluntary or mandatory wage board may make decisions on the content of the collective agreement. Such a decision may not be subject to a vote.
Local negotiations – the final stage of the settlement
For companies subject to collective bargaining agreements, the wage settlement is not complete when the central negotiations have been concluded. In line with most collective bargaining agreements, local negotiations must also be carried out. These negotiations are conducted directly between the company's employer representative(s) and the elected representatives.
The local negotiations primarily concern wages, but they may also include local special agreements that adapt the collective agreement to the needs of the company, for example working time arrangements, shift allowances, on-call arrangements and travel time. In addition, the parties may locally regulate social arrangements and welfare benefits beyond the minimum provisions of the collective agreement.
The result should be based on a realistic assessment of the company's situation, and since 1990 the parties have agreed that salary supplements should be determined based on four key criteria: the company's finances, competitiveness, productivity and future prospects. Together, these criteria provide a picture of the company's earning capacity – that is, what the company can actually afford to provide.
Around two-thirds of the total wage growth in collective bargaining companies occurs locally, so this is an essential part of the process. The local negotiations are carried out without the right to strike.
What do you do with the salary settlement when the company does not have a collective agreement?
The Working Environment Act does not contain any provisions regarding wages other than that remuneration shall be paid for the work performed. Wages are therefore fundamentally a matter between the employer and the individual employee.
When there is no collective agreement, the company can administratively set and adjust wages. There is no requirement for formal negotiations on wages in principle. However, it is good practice to have a good dialogue about wages and conduct wage negotiations with employees.
Even if the company is not bound by a collective agreement, it still makes sense to monitor the wage settlement. The result indirectly creates expectations in the labor market – both among your employees and among the candidates you are competing to recruit.
Think about building a sustainable whole!
There are two main considerations that must be weighed against each other when considering salary adjustments: One is to safeguard the company's need to be an attractive and long-term employer. At the same time, it is important that salary determination and adjustment take place in a way that provides control over costs.
Here it may be wise to focus on:
- The employer branding effect. You need to be aware of whether your company's salary level and salary development are competitive in the market. Does the company have the ability to attract and retain the necessary expertise?
- Clear job and salary structure. Establish clear criteria for salary determination and adjustment. Develop a clear job architecture. What criteria apply to internal promotions, to higher levels or greater responsibilities. Make sure to manage expectations when it comes to salary adjustments. (These are also key elements of the Equal Pay Directive.)
- Salary is one part of the total package. Make the total salary, benefits and other working conditions that the company offers visible. How does the company present this? There can be great value in benefits and schemes that are not determined or paid in kroner and øre.
BUHR's recommendations for annual salary adjustments:
- Establish predictability by describing routines for salary determination (what should count and how) and for salary adjustments (frequency, timing, criteria, process, responsible parties).
- Consider the need to obtain market data and salary statistics, or use industry networks.
- Decide whether there should be general supplements with or without an element of individual adjustment in addition, or exclusively individual adjustment of salary. There are advantages and disadvantages to all three solutions, which must be seen in the context of the company's needs and financial framework.
- Consider the need for tools or system support to process salary adjustments (distribution and cost control) while also safeguarding privacy.
- Plan how individual salary discussions will be conducted and documentation of the results (salary letter).
We explain the process of a tariff negotiation.
In order to be able to demand negotiations, the collective agreement must be terminated within the agreed deadlines. It is usually the employee side that terminates the agreements. Most collective agreements expire in the second quarter of even-numbered years, and are negotiated in connection with their expiration. This means that collective agreement settlements (or collective agreement revisions) are often carried out in the period March–June. If a collective agreement is not terminated, it is automatically extended for another year.
Termination of the agreement is completely undramatic. It is only done to fulfill the legal requirement that the agreement must be terminated in order to demand negotiations for changes.
The negotiations begin with the submission of demands. Negotiations often take time, and require a lot of patience from the parties. Normally, the parties negotiate as long as there is hope of reaching a solution. If the parties determine that the gap between the employees' demands and the employers' offers is too great, one of the parties can break off the negotiations. Traditionally, it has been the employees' side that has broken off the negotiations. A break in the negotiations is followed by a dismissal. This is a prerequisite for initiating industrial action (strike).
