Norway: Temporary agency work and collective bargaining in the EU

  • Observatory: EurWORK
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  • Published on: 18 Dezember 2008



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The level of temporary agency work has increased in Norway over the last few years, in particular since 2004 and onwards. The TWA sector has also changed considerably over the last 4-8 years, among others due to the increasing importance of agency workers from the new EU-member states, and with the abolishment of the strict occupational restrictions on temporary agency work in 2000. There has been a strong growth in TWA in sectors such as construction, manufacturing and health/social security. An important issue today is how to prevent substandard wage- and working conditions for employees from the new 2004 EU-member states.

Section 1. Definitions

1) In your country, is there a statutory definition of:

a) temporary agency work?

The definition is given in the Labour Marked Act (Lov om arbeidsmarkedstjenester, arbeidsmarkedsloven, no English translation available). Here the following definition is given (§25), our translation:

”The hiring out of employees refers to the hiring of employees from one employer (hire company) to a commissioning company (hirer), where the hired employees are subject to the management of the hiring company”

Meeting this definition is conditioned upon the employee being in an employment relationship with the hire company. It is further conditioned upon the employee receiving wage and remuneration for his/her work from the hire company and not from the hirer. Moreover, it also presupposes that the hirer manages and controls the work of the hired person in the same way as it does in relation to the ordinary employees of the company. The hiring out of the employees pertains solely to the hiring out of ordinary employees (not self-employed).

Hiring out of labour – as defined above - might take place from undertakings whose object is to hire out labour (temporary work agencies) as well as from other undertakings.

“Temporary agency work (“hiring of employees from undertakings whose object is to hire out labour…”) is mainly regulated in the Act relating to working environment, working hours and employment protection, etc. (Working Environment Act), Section 14-12.

The hiring out of labour from”undertakings other than those whose object is to hire out labour” is also regulated though the Working Environment Act. “Hiring out must take place within the main areas of activity of the hire company and no more than 50 percent of the permanent employees in the hire company must be engaged in hiring activity”. In addition only employees with a permanent employment contract might be hired out (Working Environment Act, Section 14-13). We assume that such activity will fall outside what is understood with temporary agency work in this questionnaire.

b) agency worker?

See above (1a). Here we restrict this to an employee that is hired out from an undertaking whose object is to hire out labour.

c) user enterprise?

The company that is hiring employees from undertakings whose object is to hire out labour.

2) Is there a collectively agreed definition of:

a) temporary agency work?

No

b) agency worker?

No

c) user enterprise?

No

If yes, please give details (e.g. how and where defined).

3) In your country, would you describe TAW as a sector in its own right?

TWA (undertakings whose object is to hire out labour) might be described as a sector in its own right in Norway. Traditionally the sector was strictly regulated, and the companies needed a dispensation to operate. The main companies were for a long time organised in an independent business association (Autoriserte Vikarbyråers Forening). Today these companies are members of the Confederation of Norwegian Enterprise (Næringslivets Hovedorganisasjon, NHO) and NHO Service (the companies joined en-block in the late 1990s). Within NHO Service the companies are organised as a sector of its own (with their own membership, statutes etc).

Section 2. Regulatory framework

1) Have there been any changes in the law concerning TAW since 2004?

a) Yes b) No

No.

However, new regulations will come into force in 2008. The new regulations (adopted in June 2008) require TWAs to register their activity in a public register (New regulations on TWAs (In Norwegian)). The main objectives of the coming regulations (not put into force yet) are to improve monitoring and control of the sector, and the new regulations have come against the backdrop of an increase in foreign or Norwegian TWAs hiring out workers from the new (2004) EU-member countries. Instances of substandard wage and working conditions (“social dumping”), as well as tax evasion have been seen, and the national regulatory authorities – among others the Labour Inspectorate – are facing problems with getting access to this part of the TWA sector.

