Employment law postcard from Littler
The holiday mood is starting to set in, but have you really caught up on what's been happening in the world of work over the past six months? And are you ready for what's on the other side of summer? Curl up on your sun lounger and enjoy our half-year update from the world of work.
What has happened in the first half of the year?
During the first half of 2023, the Supreme Court handed down one judgment in the area of employment law. The case concerned two tourism companies that had deducted tips given by guests to employees to cover the costs of employer's national insurance contributions and administration. The employees believed that the employers were not allowed to do this. The Supreme Court agreed and ruled that the tip was a financial gift from the guests that should be paid in full to the employees. The right to manage did not provide a basis for making deductions, even though the tip incurred costs for the employers in the form of both employer's national insurance contributions and administrative resources. According to the result of the judgment, the tips from the many outdoor restaurants during the summer must therefore be paid in full - unless the employer has provided employment contracts that expressly allow for deductions.
If you are going on vacation in Norway this summer, you can also assume that the service personnel you meet are probably not hired from a temporary agency. Following a high level of activity on the legislative side, major restrictions on the ability to hire labor have been adopted, and several of the rule changes came into force during the first half of the year. One of the most important changes is that employers can no longer hire from temporary employment agencies on the grounds that the work is of a temporary nature - such as seasonal work. After a few months of transitional rules, the new rules will apply in full from July 1.
However, several exceptions have also been adopted to the prohibition against hiring for work of a temporary nature. The most important of these concern workers with specialist skills and work in the health sector. It has also been decided that the new rule will not enter into force for the event industry for the time being. Just before the summer, the government also issued a consultation proposal for a permanent exemption for this industry. The exemption will apply to employees who perform rigging and stage technical work at short-term and one-off events. If the proposal is adopted, it will still be permitted to employ this group of workers on the grounds that the work is of a temporary nature. This also bodes well for next year's festival summer.
Despite these exceptions, the government's many restrictions on access to hiring have been attacked from several quarters. The rules are now being investigated by the ESA, which will determine whether the restrictions go too far and may therefore be in breach of EEA law. Recently, a number of temporary employment agencies also filed a petition for a temporary injunction, claiming that the restrictions are invalid because they violate EEA law, which takes precedence over other rules. Oslo District Court ruled in the first round that the new hiring rules are permitted under EEA law and therefore apply in full. However, the last word in the case has hardly been said...
What awaits on the other side of the summer?
In addition to the dispute over employment restrictions likely to continue in full swing, there are also several other employment law cases waiting after the summer. As early as mid-August, the Supreme Court will overturn a judgment from the Hålogaland Court of Appeal on the requirement for subsequent enrolment in a pension scheme. The case raises fundamental questions about the relationship between pension and limitation rules. In October, another case will be heard on a recurring theme: the concept of working hours. This time it concerns the offshore industry and whether so-called availability days are to be regarded as working time.
On the regulatory front, it seems that the changes will continue at the same pace as before. In the Council of Ministers on June 16, the government adopted a bill that will implement the EU Directive on transparent and predictable working conditions in Norwegian law. It is not yet clear when the bill will be debated in the Norwegian Parliament, but we assume that it could happen during the fall. One of the most important aspects of the bill is new and stricter requirements for the content of the written employment contract. For employers, this means that the templates for employment contracts should be reviewed to ensure that they are updated when the new legislation comes into force. If the agreements are unclear, so-called presumption rules have also been proposed to determine what should apply. Ultimately, these rules could mean that an employee is considered to have a permanent instead of a temporary position - or a higher FTE percentage - because the wording in the employment contract is unclear.
Another important legislative amendment, which has already been adopted, is the rules on employer liability in groups. These have been processed by the Norwegian Parliament and will enter into force from January 1, 2024. The rules mean that the obligation to offer other suitable work in the event of dismissal due to restructuring or downsizing applies not only to the individual company, but to the entire group. The same applies to the preferential right to new employment. The new rules require employers to keep track of labor needs at group level in a different way than before and ensure information flow and coordination between different units. For employers in groups, it may therefore be wise to spend some of the next six months establishing practical arrangements and good routines for how the extended employer responsibility will be handled.
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As we head into vacation mode, we wish everyone a long and sunny summer. And should any employment law challenges arise between mountain hikes and waves, you can always get in touch with us at Littler.
