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New rules restrict the use of temporary employees

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Legal news
calendar 19 December 2021
globus Norway

It can be difficult to find a job following a period of unemployment or after graduation. In an attempt to address this, companies can employ employees temporarily without needing any particular justification for doing so. Now, the Norwegian government is proposing to remove this access to strengthen employees' right to permanent employment and at the same time facilitate a more stable and organized employment relationship.

Since 2015, the main rule has been that companies can employ employees temporarily for up to one year without any specific reason. That means that companies do not need to justify why an employee is only hired temporarily, such as a reference to a permanent employee being on leave or a specific, time-limited project.

The new Norwegian government has now decided to introduce several changes to the Norwegian Working Environment Act. One of these changes includes removing the general right to use temporary employment.

Temporary employment has always been the exception

Permanent employment is the main rule when hiring, which is what the Norwegian government also wants the new rules to reflect. Temporary employment causes insecurity for those temporarily employed as well as increased inequality in the labour market. Temporary employment should therefore only be used as the exception, when a special need arises.

Temporary employment was, among other things, introduced to create a gateway for permanent employment to vulnerable groups that showed difficulties with respect to entering working life. At the same time, the right was supposed to increase the flexibility for companies. In response to the government’s proposal to introduce the new rules, the employers' organizations therefore also maintained the same considerations as before, emphasizing that the use of temporary employment can be crucial for companies in the start-up phase.

However, the reality is that companies rarely use temporary employment in practice. This is both because that type of employment is complicated to use and also because companies have not had the need to use it. It has also been shown that it was limited how many temporarily employed actually subsequently got a permanent position in the company, which the government has also emphasized.

IUNO’s opinion

Even though the government wants to remove companies' access to use temporary employment, temporary employment will remain a possibility when there is a special reason. Companies will therefore still be able to hire employees temporarily for internships, as temporary replacements for other employees, or to participate in time-limited projects. If adopted, the new rules will not have a retroactive effect on existing agreements.

Removing the general right to temporary employment can make it risky for companies to hire employees who have large gaps between their employments and who have no real work experience. However, as an alternative option, companies have the opportunity to agree on a trial period of up to six months. IUNO recommends that companies actively follow up on employees during the trial period. The threshold for a justified termination is lower during the trial period, but the company must always have a justified reason.

The Norwegian government has also announced several other important changes to Norwegian working life, including changes to the rules on mandatory occupational pension schemes and part-time work. IUNO follows these developments closely

[Proposition L 35 of 3 December 2021 to change the Norwegian Working Environment Act]

Since 2015, the main rule has been that companies can employ employees temporarily for up to one year without any specific reason. That means that companies do not need to justify why an employee is only hired temporarily, such as a reference to a permanent employee being on leave or a specific, time-limited project.

The new Norwegian government has now decided to introduce several changes to the Norwegian Working Environment Act. One of these changes includes removing the general right to use temporary employment.

Temporary employment has always been the exception

Permanent employment is the main rule when hiring, which is what the Norwegian government also wants the new rules to reflect. Temporary employment causes insecurity for those temporarily employed as well as increased inequality in the labour market. Temporary employment should therefore only be used as the exception, when a special need arises.

Temporary employment was, among other things, introduced to create a gateway for permanent employment to vulnerable groups that showed difficulties with respect to entering working life. At the same time, the right was supposed to increase the flexibility for companies. In response to the government’s proposal to introduce the new rules, the employers' organizations therefore also maintained the same considerations as before, emphasizing that the use of temporary employment can be crucial for companies in the start-up phase.

However, the reality is that companies rarely use temporary employment in practice. This is both because that type of employment is complicated to use and also because companies have not had the need to use it. It has also been shown that it was limited how many temporarily employed actually subsequently got a permanent position in the company, which the government has also emphasized.

IUNO’s opinion

Even though the government wants to remove companies' access to use temporary employment, temporary employment will remain a possibility when there is a special reason. Companies will therefore still be able to hire employees temporarily for internships, as temporary replacements for other employees, or to participate in time-limited projects. If adopted, the new rules will not have a retroactive effect on existing agreements.

Removing the general right to temporary employment can make it risky for companies to hire employees who have large gaps between their employments and who have no real work experience. However, as an alternative option, companies have the opportunity to agree on a trial period of up to six months. IUNO recommends that companies actively follow up on employees during the trial period. The threshold for a justified termination is lower during the trial period, but the company must always have a justified reason.

The Norwegian government has also announced several other important changes to Norwegian working life, including changes to the rules on mandatory occupational pension schemes and part-time work. IUNO follows these developments closely

[Proposition L 35 of 3 December 2021 to change the Norwegian Working Environment Act]

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Anders

Etgen Reitz

Partner

Sofie

Aurora Braut Bache

Senior associate

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