According to the new provisions, all TWAs that aspire to operate in Norway (both Norwegian and foreign owned) will have to send a notification to the Labour Inspectorate, which should include among other things documentation that show that the company is able to meet requirements regarding registration in public registers (for tax purposes and others). The Norwegian Labour Inspectorate will establish a register on TWAs operating in Norway. Only TWAs that show through a notification that they fulfil the various requirements set by Norwegian authorities will be admitted into the TWA-register. Only TWAs that are in the TWA-register will be allowed to operate in Norway, and it will be made illegal for user companies to hire workers from TWAs that are not in this register.

2) How is TAW regulated in your country?

a) Is there a legal framework specifically for TAW; and/or is it covered by general labour law (including case law/ jurisprudence)?

TWAs are covered by general labour law, mainly the Work Environment Act and the Labour Market Act. Some special regulations also exist, among others stating that TWAs mat not reclaim payments/fees from their agency workers, and that TWAs are not allowed to place restrictions on the agency workers in case of transfer from temporary placement into ordinary employment in the user enterprise.

b) What is the role, if any, of collective labour agreements and self-regulation?

Sector level collective agreements do to some degree regulate the use of agency workers. In the Engineering Sector Agreement (covering the metal industry) it is stated that companies which plan to use agency workers or workers hired from undertakings that are not TWAs (see first paragraph for an explanation on this distinction), should consult the shop stewards on the scope and necessity of such a move (for instance Appendix 9 § 1-2 in the Engineering Sector Agreement). This agreement further states that:

§ 14-12 of the Working Environment Act is applicable to the leasing employees from a manpower supply agency (a temporary staff agency). When leasing in accordance with § 14-12 (2) the enterprise shall, if so requested by the shop stewards and when the leased employees will be working in an area in which the Engineering Industry Agreement is applicable, cf. § 1, document the wage and employment conditions that apply in such manpower supply agency (temporary staff agency).”

Similar provisions are also found in some other agreements (among others the construction sector agreement where hiring of employees have increased in importance).

Some types of self-regulation also apply in that the NHO Service branch association for TWAs has developed standard contracts as well as ethical guidelines.

3) What is regulated in these provisions? In particular, does it cover:

a) use of agency work (e.g. length of assignment, sectoral bans, permitted reasons of use, number of agency workers per company, other)

Legislation:

The Working Environment Act regulates when a user enterprise can hire workers from a TWA, i.e. the legitimate reasons for using hired workers. It is linked to the regulations pertaining to temporary employment. User enterprises may use TAWs in the same situations as they are permitted to use temporary employees. Temporary employment contracts can be used in the following situations: a) when warranted by the nature of the work and the work differs from that which is ordinarily performed in the undertaking or b) as a temporary replacement for another person or persons (section 14-9, 2). Some other exceptions from the general rule of fixed term contracts exist, but are of little relevance for TAWs (trainees, labour market measures etc).

The social partners at company level might also agree on alternative regulations regarding TAWs: “In undertakings bound by a collective pay agreement, the employer and the elected representatives, who collectively represent a majority of the employees in the category of workers to be hired out, may enter into a written agreement concerning the hiring of workers for limited periods notwithstanding the provisions laid down in the first paragraph.”, The Working Environment Act, Section 14-12, 2. There is not information on the extensiveness of such agreements at company level.

b) the form of the contract (e.g.project, fixed-term, special contract, open ended, etc.)

No specific regulation. Temporary agency workers are employed by the TWA, and these are regulated by the same regulations governing other parts of the labour marked with regards to type of employment contract etc.

c) social security and social benefits

There are no special provisions for TWA employees/agency workers. TWAs are covered by the same regulations as other types of employees in the Norwegian labour market.

Today the TWA sector is not covered by any collective agreements (with a few exceptions).

d) conditions to open a TAW agency (e.g. license or authorisation schemes, supervision by public authorities, financial requirements, or others - please specify)

New regulations will come into force (in 2008). The new regulations will among other things require TWAs to be organized as a Norwegian limited liability company/ public limited liability company, or provide a guarantee for funds/ equity capital comparable to the minimum share capital given in Norwegian legislation (minimum NOK 100 000). In addition TWAs will have to register themselves in the TWA-register that will be administered by the Norwegian Labour Inspectorate.

e) business activities/services delivered by TW agencies (e.g. prohibition to provide other services than TAW)?

