Proposal to ban hired labour on construction sites
Tightening of hiring rules
On 18 January 2022, the Ministry of Labour and Social Inclusion sent out a proposal for consultation on tightening the rules on hiring from staffing companies. The consultation deadline is 19 April 2022.
This article provides an overview of the potential changes that will impact employers.
Proposal to ban hired labor on construction sites
The government already announced on the Hurdal platform that it would limit the scope and role of the staffing industry. As part of this work, the Ministry of Labour and Social Inclusion has proposed a ban on hired labour on construction sites in Oslo, Viken and the former county of Vestfold (now Vestfold og Telemark). The proposed regulatory provision was motivated by the high rates of overtime that hired workers in the construction industry have been facing, particularly in Oslo. However, the following exceptions apply to the ban:
- It will only apply to hiring from staffing companies; hiring workers from other production companies will still be allowed.
- It is limited to work relating to the construction of buildings. Construction companies will still be able to hire other types of employees, such as engineers and administrative staff.
- It will only apply to construction sites (ie, 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, the government proposed that the current provision in section 14-14 of the Working Environment Act be applied so that hired employees can demand permanent employment with the staffing company, as well as compensation. The government also proposes to empower the Norwegian Labour Inspection Authority to ensure compliance with the ban.
The government has proposed several other ways to tighten general hiring regulations that apply to all industries in Norway:
- removing the right to hire from staffing companies for work of a temporary nature, which is typically used during production peaks and during seasonal work – most companies will be able to hire labour only for temporary positions and where there are certain collective agreements and agreements with employee representatives;
- giving hired employees the right to permanent employment after having been hired for more than two years, instead of the current three-to-four year requirement – the government also proposed to expand the types of workers that have the right to permanent employment so that it will no longer depend on the nature of the hiring contract (eg, temporary staff and employee representative agreements). All hired workers must have this right;
- legislating the definition of "hiring" to clarify the boundary between hiring and contracting – the proposal entailed the enactment of factors that should be considered in such an overall assessment, and thus follows up the proposal from the majority in the Fougner committee; and
- introducing a new approval scheme for staffing companies where they not only have to register with the Norwegian Labour Inspection Authority, but also have to meet specific requirements in order to obtain approved staffing company status.
The government has also proposed reintroducing the 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 consultation deadline for reintroduction expired in December 2021 (for further details, please see "Government set to reintroduce collective right to bring actions").
If the proposals are implemented, they will redefine the current hiring parameters for employers in Norway, especially those in the construction industry in Oslo, Viken and Vestfold. Companies will have to make more thorough assessments of the needs, basis and duration for using hired labour, and will also risk lawsuits from trade unions.
On the other side, staffing companies will likely notice a decline in order intake alongside increasingly demanding market conditions.
For further information on this topic please contact Ole Kristian Olsby or Lise Gran at Homble Olsby | Littler by telephone (+47 23 89 75 70) or email ([email protected] or [email protected]). The Homble Olsby | Littler website can be accessed at www.homble-olsby.no.