Committee proposes permitting private employment agencies and leasing of labour

On 8 September 1998 a public committee put forward a proposal suggesting an end to Norway's present ban on private employment agencies and the "leasing" of labour. The leasing of labour should be subject to the same regulations as temporary employment, but with the possibility of making exceptions through collective agreements.

In Norway, the National Employment Act lays down a general prohibition (with exceptions) on private employment agencies and the "leasing" of employees - both traditional temporary work agencies and situations when one firm leases employees from another. The present legal framework has been frequently debated over the past few years, and several political parties have expressed a wish to modify the strict regulations (NO9708118F and NO9802151N). A public committee chaired by Jan Blaalid, director of Statskonsult, was set up to consider the extent to which the regulations concerning private employment agencies are suitable for present labour market conditions. In addition, the committee examined what kind of changes needed to be made to the present regulations in order for Norway to be able to ratify International Labour Organisation (ILO) Convention No. 181 on private employment agencies, which permits such agencies. The committee presented its report (Norges offentlige utredninger 1998: Arbeidsformidling og arbeidsleie) on 8 September 1998, and suggested significant changes to the present regulations. The most important proposals are that:

• private employment agencies should be permitted. They may demand fees from the employers, but not from those seeking employment; and

• the leasing of labour should be allowed in all businesses and trades. However, the leasing of labour by firms should be subjected to the same regulations as for temporary employment

A wide range of employees' and the employers' organisations were represented on the committee, along with various public institutions. The committee's proposals are unanimous.

Private employment agencies

Private employment agencies are not permitted at present, even in those cases where there are no intermediary fees involved. The National Employment Act allows the Ministry to make exceptions from these prohibitions within limited areas - however, so far this has happened only to a very limited degree.

The committee proposes abolishing the prohibition on private employment agencies and also changing the regulations to include the business of "headhunting" and of placement via the Internet. As a rule, private employment agencies would be able demand fees from employers, but not from job applicants. Another requirement would be that businesses which wish to run a private employment agency would have to report on their business activities to the labour market authorities.

The committee emphasises that Norway should still maintain a strong public employment service with responsibilities for placement, employment measures and unemployment benefits. The public employment service should continue to be free of charge for both job applicants and employers.

The leasing of labour

The National Employment Act bans the leasing of labour, although there are certain exceptions. Firstly, there is a general exception regarding the leasing of labour within areas such as office/administrative work, accounting, canteen work, warehouse work (as provided by temporary employment agencies). Secondly, manufacturing businesses intending to lease out their own staff within the business' own areas of production, may apply to be exempted for a limited period of time, or for a specific task.

The committee proposes permitting the leasing of labour. In order to maintain the employee's rights and interests, regulations will be drawn up to define the circumstances when labour leasing will be permitted. The committee proposal draws a distinction between those enterprises which hire out employees on a more professional basis (temporary work agencies) and those which only rarely do so. The committee proposes allowing employers to lease people from temporary employment agencies where they are facing periods of unusual demand for personnel, for instance, or where there are vacancies due to leave or sickness. This will ensure that workers leased from temporary employment agencies are not used to circumvent the requirements of the Worker Protection and Working Environment Act, which limits the use of temporary employment. The regulation of this type of staff leasing will now appear in the Worker Protection and Working Environment Act rather than the National Employment Act. The committee further states that the regulations in the National Employment Acts may in some cases be too stringent. It is suggested that enterprises which are parties to collective agreements should also be permitted to lease labour in other circumstances, if an agreement has been concluded with the other relevant parties.

When it comes to the leasing of labour from enterprises which are not normally involved with this activity, the committee proposes allowing this if it has been discussed with the trade union representatives concerned. It specifies that employees being hired out should be employed in an enterprise with good pay and working conditions. The committee believes that agreements with representatives should be a requirement in those cases where conditions concerning such leasing are more comprehensive. Enterprises within the same company would be exempted from the requirement for agreement with union representatives.

The committee stipulates that the proposed changes to the regulations concerning the leasing of labour will satisfy the requirements of ILO Convention No. 181.

Views of the social partners

As mentioned above, the committee had broad representation from the largest employee and employer organisations, and its proposals were unanimous. The Commercial Employers' Association (Handels- og Servicenæringens Hovedorganisasjon, HSH) stated in a press release that it is particularly satisfied with the support shown by the committee towards temporary employment agencies. The Confederation of Norwegian Business and Industry (Næringlivets Hovedorganisasjon, NHO) argues that the proposed measures mean that the legal framework will be much more appropriate to the contemporary Norwegian labour market, and that giving industrial sector enterprises the same access to temporary employment as the service sector is a positive move. The Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO) has expressed its support for the main propositions, but emphasises that the new proposals are accompanied by a recommendation that public labour market initiatives are not scaled down. LO's view is supported by the Federation of Norwegian Professional Associations (Akademikernes Fellesorganisasjon, AF) and the Confederation of Vocational Unions (Yrkesorganisasjonenes Sentralforbund, YS).

Commentary

Questions concerning changes to today's regulations on the leasing of labour and private employment agencies have frequently been on the political agenda in Norway. Several political parties have expressed the need for less stringent regulations. The fact that the highly representative committee managed to achieve unanimity for its recommendations indicates that changes to the law will now take place.

One reason why the employee organisations seem to have accepted changes to the legal framework is probably that there are already so many exemptions in existence. Furthermore, limiting temporary employment agency activity to specific professions and trades has not been an easy provision to uphold. Changes to working life have led to changes in the job content of many professions. This is the case with office work, which has become more and more computer-based. The committee points out that temporary employment agencies already hire out workers who fall outside the categories allowed for in the legal exemptions. One must also presume that the union organisations want to see a legal framework which will enable Norway to ratify ILO Convention No. 181. The proposal for a new legal framework also emphasises the importance of safeguarding employees' rights, and has left a major share of the regulatory activity regarding the leasing of labour to the social partners themselves. It is important to note that exemptions to the general regulations concerning labour leasing is dependent on the existence of a collective agreement in the company concerned, and that an agreement is made on how such leasing should operate. A change in the legal framework may also give new value to an earlier proposal suggesting a public temporary employment agency under the direction of Labour Market Administration (Arbeidsmarkedsetaten) (NO9801144F). (Kristine Nergaard, FAFO Institute for Applied Social Science)