No.

f) third-national companies or temporary agency workers (e.g. activities of foreign agencies)?

No special regulations regarding the activities of foreign agencies.

4) Do any regulations (by law and/or collective bargaining in the TAW sector) specify equal treatment rights for agency workers with permanent workers in the user enterprise concerning:

a) pay

No

b) training

No

c) other terms or conditions of employment?

No

5) Do TAW workers have the right to information, consultation and representation?

TAW workers have the right to representation vis-à-vis their employer, and not the user enterprise. Rights regarding information, consultation and representation will in most cases be as given by Norwegian legislation, as the TWA-sector is not covered by any collective agreements.

6) Is there a control/enforcement mechanism regarding any TAW regulation?

No, but see section 1 for coming regulations.

If yes,

a) is there a special labour inspectorate or a bi-partite body governing TAW?

No.

b) are there any sanctions/penalties for not respecting the regulations (whether stemming from law and/or collective agreements)?

7) Are there any procedures governing use of TAW and strike breaking?

In particular, can workers on strike be replaced by agency workers?

There are not any special provisions on agency workers, but using such labour would be in breach with collective agreement (there are strict regulations on the replacement of workers on strike). The provisions regarding replacement of workers on strike will apply to all types of replacement, not only agency workers. NHO Service (i.e. the NHO Service TWA branch association) ethical guidelines forbid strikebreaking (and as far as we know this has not been an issue in Norway).

Section 3. Social dialogue and collective bargaining

1) Is there any employers’ association(s) for TAW firms in your country?

If yes, please provide any data on membership (e.g. sectoral coverage of firms/workers)

Most of the companies are members of NHO and NHO service. NHO Service organise a number of different branches, not only TWAs. The TWAs are also affiliated to the TWA-branch section of NHO Service (which has its own statutes etc). NHO Service estimates that 80-90% of the TWA sector (measured by employment) is affiliated.

2) Is there any union(s) specifically for agency workers?

If no, have any unions or confederations targeted the recruitment of agency workers? launched any campaigns around agency workers’ rights?

There are no union specifically for agency workers.

Union density among TAWs is low. Within The Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO), the most relevant union would be Norwegian Union of Employees in Commerce and Offices (Handel og Kontor i Norge, HK). There are also other relavant unions, among others Fellesforbundet (TWAs within the construction sector) as well as the unions for nurses etc (for relevant professions working in TWAs). Fellesforbundet has lately been trying to recruit workers from the new EU members within the construction sector, including agency workers.

Generally speaking, the trade union movement is concerned with agency workers’ rights (especially migrant workers), and are campaigning for stronger regulations and stronger monitoring measures to combat social dumping.

3) Collective bargaining levels

Is TAW governed by collective bargaining at:

a) intersectoral/ national level?

No

b) the sectoral level for TAW?

No.

c) company (ie. temporary agency firm) level?

No (although with a few exceptions).

4) Collective bargaining outcomes

Not relevant. It is however worth mentioning that the extension of the construction sector collective agreement (and a possible extension of the engineering sector agreement to the shipbuilding industry is in the pipeline) will influence wage- and working conditions for TWAs operating within this sector.

5) Are there any examples of sector- or company-level collective agreements in other sectors that restrict, permit or otherwise regulate the use of TAW within their domain?

See section 2.1.b

6) Please provide any data concerning:

a) trade union density for agency workers

No figures but union density is very low.

b) the coverage of collective bargaining within the sector.

No collective agreements are in force for the more traditional part of the sector. Generally speaking bargaining coverage is very low, only a few company level agreements exist.

Section 4. Employment and working conditions of TA workers

1) Please provide the most recent data (averages) on TAW employment

a) longevity of TAW employment, i.e. how long workers remain employed

- in the sector?

- with a particular agency?

