Industrial Change, Posting and Shifting Employer Strategies

Studying the case of the Norwegian ship-building industry, this paper shows how employers shift their hiring strategies in response to changes in the legal framework. In the awake of the EU east enlargement, the booming Norwegian economy caused labour shortage in the competitively exposed ship-building industry. In response, the industry started to recruit Eastern European labour, who were often payed wages below those of Norwegian employees. Many of these Eastern European workers were posted to Norway, to circumvent transitional arrangements and collective agreements. In response, state authorities made a legal extension of the collective agreement for the industry, and this extension made it more expensive to have workers posted to Norway than workers living close to the ship yard. The paper shows that employers pursued different strategies following the legal extension. First they challenged the decision to extend the agreement both politically and via litigation. When both strategies failed, they shifted the recruitment strategies from using posted workers to requesting Eastern European workers to move/commute to Norway in order get a job. The case illustrates how the status of the employees is a result of a strategic response of employers to changing institutional settings. For these workers, the shift of employment status does not necessarily mean any change of their working situation, and the shift is not based on in which country their company conducts work, but on the strategies of the main contractor in light of the legal framework.