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New proposal restrict the use temporary agency workers

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calendar 27 february 2022
globus Norway

Temporary agency workers can present practical solutions for companies with a temporary or industry-specific need. Now, the Norwegian government is proposing to significantly limit companies’ access to this possibility. If adopted, the proposed rules will mean that companies only will be able to use temporary agency workers via agencies as fixed term replacements for an employee.

To reflect that permanent employment is intended as the clear main rule on the Norwegian labour market, the Norwegian government is proposing to restrict the use of temporary agency workers via agencies. The proposal namely intends to introduce the following changes:

  • Removal of the right to hire temporary agency workers via agencies for work of a temporary nature
  • Better rights for temporary agency workers (e.g., shorter timeframe for when permanent employment becomes a right)
  • An approval scheme to remove unserious temporary work agencies.

We are taking a closer look at each change in the following:

Removing the right for agency workers to complete work of temporary nature

Today, companies can use temporary agency workers to complete work of a temporary nature, but also as temporary replacements for another employee, as trainees, under certain labour market schemes or athletes. In practice, temporary agency workers are mostly used for work of a temporary nature, such as fixed term projects and as a temporary replacement for another employee, such as for employees on parental leave.

If the right to make use of temporary work agencies for work of a temporary nature is removed, companies are in practice only left with the right to make use of temporary work agencies when this is as a replacement for someone else.

Easier right to permanent employment for agency workers

Currently, temporary agency workers are entitled to permanent employment with the user company after a certain number of years, depending on why a temporary work agency has been used. When used for work of a temporary nature, this is an entitlement after four years. When used as temporary replacements for another, this is an entitlement after just three years.

Seeing that access to using agency workers for work of temporary nature is being removed, the government is now proposing to shorten this period to three years, regardless of the purpose of the work.

New approval scheme to improve working conditions

Today, temporary work agencies must register with the Norwegian Labour Inspection Authority to operate lawfully. To register, certain requirements must be met which do not depend on qualifications. Contrary to Sweden and Denmark, agencies in Norway have no possibility to receive any general form of license or approval with regards to the quality.

In light of the significant increase of foreign temporary agency workers, who are more vulnerable to work-related crimes, the government has seen a need for an approval scheme. Proposed requirements include, among other things, documentation that the agency has fulfilled requirements with regards to EHS, written employment contracts, safety inspectors and occupational injury insurance.

IUNO’s opinion

If the proposal is adopted, many companies will lose a significant part of their labour force. For some companies, it will make sense to expand their permanent workforce as an alternative to using temporary agency workers. For other companies, however, especially smaller start-up companies with limited funds, this is not an option.

As an alternative, IUNO recommends that companies make use of temporary employment. Although changes have been proposed for the use of temporary employees as well, there is currently no proposal to remove the right of temporary employment for work of a temporary nature. We have previously written about the proposed changes for temporary employment here.

[The Ministry of Labour and Social Inclusion’s consultation note 22/272 of 19 January 2022]

To reflect that permanent employment is intended as the clear main rule on the Norwegian labour market, the Norwegian government is proposing to restrict the use of temporary agency workers via agencies. The proposal namely intends to introduce the following changes:

  • Removal of the right to hire temporary agency workers via agencies for work of a temporary nature
  • Better rights for temporary agency workers (e.g., shorter timeframe for when permanent employment becomes a right)
  • An approval scheme to remove unserious temporary work agencies.

We are taking a closer look at each change in the following:

Removing the right for agency workers to complete work of temporary nature

Today, companies can use temporary agency workers to complete work of a temporary nature, but also as temporary replacements for another employee, as trainees, under certain labour market schemes or athletes. In practice, temporary agency workers are mostly used for work of a temporary nature, such as fixed term projects and as a temporary replacement for another employee, such as for employees on parental leave.

If the right to make use of temporary work agencies for work of a temporary nature is removed, companies are in practice only left with the right to make use of temporary work agencies when this is as a replacement for someone else.

Easier right to permanent employment for agency workers

Currently, temporary agency workers are entitled to permanent employment with the user company after a certain number of years, depending on why a temporary work agency has been used. When used for work of a temporary nature, this is an entitlement after four years. When used as temporary replacements for another, this is an entitlement after just three years.

Seeing that access to using agency workers for work of temporary nature is being removed, the government is now proposing to shorten this period to three years, regardless of the purpose of the work.

New approval scheme to improve working conditions

Today, temporary work agencies must register with the Norwegian Labour Inspection Authority to operate lawfully. To register, certain requirements must be met which do not depend on qualifications. Contrary to Sweden and Denmark, agencies in Norway have no possibility to receive any general form of license or approval with regards to the quality.

In light of the significant increase of foreign temporary agency workers, who are more vulnerable to work-related crimes, the government has seen a need for an approval scheme. Proposed requirements include, among other things, documentation that the agency has fulfilled requirements with regards to EHS, written employment contracts, safety inspectors and occupational injury insurance.

IUNO’s opinion

If the proposal is adopted, many companies will lose a significant part of their labour force. For some companies, it will make sense to expand their permanent workforce as an alternative to using temporary agency workers. For other companies, however, especially smaller start-up companies with limited funds, this is not an option.

As an alternative, IUNO recommends that companies make use of temporary employment. Although changes have been proposed for the use of temporary employees as well, there is currently no proposal to remove the right of temporary employment for work of a temporary nature. We have previously written about the proposed changes for temporary employment here.

[The Ministry of Labour and Social Inclusion’s consultation note 22/272 of 19 January 2022]

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