A notice of termination is an important part of the formal preparations before industrial action can be initiated. A notice of termination is a collective termination of the members' employment contracts, and is a notice that the employees will go on strike from a specific date, at the earliest from the expiry of the collective agreement. Notice of termination must be given with at least 14 days' notice. This does not mean that all employees will necessarily go on strike.
The number of workers who go on strike will almost invariably be fewer than the number for whom the notice of dismissal was first given. The final notice of the strike is referred to as a notice of dismissal. The notice of dismissal limits the notice of dismissal and is given with four days' notice.
If the remaining employees can no longer be employed in a responsible manner during a strike, they may be laid off. In the case of layoffs that are a direct result of a strike, the wage obligation that normally occurs at the start of a layoff does not apply.
If the negotiations break down and the National Mediator receives notice of termination of employment, the National Mediator may, within two days, impose a ban on work stoppages. This means that no strike or lockout can be initiated before mediation has been completed. The ban means that the parties are obliged to carry out compulsory mediation after certain deadlines before a strike can be carried out.
Mediation means that the parties receive assistance from an independent third party, the Public Mediator, to resolve the dispute. The Public Mediator is a state mediation institution consisting of a Public Mediator and a mediation corps.
When the Ombudsman has imposed a ban on work stoppages, the parties are obliged to participate in mediation for at least 10 calendar days. If the parties have not found a solution within this period, either party may, after 10 days, demand that the mediation be terminated. The mediation shall be terminated no later than four days after such a demand has been made, and this deadline is absolute for the mediator. If the mediation is to be extended beyond midnight on the fourth day, which is mediation overtime, the parties must agree to this.
While mediation is in progress, neither party should comment on the disagreements being mediated or on the progress of the mediation. Only the mediator can do this. Confidentiality applies to everything that comes to light during mediation. This also applies after the mediation has ended.
If the parties do not reach an agreement after mediation, the mediator may submit his own proposal for a solution. This is called a mediation proposal, or the Ombudsman's sketch. This will be the mediator's last attempt, and the parties must decide. If the parties do not agree, a strike may be initiated.
If the parties agree, a vote on the mediation result is usually held among the members. This is called a preliminary vote. Only exceptionally are such proposals adopted over the table. If the mediation proposal is rejected, a strike can be initiated with four days' notice. Interim settlements are not submitted for a preliminary vote, but are adopted by the governing bodies of the respective main organizations.
A strike (industrial action) may not be initiated until the expiry date of the collective agreement has passed and the formal mediation deadlines have expired. A strike is normally initiated from the beginning of the working day the next morning. When mediation is carried out on overtime beyond the morning, the strike is normally initiated immediately (as soon as practicable), unless the parties agree on a specific time. During a strike, the union may give notice of escalation to some or all of the members covered by the layoff within the same period (four days).
During a strike, the parties are not required to mediate, but the parties may still jointly request mediation if they wish. The National Mediator and the mediator who has handled the dispute may also request that the mediation be resumed.
Both sides of the labor market have means of struggle to pressure the other side. The right to strike is a fundamental right for employees. The strike is the most effective means of struggle that employees have against their employers. The employers' strongest means of struggle is the right to lock employees out of the workplace. This is called a lockout.
If a strike has lasted for a month, the mediator is obliged to contact the parties again to try to find an opportunity to end the strike.
If the strike may threaten life and health or vital social interests, the Government may, by special law, decide that the dispute shall be resolved by a compulsory wage board. When the Act on a wage board has been formally adopted, the strikers are obliged to resume work. Work is usually resumed from the time the Government has announced that it will submit such a proposal. In the case of a compulsory wage board, collective bargaining is decided in committee proceedings, and apart from determining a wage supplement, rarely anything is changed that is not agreed upon by both parties to the collective bargaining agreement. The case cannot be brought before other bodies after it has been dealt with by a compulsory wage board.
The above review is based on provisions of the Labour Disputes Act, main agreement provisions and common practice in collective bargaining and wage settlements.
BUHR is your professional and strategic HR partner
Our competence center of experienced HR Business Partners and specialists has extensive experience with salary determination, salary adjustments and collective bargaining. We are ready to work closely with your company to develop both a comprehensive and clear salary structure, and tailor processes for salary adjustments. Our tools can help you keep control of costs and the distribution of salary funds internally.
Together we design the HR solutions of the future for your company!
