New proposals strengthen the position of employees - this is how businesses should deal with the changes

The Ministry of Labour and Social Inclusion has proposed changes relating to the definition of employee in the Working Environment Act. Among other things, the government proposes that it now should be the business that must prove that the person  is not an employee if there is doubt or disagreement about this.

In Prop. 14 L (2022–2023) (Norwegian only), which was tabled in the Cabinet on 18 November 2022, the government has proposed a number of changes which are primarily intended to strengthen the position of employees. This will in several ways have significance for both employers and clients. The changes are a follow-up to the Fougner committee's report, NOU 2021:9 (Norwegian only), and come as a result of announced measures in the Hurdal platform to strengthen the position of employees.

Clearer employee definition

The government proposes to change the wording in the Working Environment Act's definition of employee to clarify what constitutes an employee within the meaning of the law. Today's wording states that anyone who "performs work in the service of others" is an employee. In the new proposal, this has been changed to "anyone who performs work for and subordinates to another". This has been done to clearly highlight that what particularly distinguishes an employee from an independent contractor is that the person in question is subject to management, control and leadership in the execution of the work.

In addition, it is emphasized that if the person in question makes his/her personal working capacity available on an ongoing basis, this suggests that the person is an employee. This means that the employee as a starting point cannot pay others to carry out the work tasks, and that the work must be of a fairly stable nature.

However, it is not intended to change the applicable law. The points mentioned above are just some of several points in a larger assessment of whether the person is to be considered an employee or not. These elements are often considered in contrast to a person being an independent contractor. The actual circumstances in the case are still decisive, but the term employee must be interpreted broadly so that the individual who needs protection also gets it.

The business must prove that the person is an independent contractor  

The government is also proposing a new rule that gives clients the burden of proof that the person is not an employee. Today, it is the employer's responsibility to choose the right form of affiliation based on the realities. With the new proposal, the starting point is that the person is to be considered an employee if nothing else is documented by the business. In such cases, high demands will be placed on the business being able to prove that the person is an independent contractor.  

The reason why the Fougner Committee originally proposed a similar rule of presumption was to reduce the number of misclassifications and possible circumvention of the regulations. With this proposal, the government hopes to give businesses an incentive to clarify employee status early on.  In addition, the government believes that the rule will be able to give those who are unsure whether they are an employee an opportunity to clarify their legal position before a court.

Platform workers can be granted employee status

The government assumes that more people will be given employee status as a result of the new rule, where businesses must bear the burden of proof. Among other things, digital platform workers will be able to get employee status as a result of the proposal. It will also be up to the platform companies to prove that the platform workers are not employees.

Businesses should consider this

For businesses, the proposed changes could mean that people who carry out work for them will more easily be classified as employees. If the businesses as part of the daily operation manage, control, and lead the person in question in the execution of the work, this suggests that the person is an employee. 

For businesses that use independent contractors, there will be reason to think through both the design of the contract and how the work is managed, controlled and lead in practice. The business should be aware of the extent to which it is decided, for example, when during the day or week the work is to be carried out, where and how the tasks are to be carried out. The business should be aware of the extent to which, for example, it is decided when in the day or week the work is to be carried out, as well as where and how the tasks are to be carried out.

It may therefore be a general piece of advice that businesses clarify early on whether the contract implies that the person is an employee or an independent contractor, and that what has been agreed between the parties is also observed in practice. In addition to matters relating to management, control and leadership, the following aspects will typically suggest that the person is an employee, and not an independent  contractor:

• the business provides workspace, machines, tools, work materials or other aids that are necessary for the execution of the work
• the work is of a fairly stable nature and can be terminated with specific deadlines
• the person concerned mainly works for one client and receives remuneration in one form or another