Provisions of Collective Agreements

Collective agreements consist of mandatory as well as discretionary provisions. The starting point is that the mandatory provisions take priority over provisions in the contract of employment. If the contract of employment is less beneficial to the employee than the collective bargaining agreement, the collective agreement will be applied.

The most common provisions in the collective agreements are e.g. those related to salary. The agreement includes salary groups for different categories of employees, based on which the minimum salary is determined. In addition, the collective agreement provides for a general pay increase. Most collective agreements also set out provisions governing salary for time off due to illness, salary during maternity and family leave as well as provisions governing working hours, holiday payment and compensation.

Some collective agreements include a possibility to deviate from the collective agreement locally within the companies. This right is, however, not applicable to employers that are not members of an association and are subject to generally binding collective agreements.

Parties to the labour market have in recent years sought to shift the decision making in respect of employment conditions to the local level, i.e. to companies and work places. This has become possible through changes introduced to the Co-operation Act, the Working Hours Act and collective agreements. Possibilities to agreements at a local level have increased through greater delegation powers included in the collective agreements, particularly in respect of working hours. The benefits of agreements at a local level are flexibility and the possibility of adapting agreements to accommodate the needs of individual companies.