A useful dictionary with simple explanations
– Words and expressions used in and about salary negotiations simply explained
Labor law
A special court whose main task is to decide disputes of interpretation and cases of illegal and collective bargaining actions. The Labour Court's judgments cannot normally be appealed. The court has seven members, three of whom are professional judges and four are appointed on the recommendation of LO and NHO, respectively.
Labor dispute
Disputes between a trade union and an employer or employers' association regarding collective agreements. A distinction is made between disputes of interest (disagreement about pay and working conditions) and legal disputes (disagreement about how a collective agreement/legal text should be understood).
Daytime action also called “Dagsing” or “Go slowly”
Authorization found in some collective agreements in the private sector to carry out "go slowly actions" if an agreement is not reached in local negotiations. This is a reduction in the pace of work with a proportional reduction in wages. The purpose is to force changes in a local wage agreement that has been terminated and expired.
The four key criteria
Since 1990, there has been agreement that the total salary supplements should be determined based on four criteria:
- company finances,
- competitiveness,
- productivity and
- future prospects.
These criteria – both individually and together – tell a lot about the company's earning capacity. The Industrial Agreement also includes a fifth criterion about the current labor situation. Over time, the four criteria have spread to most other collective bargaining areas in the private sector.
Lag
Expresses a so-called lower wage development for one group of employees compared to another group that has been chosen as the norm-setter. This is essentially a demand put forward by employee organizations as justification for a group of employees to have a proportionally larger share of a wage settlement.
Right to negotiate
The right to negotiate means the right that employees and the company have through their representatives and organizations to demand negotiations with the other party about wages and working conditions.
Peacekeeping duty
Statutory and/or contractual obligation to refrain from all forms of industrial action/action during the collective bargaining period. This means that such actions are both illegal and/or contrary to the collective bargaining agreement.
General addition
Wage supplements to everyone within a collective agreement, either in the form of a percentage increase in wage rates or as a krone supplement.
Average industrial worker salary
Measures used to define who is low-paid. The reports from the Technical Calculation Committee (TBU) use a definition that considers low-paid people as people with a salary below 85 percent of the average industrial worker salary in the LO-NHO tariff area.
Sliding
Slippage is the increase in actual wages paid between two wage settlements. Factors that affect wage slippage are: Wage supplements granted outside the central collective bargaining agreements (including local supplements and individual wage supplements), changes in age composition/seniority, resignations, new hires and organizational changes. Slippage is a topic in central negotiations, not local ones.
Index adjustment
Indexation is an agreement on automatic adjustment of wages based on, for example, price increases, usually based on a desire to maintain purchasing power.
Low wage supplement
Special supplement for groups of employees whose salary level is below a certain percentage of the average salary in a norm area.
Local negotiations
Wage negotiations between the parties at the individual company based on a collective agreement. Negotiations may concern wages or other matters related to the employment relationship. Any local wage supplements are in addition to general supplements.
Wage formation
The process by which wage levels and wage developments are determined through negotiations between employers and employees, often via their trade unions, within the framework set by both collective agreements and local conditions.
Salary profile
Expression for how the general supplement and other benefits are distributed among the employees. Within a given framework, it is up to the parties how the supplements are to be distributed in order to possibly achieve a special effect for certain groups of employees. The most common has been to talk about a low-wage profile. This means that those who are at the lowest level receive a relatively higher supplement than those who initially have a high salary. The simplest form of low-wage profile is to give the same amount of krone to everyone.
Overhang
Wage changes are often made in the middle of the year, not at the turn of the year. The term “overhang” describes the difference between the average wage for the entire calendar year and the wage level at the end of the year. This is used to indicate how large the annual wage growth from one year to the next would be, if no wage increase was given in the last year. The overhang becomes larger the later in the year a wage increase is given and the larger the increase. A large overhang means that the framework for the subsequent wage settlement becomes narrower. This is a topic in central negotiations, not in local ones.
Protocol
A protocol is a document that records the outcome of negotiations, regardless of whether an agreement has been reached or not. The protocol must be signed by all parties.
Frame
The financial framework of the collective bargaining agreement is the cost of all changes in connection with the collective bargaining agreement. In addition to general wage increases, this also includes other changes to the collective bargaining agreement, such as changes in working hours or similar, such as the cost of an extra day off.
Real wages and purchasing power (disposable income)
Real wages and purchasing power are two different ways of measuring the value of wages. Real wages only take into account the prices of goods and services, while purchasing power also takes into account taxes and fixed costs.
