The government will make it more difficult and riskier for companies to hire labor

On 18 January 2022, the government (by the Ministry of Labor and Social Inclusion) sent out a proposal for consultation on tightening the rules for the use of hiring from staffing companies. What does this mean for you as an employer? We summarize the main points.

1 Proposal to ban hire labor on construction sites in Oslo, Viken and formerly Vestfold

The government already announced in the Hurdal platform that it would limit the scope and role of the staffing industry. As part of this work, the Ministry of Labor and Social Inclusion is now proposing a ban on hire labor on construction sites in Oslo, Viken and the former Vestfold. The background for the proposal is that the use of hired workers in the construction industry has been high over time, and especially in the Oslo area.

In short, the ban will mean a regulatory provision that hiring from staffing companies for construction work on construction sites in Oslo, Viken and the former Vestfold will not be permitted. There are some exceptions:

• As the ban only proposes to apply to hiring from staffing companies, hiring workers from other production companies will still be allowed.
• The ban is limited to «building work» and will mainly apply to work related to the construction of buildings. Construction companies will still be able to hire other groups of employees for other types of work, such as engineers, administrative staff, etc.
• The ban will only apply to «construction sites», i.e., workplaces where temporary or changing building work is carried out. Construction work of a permanent nature will not be included, such as the production of elements for prefabricated houses.

In the event of a breach of the ban, the government proposes that the current provision in the Working Environment Act § 14-14 be applied, so that the hired employee can demand permanent employment with the staffing company as well as compensation. The government also proposes to give the Norwegian Labor Inspection Authority competence to supervise that the ban is complied with.

2 General tightening of the rules for hiring

The government proposes a number of other tightening in the general hiring regulations that apply to all industries throughout the country. The suggestions are to:

• Remove the right to hire from staffing companies for work of a temporary nature, which is typically used during production peaks and during seasonal work. For most companies, in practice it will then only be permitted to hire labor in real temporary positions, and if you are bound by certain collective agreements and have an agreement with the employee representatives.
• Give hired employees the right to permanent employment after having been hired for more than two years, instead of the current three / four years. In addition, the government proposes to expand the group that gets the right to permanent employment so that it will no longer depend on the basis on which the hiring takes place (i.e., temporary staff for others, agreement with employee representatives). Everyone who has been hired must have this right.
• Legislate the definition of hiring to clarify the boundary between hiring and contracting. The proposal entails the enactment of the factors that are to be relevant in such an overall assessment, and thus follows up the proposal from the majority in the Fougner committee.
• Introduce a new approval scheme for staffing companies where they not only have to register with the Norwegian Labor Inspection Authority, but also have to meet specific requirements in order to obtain status as an approved staffing company.

You will find the consultation proposal on the ban on construction sites and general tightening measures here (Norwegian only). The consultation deadline is 19 April 2022.

The government has also proposed reintroducing collective right to bring an action for trade unions. This means that the unions can take legal action in their own name in the event of illegal hiring. This right was revoked in 2015 and the matter has now been sent to the Parliament (Stortinget) for consideration. You can find our article about the proposal here.

3 What happens next?

If the proposals are implemented, they will be of great importance to employers throughout Norway, and especially in the construction industry in Oslo, Viken and the former Vestfold area. All companies that currently use a lot of hired labor will notice the changes if the government succeeds. The companies will have to make more thorough assessments of both needs, basis and duration when using hired labor, and will also risk lawsuits from the unions.

The staffing companies will probably both notice a decline in order intake at the same time as higher demands are placed on these companies.