The Creation of Non-Standard Employment: The Case of Norwegian Air Shuttle, a Multinational Embedded in a Coordinated Market Economy

Friday, 3 July 2015: 4:00 PM-5:30 PM
TW2.3.01 (Tower Two)
Eli Moen, BI Norwegian Business School, Oslo, Norway
The creation of non-standard employment: the case of Norwegian Air Shuttle, a multinational embedded in a coordinated market economy

Key words: non-standard employment, employment relations, institutions

Literature is increasingly discussing the enduring change within the European labour market: the rise of ‘new outsiders’, new cheap labour. Predominantly this change is linked with the increasing use of non-standard employment, i.e. part-time jobs and temporary agency work implying low pay, low benefits and low protection. Non-standard employment now come close to one quarter of employment in nearly all OECD countries as there is a common decline in employment relations institutions across countries (Wilkinson et al. 2014).

Yet, there are big differences across countries in the degree and conditions for non-standard employment. For the past decades, there has been a worsening of the terms and conditions of employment in liberal market economies. But with rising non-standard employment also in the coordinated market economies of Northern and continental Europe, characterized by strong trade unions and strong labour market protections, there is a need for the study of diversity and details of actual practice of firm-level work and employment relations.   

This paper will contribute to this stream of research with a case study of a multinational, a low-cost carrier, located in a coordinated economy. One objective is to explore how the company operating in a multitude of institutional settings has reconstructed its employment system. The paper will discuss how the internationalization of its labour market has instigated the construction of a ‘mix and match’ policy in which terms and conditions vary across workplaces. This ‘mix and match’ approach reflects the company’s adaption to strong trade unions and strong labour protection in its home country, and to less regulated labour markets in countries in which it has established subsidiaries and operational bases.

The enactment of new employment relations has resulted in the institutionalization of an employment system comprising indirect, non-standard employment, and ‘self-employed’ flying personnel. The paper will discuss how this type of institutionalization contribute to construct and reproduce structures of inequality across nations as well as between social groups at the national level as well as the growth of in-work poverty. It will also discuss how the company by creating and exploiting a global labour market, as a type of institutional avoidance, represents a mechanism for weakening home-country labour market institutions and the influence of trade unions. Incremental change as result of changed employment practices and policies can have the potential to destabilize national institutional frameworks.

The case study corroborates recent findings that not only peripheral, but also core workers are exposed to the transformation of work. The paper also supports recent research pointing out that unionized work force is more exposed to the growing pressures of competition than previous research has argued (Holst 2014). To conclude, the paper will point out that the potential weakening of home-country unionized work is not the result of unlawful action, but the result of employer’s legal use of indirect and non-standard employment. However, this practice is the outcome of political reforms - the liberalization of the national Working Environment Act - at the turn of the millennium. 

Theoretically, the paper draws on both the perspectives of varieties of capitalism, national business systems, and the literature of employment relations, i.e. the case analysis links the specific employment practices the company reconstructs to its strategic priorities and to its specific institutional contexts. As the paper deals with changes in firm-level work and employment relations, we need a less rigid conception of institutions—one that allows for greater degrees of change resulting from the changed preferences and power of key actors. There are many different variants in the definition of institutions and the role of individuals, but since the study investigates in what ways internationalization affects the change of the airline’s employment system, we need a definition which is open to reinterpretation and which allows a loose coupling between institutions and actors’ behaviour. In keeping with recent trends in institutional approaches, the paper makes use of an actor-centric approach implying a richer concept of the actor that allows taking into consideration change resulting from changed preferences. This means recognizing the capacity of actors to influence and enact institutions (cf. Morgan and Hauptmeier 2014).


Wilkinson, A., G. Wood, and R. Deeg (eds.) The Oxford Handbook of Employment Relations: Comparative Employment Systems, Oxford: Oxford University press.

Holst, H. (2014), ‘Commodifying institutions’: vertical disintegration and institutional change in German labour relations, Work, employment and society 2014, Vol. 28(1) 3–20.

Morgan, G. and M. Hauptmaier (2014), ‘Varieties of Institutional Theory in Comparative Employment Relations’, in Wilkinson et al.