- Real wage is the salary adjusted for inflation. If prices have increased by more than the salary, you have received a lower real salary. If the salary has increased by more than prices, you have received a higher real salary.
- Purchasing power is your net income after taxes and your fixed expenses. Increased purchasing power means that there is more money left after taxes and fixed expenses to buy what you want.
National Wage Board
A permanent arbitration board appointed by the government under the Wage Board Act and the Service Disputes Act. The National Wage Board is most often used to end a conflict by having the Storting pass an Act on a mandatory wage board. The National Wage Board then handles disputes about what should be the content of a collective agreement. A ruling from the board has the same effect as a collective agreement. The National Wage Board can be used both as a voluntary wage board and as a mandatory wage board.
Coordinated settlements
Interim settlements can be carried out as coordinated settlements. This means that the main organizations LO and NHO negotiate all the agreements together (with the possibility of adjustment negotiations in the industry/union). In the public sector, negotiations are always coordinated.
Main settlements can also be coordinated. In the cases where coordination has been adopted for main settlements, important social reforms have often also been part of the settlement. When they are not coordinated, it is federal negotiations. Then the individual trade unions themselves set all the demands and negotiations are held for each individual collective bargaining area with the industry counterpart.
Central negotiations
Negotiations between the parties at a central level, i.e. main organizations on the employer and employee sides. Normally, it is only in central negotiations that a strike is a relevant option.
Strike fund/conflict fund/strike fund
A strike fund/conflict fund or strike fund is a fund or set aside funds by a trade union or employers' association to cover lost income for its own members during the strike period/lockout.
Collective agreement
A written agreement between a trade union and an employer or employers' association that regulates wages and working conditions.
- Main agreement
Collective agreement concluded between employer organisations and central organisations on the employer side. A collective agreement contains the basic rules of the game in working life, such as general provisions on negotiation and cooperation between employers and employees. In addition, the collective agreement addresses the employees' right to participation. The collective agreements regulate a number of matters that are not legally binding, but unlike the collective agreements, it does not address pay and other working conditions. It regulates a number of common issues of a general nature and therefore covers several collective areas, and it is included as Part I in the individual sector-specific collective agreements (collective agreements).
- Agreement
A type of collective agreement that applies to a specific industry or sector, and that contains detailed provisions regarding wages and working conditions.
- Horizontal collective agreements
Horizontal collective agreements are a term from the private sector, which is used to describe collective agreements that do not include both workers and white-collar workers. Often they apply to practitioners of a particular profession or trade and are made applicable to such employees in several enterprises. Also occurs in special agreements in the public sector.
- Vertical collective agreements
Vertical collective agreements are a term used to describe collective agreements that apply to all employees, both blue-collar workers and white-collar workers, in one or more enterprises.
Technical Calculation Committee (TBU)
The Technical Calculation Committee for the Income Settlements. A government committee, where the most important parties in the labor market are represented, that calculates price, wage levels and wage growth in various industries. The committee's task is to present thorough numerical background material before the settlement, to prevent disagreements between the parties about economic conditions and to provide the best possible common understanding of the Norwegian economy. The committee presents three reports each year with important figures for wage developments, economic development, etc. A preliminary report is normally issued in February, a final report in March (NOU) and a summary is issued after the settlements in June.
Tripartite cooperation and the "Norwegian model"«
In addition to the employers' and employees' organizations, the state is the third "party" in what is called tripartite cooperation. This involves the three parties – employers, employees and the state – coming to an agreement on the needs for and the design of new policies in a number of areas. This is a central component of the so-called Norwegian or Nordic model.
This model consists of three main components:
- the welfare state with its universal welfare benefits
- financial management with monetary policy and fiscal policy
- a organized work life with coordinated wage formation
The interaction between these components is the core of the model. The interaction has been crucial in ensuring high employment, small differences and a competitive business sector. The organization in the other Nordic countries has many common features, and many therefore call the model the Nordic model.
The principle of non-derogation
Provisions in the employment contract that conflict with a collective agreement to which the parties are bound are invalid. In practice, the principle of non-derogation means that the employer must apply the collective agreement also to unorganized workers when they perform work that is covered by the collective agreement.
Annual salary growth
Annual wage growth is a change in average annual wages from one calendar year to the next. Annual wage growth can result from wage overhang from the previous year, contributions from this year's collective wage increase and/or wage slippage throughout the year.
