Norway: 2023, Looking ahead

In 2023, Looking ahead, we explore the most important trends and developments related to labour and employment law in Norway.

Norway: Restrictions to hiring from temporary-work agencies, and amendments and proposed bills to strengthen employees’ rights   

1. Restrictions to hiring from temporary-work agencies 

The main rule under Norwegian law is that hiring from temporary-work agencies is permitted to essentially the same extent as temporary employment. In December 2022, the Norwegian Government decided to restrict employers’ possibility to hire from temporary-work agencies. Additionally, hired workers’ rights have been strengthened. The new rules will enter into force on 1 April 2023. The changes entail as follows:

• Employers will be stripped of the option to hire from staffing agencies based on the temporary character of the job.. This means that employers can only hire workers as temporary replacements for another person or persons. However, the Ministry is permitted to adopt special rules on time-limited hiring of health personnel, in addition to advisers and consultants with specialist expertise.
• The right to permanent employment is strengthened. Hired employees who have been continuously temporarily employed for more than three years will  now be entitled to permanent employment at the hirer, irrespective of the legal basis for permanent employment.  Under the current rules, the right to permanent employment occurs after three or four years, depending on the basis for hiring.
• The difference between hiring from staffing agencies and outsourcing is clarified. Whether an employee is hired from a staffing agency or works for an employer who has outsourced the employee, is decisive for the application of the  the Norwegian Working Environment Act and its regulations on  hiring. The amendment will prevent hiring from being misclassified as outsourcing.
• A ban on hiring from staffing agencies to construction sites in some parts of Norway has been implemented.

For already concluded agreements, many of the changes will not take effect until 1 July 2023.

2. New rules: Strengthened protection for posted workers in Norway   

As of 1 January 2023, posted workers who are in Norway for more than twelve months are covered by the vast majority of the Norwegian employment law rules. The Norwegian Government adopted amendments to the regulations concerning posted workers  aiming to secure all workers in Norway the same wages and working conditions. The adopted changes implement EU’s Directive 2018/957 concerning amendments to the posting of workers.

3. Collective right to institute legal proceedings for trade unions

Trade unions right to collectively institute legal proceedings in the event of illegal hire from temporary-work agencies have been reintroduced. The trade unions can institute legal proceedings irrespective of the (un)willingness of the employees involved.

4. The main rule: Employees shall be employed on a full-time basis

On 1 January 2023, a new rule strengthening employees’ right to full-time employment entered into force. The main rule is that employees shall be employed on a full-time basis. Before employing for a part-time position, the employer must document the need for part-time employment. The documentation shall be accessible to the employees’ elected representatives, and the matter of part-time employment shall be discussed with the employees’ elected representatives.

Additionally, part-time employees’ preferential right to an extended post rather than the employer creating a new appointment, is now extended to apply accordingly in case of hiring of labour in the undertaking. Furthermore, part-time employees now have a preferential right to extra shifts.

5. Proposed bill: Clarification of the definition of employee

In November 2022, the government proposed clarification of the Working Environment Act’s definition of an employee. The amendment will clarify and make it more accessible to assess whether a worker is defined as an independent contractor or an employee. The distinction between an independent contractor and an employee is of particular importance since the Working Environment Act is mandatory for employees and may not be deviated to the detriment of the employee unless this is expressly stated.

Potentially to be passed by legislature in 2023 or 2024.

6. Proposed bill: Expansion of the employer’s responsibility in a group 

The current general rule is that the individual company in a group is the employee’s employer and that only this company is responsible for compliance with the Working Environment Act. In November 2022, the government proposed several extensions of the employer’s responsibility in a group.

Under the current rule, dismissal due to downsizing is not objectively justified if the employer has other suitable work in the undertaking to offer the employee. The obligation to offer other suitable work is aimed at the employer and will as a general rule be limited to the legal entity in which the employee is employed. The government proposes to extend the obligation to offer other suitable work to the entire group, not just the company in which the employee is employed. The same changes are made to  to the preferential right to a new appointment.

Additionally, the government has proposed rules for the establishment of frameworks, cooperation, information, and discussion between the group and the employees, if the group has more than 50 employees. This will strengthen the opportunity to collect information and participation before decisions are made.

Potentially to be passed by legislature in 2023 or 2024.

7. Proposed bill: More companies must establish working environment committees and safety representatives

The obligation to establish a working environment committee currently rests with businesses of 50 employees or more. Lowering this to 30 employees is now suggested in a current proposal.  Furthermore, a working environment committee can be required in a company with 10 or more employees.

Additionally, the government has proposed that undertakings with five employees or more must elect safety representatives. Under the current rule, undertakings with less than ten employees may agree that the undertaking shall not have a safety representative.

Potentially to be passed by legislature in 2023 or 2024.

8. Proposed bill: Right to permanent employment after three years 

Employees who have been continuously temporarily employed for more than three or four years (dependent on the basis of the temporary employment), shall be deemed to be permanently employed under current legislation. The government has proposed  to  set this limitation to three years, regardless of the basis on which the temporary employment is based.

Potentially to be passed by legislature in 2023 or 2024.

9. Proposed bill: Requirements for annual discussion for all forms of staffing other than permanent full-time employment 

The government proposes to establish one common  obligation to consult  the use of part-time employment, temporary employment, and hired workers with the employees’ elected representatives. Additionally, the use of independent contractors and the purchase of services from other companies which may impact the staffing situation shall be covered by the obligation to consult. Consequently, all other forms of staffing than permanent employment shall be a matter of consultation each year.

Furthermore, the obligation to consult shall also apply when one of the parties demands so. This might be appropriate in larger companies, where the use of part-time or alternative forms of employment is extensive.

Potentially to be passed by legislature in 2023 or 2024.

10. Proposed bill: Safer and more predicable working conditions

Furthermore, a proposal has been submitted for , amongst other things, extended requirements to the written employment agreement, changes to the duration of the probationary period and stricter and clearer requirements for advance notice of working hours.

11. Key action points 

Key action points for human resources and in-house counsel can be summarized in three bullet points:

• The restrictions on hiring workers from temporary-work agencies will in particular affect staffing agencies and employers that hire workers from staffing agencies. These might have to obtain labour force by other means than by hiring. Consequently, employers are now referred to enter direct permanent or temporary employment with the employee, make use of subcontracts and independent contractors, or enter into special agreements with trade unions on hiring from staffing agencies where possible.
• Employers who outsource should assess whether this in fact may be viewed as hiring from temporary-work agencies. In that case, the workers are covered by several rules in the Working Environment Act, including the right to equal treatment regarding pay and working conditions.
• The proposed bill regarding the expansion of the employer’s responsibility in a group requires an overview of available positions in the entire group. Employers who are part of a group should establish a system that covers all companies in the group, and must be able to present documentation that shows that sufficient assessments have been carried out.