No specific data on this. However statistics from NHO Service (covering 80-90 percent) show that average number of hours worked per individual agency worker in 2007 was approximately 450 (3 months).

b) duration of TAW placements, i.e. i.e. the length of assignment in a user company.

According to NHO Service, whose statistics cover 80-90 percent of the TWA-sector – the average length of the assignment is 163 hours (2007).

2) Please provide any evidence from official, academic and social partner sources concerning:

a) the reasons for user companies’ usage of TAW, including any differences by sector, occupation, firm size etc.

No relevant information regarding this issue.

b) reasons for workers participation in the sector and levels of satisfaction, including any differences by age, sex, education etc.

No relevant information regarding this issue.

3) In practice, which rules and procedures may apply to temporary-agency workers in contrast to other workers in the user company?

As wage/benefits for agency workers are set by the TWA with no reference rules/procedures of the user company, all the practice referred to in the text might be different from other workers in the user company, i.e. pay, working hours, pensions, fringe benefits, consultation and representation, training, social and health care, access to housing, access to credits/loans. We have no systematic information on such differences in wages/other benefits.

Section 5. The extent and composition of TAW.

1) For 2004 and 2007, please state

a) the number of agency workers

No exact figures. One estimate suggests that approximately 1. 5% of man-years (dependent employees) as well as of persons (dependent employees) are agency workers (2007). For 2004 the estimate would be approximately 1 percent. If calculated on basis of all employees (dependent and self employed), the 2007 figure would be 1.4% (Estimates by Fafo).

Estimates by NHO Service are lower (1.0% - 1.1% for 2007). This figure represents estimated man-years for TWAs in NHO Service, and relates this to the number of employed persons in the total economy (i.e. dependent employees and self-employed, and the employment figure for the economy as a whole is not corrected for part-time work). According to NHO Service, this way of calculating the TAW penetration rate is the one that best corresponds with international figures for the TWA sector, and this figure is therefore used by NHO Service in international contexts.

The number of hours charged (NHO Service member companies) has increased by 100% (2004 till 2007).

b) total reventues of the TAW sector

The member-companies of NHO Service (TWAs) reported total revenues of NOK 12514 million in 2007 compared to NOK 5327,1 mill in 2004. NHO Service companies cover, according to estimates, 80-90 percent of the TWA-sector.

Figures for NACE 74.502 are higher (Statistics Norway). Total revenues were NOK 15660,8 million (2006, most recent figures available) compared to NOK 7609,8 millions (2004). Both sources indicate substantial growth over the last few years.

2) What proportion of the TAW workforce is currently

a) Male/ female?

51 percent of the agency workers (NHO Service member companies) are men.

b) full/part time?

No figures.

c) young (<c. 25) or older (>c. 50) workers?

Within NHO Service companies, 29 percent of the agency workers are young (under 25 years) and 17 percent are older (45 years and more). 5 percent of the agency workers are 55 years and more.

3) Has there been any changes to the TAW sector in terms of

a) Concentration, i.e. proportion of employees or turnover accounted for by the largest firms?

The concentration within the sector is high. Within NHO Service, the 2 largest companies account for 61 percent of total revenues (Adecco and Manpower).

b) Internationalisation, i.e. number/significance of multinational TAW firms?

No exact figures exist, but multinational companies play an important role within the TWA sector. Among the 15 largest companies 6 are foreign MNCs (including 5 of the 6 largest companies).

4) What is your evaluation of the availability and quality of statistical data concerning TAW in your country?

The statistics collected by NHO Service (covering TWA sector companies) is publicly available. As far as we know the quality is good, and the statistics covers among others the number of hours charged, number of agency workers over the year, revenues and other information. The NHO Service figures only cover member companies (estimated till 80-90 percent of the TWA sector).

Statistics Norway (SSB) produces statistics on NACE 74.502 (number of employees, total revenues, number of companies etc). No distinction is made between agency workers and administrative personnel in the company, or by revenues from hiring out of labour and other activities within these companies.

