Norway: Collective Bargaining Provisions have become part of the Employee’s Individual Salary Conditions

In 1998, 10 nurses at a private nursing home had received a fixed wage supplement, pursuant to the applicable collective bargaining agreement at the time. The nursing home later joined a new employers’ association in 2014. Thus, a new collective agreement became applicable to the same employees. The new collective agreement did not contain any clause on the disputed wage supplement.

The employees filed a lawsuit against the employer, claiming that the collectively agreed wage increase had become part of their individual employment contracts. The claim was based on a controversial court-created rule on so-called “individual after-effects”.

The Norwegian Supreme Court concluded that the wage supplement was a normative collective provision that had become part of the individual nurse’s specific employment contract. Therefore, it did not lapse simply because of the termination of the original collective agreement. The supplement could also not be removed unilaterally by the employer, based on managerial prerogative alone.

The Supreme Court annulled the Court of Appeal’s decision as a result of an incorrect application of the law and referred the case to new proceedings in the Court of Appeal.

The question of whether the supplement was in conflict with the current collective agreement, cf. the Labour Disputes Act § 6, was not the subject of consideration by the Supreme Court. The Supreme Court’s ruling, therefore, is unlikely to be the final word on the matter.

Key Action Points for Human Resources and In-house Counsel 

Employers in Norway should be mindful that individual wage terms resulting from collective bargaining agreements may in some cases, become part of the employees’ individual employment contracts, even if the collective agreement ceases to apply. In such cases, the general rules on changes to the employment contract will govern.