Seen together, these two statistical sources of data provide a reasonable picture of the TWA sector in Norway (size and turnover). Some type of activities will not be covered (some agencies might be registered with another sector code, and foreign companies operating in Norway will not be covered by these statistics). The new register (2008) will not be an independent source for statistics on the sector as such, but will give some additional information on the extent of TWAs that are not covered by existing sources.

Commentary by the NC

The TWA sector has grown considerably over the last few years (since 2004 and onwards), and has also expanded into other types of occupations/types of work. The deregulation of the sector (June 2000) meant that TWAs were allowed to operate in other parts of the labour market than “office work” broadly defined, and over the last few years the companies have increased their activates within occupations such as construction, manufacturing work and health/social care. Following EU enlargement in 2004, there has been an increase both in the number of TWAs, as well as TWAs from the new EU countries. A consequence of this has been increased attention to the pay- and working conditions of agency workers, especially workers that are employed in foreign TWAs.

The employer organisation NHO Service underlines the importance of the sector for the functioning of the labour market, as well as by providing companies/employers with a tool for more effective personnel management/necessary flexibility. NHO Service stress that the TWA sector contributes to ease the transition between studies and work for new recruits in the labour market. It is also important in providing students with extra-jobs. TWAs might also be an alternative for experienced employees who are looking for new jobs or for unemployed persons looking for work. These days the sector also focuses on older employees who are interested in working part-time instead of full retirement. NHO Service also stresses that the sector may also be an important way into working life for employees facing problems in getting ordinary jobs, for instance jobseekers with some type of disability. The employer/sector organisation (today NHO Service) was a strong supporter of the 2000 deregulation, and has been working to win approval for the sector as a serious and necessary part of the national labour market.

Trade unions have traditionally been sceptical to the TWA-sector, mainly because they regard this type of work as problematic when it comes to employment contracts and employment security, as well as the problems connected with the “triangular” form of employment. The development of the TWA-sector over the last few years (increased number of agency workers, the development of temporary agency work into new sectors and in particular the growing importance of foreign TWAs/employees) has contributed to put the issue of TWA higher on the trade union agenda. An important area for trade unions over the last few years has been to work to secure measures (through legislation as well as collective agreements), which will make it easier to monitor and control that temporary agency employees are not exploited.

Views of the social partners – the TWA directive

NHO Service welcomes the extended Norwegian regulations on temporary work agencies (registration arrangement), but would also have liked to see further control measures (some control of the companies in the register to ensure that these follow Norwegian regulations).

The Norwegian TWA-sector has been critical to an EU TWA-directive, among others due to the substantial differences between the national labour markets in Europe, which makes it difficult to find a text that will be well adapted to the various national labour market systems. NHO Service/the TWA-sector therefore believe that this kind of regulations should be left to national level. In Norway the challenges will be substantial on article 5 (equal treatment) since the labour market is covered by a large number of collective agreements with detailed regulations. The TWA-sector therefore hope that the social partners – though negotiations at national level and the derogation option – might reach agreement on a new sector collective agreement for the TWA sector based on what is practicable/suited to the situation in Norway. Today there are (in practice) no collective agreements that is covering the sector, and NHO is envisaging that the parties (LO and NHO) will start negotiations for a TWA agreement (sector level agreement) during the autumn 2008.

LO welcomes the new directive, but has so far not issued any detailed comments on the final text. LO has commented on the previous version (2002), and here the organisation stressed the importance of the principle of equal treatment of temporary agency workers and employees and regular workers, as well as the importance of including pay in concept of “working conditions” (LOs comments on the directive, given to The Ministry of Labour, 12 June 2002). LO had also a number of comments to the previous draft (not referred in detail here), among others arguing for equal treatment from day one. LO has decided to set down a negotiation committee with representatives from the relevant trade unions as well as from LO. The aim is to enter negotiations with NHO in order to reach a collective agreement for the TWA sector. LO would have preferred to apply the relevant existing sector agreements for agency workers (contraction agreement for agency workers in the construction sector etc), but has so far not been able to win though with this principle vis-à-vis NHO.

Kristine Nergaard, Fafo

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